Industrial capitalism: origins, characteristics and phases

Industrial capitalism was an economic system that emerged in the midst of the Industrial Revolution, which lasted between the 18th and 19th centuries. It can also be known as  industrialism  .

In the phase in which it lasted, its main characteristics were economic freedom and globalization with the integration of markets, as well as intense industrialization and the emergence of new technologies.

This system was successful in the phase of commercial capitalism. In this first phase, the countries avoided free trade through protectionist measures, such as the application of tariffs or even the prohibition of the transport of goods.

Main characteristics of industrial capitalism.

Industrial capitalism was an economic system characteristic of mass industrialization that began in Great Britain during the 18th century, a country where modern economic growth was first achieved.

At the same time, the current of thought linked to economic liberalism emerged. Here are the characteristics that marked this period:

  • Intense industrialization and formation of new productive sectors;
  • Creation of new technologies and new products;
  • Increased productivity;
  • Development of means of transport;
  • Growth of the urban population;
  • Decrease in state intervention;
  • Increase in social inequality;
  • Specialization and division of labor for each individual;
  • Salaried work and, over time, an increase in average wages and a decrease in working hours.

In addition to accompanying the beginning of the Industrial Revolution, this phase of capitalism provided the development of markets, the opening and integration between them, a process known as globalization.

Origins of industrial capitalism.

The origin of capitalism occurs in the period of mercantilism (commercial capitalism). At the time, the economy was still centered on agriculture or the exploration of precious metals, in addition to the intense control of the state over economic activities.

With the arrival of liberal thought, mainly the economist Adam Smith, industrial capitalism begins to be characterized by less state intervention and the formation of freer markets.

This system is accompanied by the intense industrialization of the countries, in which a large part of their populations exchange rural areas for cities.

In addition, labor is no longer the main means of production due to machines, so production could be carried out on a large scale.

The entire movement started in England influenced parts of Western Europe, the United States and Japan, and in these countries, the Second Industrial Revolution occurred during the 19th century and the beginning of the industrialization process.

Industrial capitalism is replaced by the next phase, which is known as  finance  or  monopoly capitalism  . Then the companies of the previous phase became multinationals and joined the banks in search of greater investments.

Phases of capitalism.

Industrial capitalism is known as the first period of intensification of this economic system. However, historically, it is the second phase of capitalism. The three phases are classified as:

  • Commercial or mercantile capitalism (also called precapitalism), between the 15th and 18th centuries;
  • Industrial capitalism or industrialism, between the 18th and 19th centuries;
  • Financial or monopoly capitalism, 20th century.

Currently, capitalism continues with industrial and financial characteristics, but with a large presence of computer and information systems that marked the third Industrial Revolution since the 1970s. Because of this, this period can be known as  informational capitalism  .