History and Trends of Free Market Capitalism

Free Market Capitalism

History of Capitalism

Free Market Capitalism emerged in the mid to late 1700's and grew in popularity and strength as individuals realized the benefits specialization and trade and antiquated infrastructures began to grow increasingly more capable and efficient. Improvements in travel and transportation, the monetization of individuals and the softening of attitudes towards the promise of a market based system were important obstacles that needed to be overcome before a region could progress under a free market system. Therefore, regions developed at a very uneven pace over the past several hundred years.

The road to free market capitalism has not always been a smooth one. A system where every man is primarily responsible for their own success or failures, yet are completely dependent on each other for survival has some inherent problems such as a propensity for greed and the exploitation of the weak. Market inefficiencies were often great due to lack of rapid communication, regulations, and government interference. Individuals in the past had to rely on their own common sense and had little means for comparison. As competition grew and the flow of information increased, markets became increasingly more efficient.

The birth of the industrial revolution catapulted capitalism to the forefront of economic thought. The mechanical advances, mass production and profits it generated were tremendous and intoxicating. Industrialized nations began on a whirlwind of growth and prosperity. This mass production fostered the creation of societies made up of many interdependent channels that rely on each other for survival. This interdependence was a large shift from the days of self sufficient farmers that provided nearly all of the food and goods the family needed and had little use for markets.

The era of the great depression was a catastrophic setback for free market capitalism as growth and investment came to a halt. Many lessons were learned from these events by governments, individuals and companies alike. The system proceeded but more slowly and with a great deal more caution. Many initiatives and laws were put in place to help prevent a future occurrence.

Today Free Market Capitalism is in full swing. Our entire economy is dependent on it in some way and the idea of a self sufficient individual is nearly extinct. Markets are heavily regulated and analyzed by millions of groups for many different reasons. A system of checks and balances governs the actions of the market system ensuring for the fair and equitable trade of goods and services. In addition, we are in the midst of a technological revolution. The entire way in which business is transacted is evolving