1. EARLY STAGES OF CAPITALISM / MDDLE AGES Early stages are referred by men of our times to as middle ages. Middle ages may be divided into three periods. A. Pre-business Capitalism (500 — 1100) This era is dominated by feudals and manors. This era is marked by three elements: Early stages are referred by men of our times to as Middle Ages. Middle ages may be divided into three periods.
(i) Individual standing and status ‘could not be changed by individual efforts.
(ii) Production was made for only personal consumption.
(iii) In material affairs time did not count. Workers were born serfs. They had to work for 26 hours. However, regular patterns of work were developed. Talents of workers were rnade necessary to till a job. Feudal lords developed some administrative and accounting techniques.
B. Petty Capitalism (1100 — 1400) This era introduced business to society. Production was made not only for personal consumption but also lot exchange for the first time in this era. People came to know the concept of buying needed goods and selling surplus goods. This era not only enjoyed barter system but also some common system of exchange evolved. They realized the importance of time, work, leisure, and specialization. People knew how to invest capital. They practiced the following.
(i) Formation of partnership.
(ii) Advancing loans and goods.
(iii) Making a charge on credit sales. They learnt that status could be attained by performing economic activity. They believed in economic independence. Training and apprenticeship were given importance. The essence of this era was belief in democratic economic equality. This period is marked by high price for capital (usury) and poor price for goods. But it was recognized that the merchant should get fair price for his goods enabling him to maintain his standard of living. Natural growth and expansion were end result of this period.
C. Protestant Capitalism (1400 — 1776) This period started at the end of middle ages and was connected with the private enterprise system of the U.S. The era is registered with foreign trade, manufacturing, colonialism, shipping, marketing, and huge profits. Businessmen learned techniques, policies, and practices. They hired people to work for them. Businessmen made a great deal of traveling within and outside the country. Transportation, banking, import, export, training, specialization, and hiring and firing of personnel, are special features of this time. Some inventions were also made putting a foundation stone for industrial revolution.