What is Capitalism?
This is an economic system in which the major means of production was privately owned. Under this system there are two major group of people employers and workers, employers owned major means of production and pay wages to the workers. In Europe capitalism developed after the decline of feudalism.
Capitalism divided into three stages namely;
- Mercantile capitalism;
This was based on trade activities and it took place mostly between 16th
century. Merchants were the key during this period
- Industrial capitalism;
This was based on Industrial activities, it took place when machines started to be used to along extent for production activities in Industries. Big traders called the bourgeois owned the means of production such as factories and machinery.
Industrial capitalism was greatly associated with the industrial revolution which took place between 1750 and 1850. In Europe it dominated by Britain, it was the first country in European nation to be industrialized.
- Monopoly Capitalism:
This was based on large companies that dominated the production of commodities. This was the large scale production which involved centralized of capital and lack of open competition.
Factors that Stimulated Industrialization in Europe
- Presence of Coal and Iron, Iron was used in building factories, bridges and railways and Coal was used as fuel for Industrial machines and Engines and all these led to the improvement of Agriculture.
- Industrial revolution encouraged proper and use of soil and this increased soil fertility and better animal husbandly hence increased the production and ensured availability of raw materials for the industries.
- Advancement of Science and Technology for example presence of spinning machines replaced the use of human hands for weaving clothes. This led to an increase in the production for textile factories.
- Trade activities also stimulated Industrial Capitalism, European Traders accumulated wealth from Asia and Far East and all these were invested in Industries.
- Political stability in Europe also influenced the Industrial revolution.
- Availability of skilled and unskilled labor needed in Industries also influenced the Industrial revolution.
- Improvement of roads, railways and water transport made it easy to transport Industrial workers, materials and finished goods.
- European Government supported industrialization process.
- Demands of Industrial Capitalism
There are four demands of Industrial capitalism such as
Raw Material demand
- Raw materials
- Labor force
- Areas for Investment
This was an important thing which was greatly needed in industrial activities. These raw materials were such as tea, coffee, cocoa, beans, iron, cotton, sugarcane, tobacco, sisal, ivory and palm oil. And European countries did not have all these raw materials.
The expansion of Industries led to the need of labor force to run the machines and reduced the cheap labor available for industries.
Due to Industrial revolution there was over production and under consumptions of goods and each Nation wanted to develop their own industries and market. USA introduced tariffs to protect her Industries and keep out foreign products.
Areas for Investment
Africa was one of their new areas which were needed for opening up of investments with hardly competition. Agricultural raw materials could be cultivated in fertile areas and also there was the presence of minerals needed by the European Industries.
- Agents of Industrial Capitalism
Due to the industrial capitalism demands European countries thought of establishing their economic activities in Africa so as to develop commercial Agriculture and their Industries in General. So European sent their Agents to Africa to represent them in various ways, these agents include;
- European Traders
The European traders started to survey to East African regions between 1809 and 1824 through British India Company. A famous British trader in East Africa was Sir William Mack noon, other traders were James Stevenson, Karl Peter and Harry Johnson.
- The aim of these traders was to Exploit African resources in form of raw materials, market and areas for investment. The role of traders was to prepare Africa for colonization.
- European Explorers
Explorers came to Africa to confirm reports provided by traders for their various travels in the interior of Africa. The explorers wrote reports, books and speeches which directly or indirectly campaigned for colonization of Africa in economic and political grounds.
Roles of Explorers
- They gave detailed account of everything they saw, and this created great interest in Africa by various groups and individuals in Europe. For example Johannes Rebman saw the snowcapped Mt Kilimanjaro in1848 and Krapt saw Mt Kenya in 1849.
- Other explorers opened up interior routes for commerce, for example Joseph Thompson surveyed between Dar es Salaam and Lake Nyasa.
The earliest Missionaries in East Africa were those of the church Missionary society and examples were John Rebman, Dr David Livingstone and others.
Roles of Missionaries
Companies and Associations
- Missionaries wanted to convert people of Africa to Christianity, they created Christian villages where free saved were taught Christian principles and manual skills such as how to read and write in order to be able to read Holy Bible.
- They replaced Slave trade with legitimate trade to fulfill the economic demands. They conducted research on various crops hence determined best cash crops.
- They settled in the Interior of Africa for longer period compared to other European groups i.e Traders and explorers
- They introduced European culture to the African, this aimed at preparing of Africa for the coming of European colonialism.
Examples of the companies that came to Africa were;
Africa Association of Britain established in 1788 for Agriculture, Imperial British East Africa Company (IBEACo) formed in 1886 to protect British Interest in East Africa. German East Africa Company (GEACo) formed by Carl Peter in 1884 handling German Interest in East Africa, Royal Niger Company (RNC) formed by George Turban Goldie’s in 1884 in West Africa and others.
Roles of Companies associations
- They signed treaties with African local leaders in order to have various territory and resources. For example Chief Mandara of Chagga signed a treaty for controlling of 13 km2 of land in Kilimanjaro to Sir Harry Johnson in 1884.
- Some companies enforced administrative law and order in various African regions.
- They sent back various information on the availability of resources in various regions to their home countries.
- These companies also built roads, water ways and administrative centers in their Areas of operation for transportation and houses of their officials.
- They encouraged their mother countries to come and colonize Africa, for example after the Royal Niger Company get control of several trading areas it welcomed the British government to colonize Nigeria.