Final answer:
The economic system developed during the Agricultural and Industrial Revolutions in Europe is capitalism, characterized by private ownership, market-driven supply and demand, and the transition from handicraft to mechanized manufacturing.
Step-by-step explanation:
The economic system that developed alongside the Agricultural Revolution and Industrial Revolution in Europe is known as capitalism. This system is characterized by private ownership, where individuals invest capital to produce goods and services for sale in an open market, driven by supply, demand, and competition. During the Industrial Revolution, there was a shift from agriculture and handicraft production to manufacturing dominated by machinery, laying the groundwork for the economic and social structure of modern capitalism.
The Agricultural Revolution, which saw increased crop production, led to surplus populations that moved into towns and cities where they could specialize in various trades. This was integral to the development of capitalism as it created a workforce for upcoming industries. The Industrial Revolution followed, significantly altering Europe's economies by introducing mechanized manufacturing, which increased the production of consumer goods and altered social and economic relationships. In parallel, enlightenment thinkers like Adam Smith and John Locke propagated ideas aligning with the principles of capitalism, such as laissez-faire economics and the notion of personal liberty and property rights.