Capitalism: Origins, Social Relations, and Market Development

This essay examines the origins and development of capitalism, challenging the common belief that it emerged in urban areas. It argues that capitalism's roots lie in agrarian communities, where social property relations between producers (farmers) and appropriators (those who did not own land) led to market development. The essay explores the evolution of these relationships, contrasting them with pre-capitalistic societies and highlighting the dependence that developed between appropriators and producers. It discusses how the need for goods and services fueled these social property relations and how the market became a central mechanism for social reproduction. Ultimately, the essay concludes that capitalism emerged in the countryside, driven by the interaction between labor and capital, and that the nature and role of markets distinguish it from pre-capitalist societies.

Running head: CAPITALISM
Capitalism
Student’s Name
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CAPITALISM 2
Capitalism
Introduction
It is often assumed/believed that capitalism emerged in the urban areas. The reason
mainly put forward to explain this is the early emergence of well-developed economic
systems in the urban areas. Although the fact that well developed economies were mainly
observed in urban areas, it is worth noting that capitalism has its roots in the countryside.
Capitalist emerged during the agrarian age. At the time, the main activity was farming for
food. The producers were the owners of the factors of production. Before this age, people
used to exchange commodities in different ways and manners. However, a special market
system developed during this period. There rose a class of wealthy people who did not own
land (the major factor of production). There developed an exchange system where the farmers
would provide their surplus produce to the appropriators in exchange of compensation in
terms of wage. The farmers would use the compensation to buy other commodities while the
appropriators would use the commodities provided for business. Capitalism must have
emerged during this period. This essay is going to focus on capitalism. The following will be
discussed: whether capitalism emerged in the city or the countryside; role so social property
relations in development of capitalism; why the social relations developed in agrarian
communities; how the relations differed with those of precapitalistic societies and how the
relations between the appropriators and the producers became so dependent.
Emergence of Capitalism
It has been thought for a long time that capitalism emerged in the cities. This is a
common belief especially in the west. The argument put forth is the well-established
economies and ownership of property that has been witnessed in the cities since a long time
ago. Most of the business operations and exchange of goods for currency mainly started in

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the cities. A closer look in to the situation however reveals other fundamental facts. These
facts point out the realisation that capitalism emerged in the country side. This must have
been during the agrarian age. It is worth noting that for more than a millennium, human
beings have met their need by working on the land.
The idea of capitalism must have rose during the agrarian age. During this age, there
were division of people into various classes. According to Wood (1998), the
farmers/producers owned the major factor for production (land). Despite this, they were the
peasants as they would provide their surplus produce to others (appropriators) in exchange of
a wage. It follows that the producers were providing their labour in exchange of a wage. This
is the form of manipulation of the lower class by the middle and upper classes that are
observed in most capitalist societies. It is therefore right to conclude that capitalism emerged
in the country side or in the lands.
Social Property Relations Necessary for Development of Capitalism
As observed in the discussion above, the farmers were the owners of the factors of
production, mainly land. In modern capitalism, the workers are rarely owners of the factors of
production. Although this is the case, it is still possible for workers to be appropriated for
providing labour using their own factors of production such as land. The social property
relations that were necessary for the development of capitalism are those between the
appropriators and the producers. As Hakemy (2017) observes, the relationship was in such a
way that the producers worked on their own lands and compensated for their labour by the
appropriators.
Interaction between the appropriators and producers led to emergence of markets.
According to Dimmock (2014), the market is a very essential component of capitalism

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societies. In modern capitalism, factors of production are privately owned. However, the
ability to command a large market is very essential for making profits and accumulating
wealth. It follows that the relationship between propriators and producers led to emergence of
markets. Emergence of markets led facilitated the development of capitalism.
Why did the Social Property Relations Developed in Agrarian Communities?
Long before the emergence of markets, people used to exchange goods and services in
many ways and for different purposes. The social property relations of the agrarian
communities were fuelled by the need for different goods and services by the common people
(the producers). People need different items for survival. For instance, an individual cannot
do without food, shelter and good health. Since one is not endowed with the ability to have
all these by themselves, there is need to seek what one does not have. This is what led to the
existence of a relationship between the appropriators and the producers. The producers
provided labour and the appropriators compensated them for the labour. With the
compensation, the producers would then have access to other goods and services that they
needed.
The relationship between the producers and the appropriators was also mediated by
the market. Although markets have always been existent. However, there is a unique feature
of the market found in the capitalist economy. This is that almost all goods or products are
made with the aim of releasing it into the market. Such a market system was developing
during the agrarian age which made the relationship between the appropriators and the
producers very essential. The market is very important in the capitalist society not only as
simple mechanism of exchange of goods but as the main mechanism of social reproduction.

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These kinds of markets started in the agrarian age. The primary good of the age was the most
essential necessity for human survival, food.
How did the Social Relations Differ from those of Precapitalistic Society?
Wood observes that the main difference precapitalistic and capitalist societies has
nothing to do with whether production is done in urban or rural areas. Rather it was because
of the property relations that existed between the producers and the appropriators. This
applies to both the situation of the industry or agriculture. He notes that it is only in capitalist
societies where the exchange of goods/services between the producers and the appropriators
was motivation by a pure system of economy. This means that in capitalism, such exchange
is motivated purely by economics. This is because most of the producers in capitalist
economies do not own the factors of production. They are rather compensated for their
labour.
Contrary to the capitalist societies, the producers owned the major factor for
production (land). Despite owning the lands, they were still exploited by the appropriators as
they would be compensated for providing labour using their own lands. This means that the
appropriators did not own factors of production but rather exploited those who did. Before
capitalism, there were no developed market systems. People used to exchange their goods
through such means as barter trade. This is a very different scenario with the modern
capitalism where the market is the basis of almost all production. In a nutshell, the major
difference between the precapitalistic and capitalist society is the nature, type and role of
markets.

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How did relations between the appropriators and the producers become so
dependent?
The appropriators could be viewed as businessmen whose main aim is to make profit
via selling of goods and services. The main aim of any business venture since time
immemorial has been to maximize on profits. During the agrarian age, the appropriators did
not own the factors of production (mainly land). The producers on the other hand needed
commodities necessary for survival. Unlike the appropriators, they owned land. The
producers mainly used their land for farming and producing food. For them to acquire the
other basic items that they needed, they would sell the surplus produce to the appropriators
and get a compensation in return. The appropriators therefore paid the producers for their
labour. The relationship was therefore essential in the sense that the appropriators did not
own land while the producers did. On the other hand, the farmers did not have some wage to
cater for other expenses and the appropriators provided this. The relationship between the two
was therefore essentially that of dependence.
Conclusion
It is commonly believed that capitalism must have started in the cities. This is because
most of the earlies dependent economies were observed in the cities. While it true that most
of the complex economies emerged in urban centres, capitalism emerged in the country side.
This was during the agrarian age where the producers provided labour in return for a wage
compensation by the appropriators. It was during this time, that the kind of markets found in
capitalist societies started to develop. The major difference between the agrarian business
practice and that of modern capitalist is that in the former, the land was mainly owned by the
producers while in the later the workers rarely own the factors of production. The farmers

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needed some wage/currency to purchase the other commodities that they needed while the
appropriators needed the farmers to sell their labour to them. The relationship between the
appropriators and the producers was therefore dependent in nature.

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References
Dimmock, S. (2014). The origin of capitalism in England, 1400–1600 (pp 45-107). Brill
Publishers.
Hakemy, S. (2017). Capitalism and Freedom (pp 23-67). Macat Library.
Wood, E. M. (1998). The agrarian origins of capitalism. Monthly Review, 50(3), 14.