TYPES OF CAPITALISM:–
· Commercial capitalism (1500 –1750) or mercantilism
· Competitive / industrial capitalism (1750 – 1875)
· Monopoly / Finance capitalism (1875 – present)
1. COMMERCIAL CAPITALISM / MERCHANT CAPITALISM:-
During this stage, Europeans closed their borders in search of precious metals such as gold and silver. The powers were not interested in the social and economic transformation of the societies they met, they were only interested in plundering and raiding.
Although this type of capitalism was characterized by primitive accumulation of capital,it also stimulated the industrial revolution in Europe.
2. COMPETITIVE / INDUSTRIAL CAPITALISM:-
This type of capitalism was characterized by the mushrooming of many manufacturing industries that were small in size but competing in the production and maximization of profit. The main objectives of this type of capitalism were to:-
(i) Acquire markets for European manufactured goods.
(ii) Procure raw materials.
During the industrial capitalism, there is a bitter struggle among capitalistic for increasing production levels so as to maximize profits. In the course of these struggles some capitalists are destroyed while others grow rich; therefore to survive the capitalists must increase labor productivity which is done through the introduction of more efficient machines.
Features of competitive industrial capitalism:-
(i) The role of the state is minimal because of the belief in free trade policy or sometimes called “Laissez faire” policy under free trade, the production and distribution of goods and services is determined by the market forces and not the state.
(ii)Most enterprises are small and competitive, they complete among themselves to increase production and maximize profits.There is nor Monopoly in the markets or investments.
(iii) Tariff policies are still protective in character that is they aim at protecting home industries.
(iv) Banks are not controlling production; they are only agents of payments that are receiving deposits.
(v) Raw materials are important but not crucial, that is the European powers could do without raw materials from Africa.
Effects of competitive capitalism in Africa:-
(a) Abolition of slave trade. The European powers abolished slave trade in Africa so as to get markets where they can sell their manufactured goods and raw materials.The European powers wanted the market but slaves would not provide them, hence this necessitated the abolition of slave trade.
(b) Introduction of legitimate trade. Legitimate trade refers to the type of trade that involved the buying and selling of natural resources; the European powers introduced legitimate trade which would make it possible to get raw materials such as palm oil, rubber and coffee needed by the European powers.
(c) Division of Africa among the European trading companies that shared Africa amongst them. These companies included British South Africa company that controlled South Africa, Zimbabwe + Zambia while the imperial British East Africa company controlled Uganda, Kenya and Zanzibar. These companies were searching for markets and raw materials that were needed by their respective government.
(d) Fall and rise of some states. Competitive industrial capitalism led to the fall some states in Africa because it involved the abolition of slave trade on which some states like Dahomey depended on, it also contributed to the rise of states because African state accumulation a lot of wealth out of the legitimate trade which was used to build states such as the Kingdom of King Jaja of Opobo.
(e) Influx of foreigners. It let to the influx of many foreigners, especially Europeans. These groups of Europeans included Explorers, Missionaries and traders, who later on paved way for the colonization of Africa by Europe.
3. MONOPOLY CAPITALISM
Monopoly capitalism was characterized by the predominance of monopolies. Monopolies were formed to reduce stiff competition in the production process.
It is subdivided into:-
(a) 1830 – 1947 This was characterized by colonization of territories by individual countries.
(b) 1947 – present:- This was characterized by colonization of territories by more than one country.
Characteristics of Monopoly Capitalism.
Lenin identified five characteristics of monopoly capitalism:-
a. Concentration and centralization of capital.
Under monopoly capitalism, Production becomes more concentrated and centralized under one big company.
Monopoles may also set prices very low with objectives of preventing more industries joining the market, so that they can maintain their monopoly.
b. Merging of bank capital and industrial capital to form finance capital.
In their drive for more profit, monopolistic companies did not confine only on the production of commodities but also invest in the banking sector. Under monopoly capitalism, bank does not only act as agents of payments but also control production boards on monopolistic companies such as British Petroleum (BP) and General Motors’ (GM).
c. Export of capital as opposed to export of commodities.
Under Monopoly capitalism, monopolistic companies dominated the production and market in their countries but they now cross their borders to control market and production in other countries hence they turn into international monopolistic associations. These associations divide the world among themselves; examples are General motors (GM), British Petroleum (BP) and Moil Company.
d. Completion of division of the world among the imperialist powers.
During this stage all countries are drawn in to the orbit of capitalism. The colonial system became part of the capitalist world economy whereby the capitalist sought for colonies to satisfy the needs of capitalism. These needs included market, raw materials, cheap labour and investment areas. When the 19 th which came close world capitalism retained all the basic features of capitalism while it developed new ones.