Final answer:
Capitalism developed through European colonization and the Industrial Revolution, turning Europe into an economic powerhouse. It involves private ownership and profit-oriented production, as influenced by thinkers like Adam Smith. Comparatively, socialism and communism differ in the ownership and distribution of resources, with communism aiming for a classless, stateless society.
Step-by-step explanation:
Development of Capitalism
The development of capitalism as an economic system was significantly affected by European colonization and the industrial revolution. European economies expanded through colonialism, which involved the political domination of other countries to economically exploit their resources, such as peanuts, cocoa, and palm oil. This expansion enabled European industries to become more lucrative.
Capitalism is an economic system where the means of production are privately owned and operated for a profit. Traditionally, this system is characterized by the investment of wealth for development, a free market, and the concept of competition. Adam Smith, a significant figure in the philosophy of capitalism, explained that invested wealth could be an engine for economic, social, and technological advancement.
The industrial revolution, beginning in the late eighteenth century, fundamentally transformed European societies by fostering mechanical production in factories, leading to modernization in social, economic, and political life. It catalyzed the shift from an agrarian economy to an industrialized one, emphasizing manufacturing and technological progress. This shift was part of a broader move from pre-modern economic systems to a modern global economy.
Capitalism, Socialism, and Communism
The difference between socialism and communism lies in the management and distribution of the means of production. In socialism, this can involve various forms of state ownership or cooperative management, with an emphasis on egalitarian distribution, whereas communism, as both an economic and political system, advocates for the absence of class and state, with all property being commonly owned
Communism differs from capitalism and socialism because it envisages a classless society where the means of production are owned communally, not privately or state-controlled. This philosophical and economic doctrine aims at the abolition of private property to create a stateless, classless society where goods are distributed as per needs.