Western Economies- Feudalism

8/8/2019 Western Economies- Feudalism

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WESTERN ECONOMIESWESTERN ECONOMIES

FEUDALISMFEUDALISM

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FeudalismFeudalism

y Feudalism was the system of loyalties and

protections during the Middle Ages.

y Derived from the Latin word feudum (fief)

y The term feudalism has been used most broadly

to refer to medieval society as a whole and most

narrowly to describe relations between lords

and vassals.

y Three primary elements characterized feudalism:

lords, vassals and fiefs; the structure of feudalism

can be seen in how these three elements fit

together. 2


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RelationshipRelationship

y A lord was a noble who owned land,

y a vassal was a person who was granted

possession of the land by the lord,

y and the land was known as a fief.

y In exchange for the fief, the vassal would

provide military service to the lord.The

obligations and relations between lord, vassaland fief form the basis of feudalism.

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commendation ceremonycommendation ceremony

y formal and symbolic ceremony called a commendation

ceremony

y homage and oath of fealty.

y

During homage, the vassal would promise to fight for thelord at his command.

y Fealtycomes from the Latin fidelitas, or faithfulness; the

oath of fealty is thus a promise that the vassal will be

faithful to the lord.

y Once the commendation was complete, the lord and

vassal were now in a feudal relationship with agreed-upon

mutual obligations to one another.

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1616thth and 17and 17thth CenturyCentury

y This was the Age of Enlightenment when

Reason was king and the Middle Ages was

painted as the "Dark Ages".

y Enlightenment authors generally mocked

and ridiculed anything from the "Dark

Ages" including Feudalism, projecting its

negative characteristics on the currentFrench monarchy as a means of political

gain.

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IndiaIndia --FeudalismFeudalism

y The Zamindari System is often referred

to as a feudal-like system.Originally the

Zamindari System was introduced in the

pre-colonial period to collect taxes frompeasants, and it continued during colonial

British rule.

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MercantilismMercantilism

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MercantilismMercantilism

y Mercantilism is an economic theory that holds

that the prosperity of a nation depends upon its

supply of capital, and that the global volume of

trade is "unchangable."y Economic assets, or Capital, is represented by

bullion (gold, silver, and trade value) held by the

state, is best increased through a positive

balance of trade with other nations (exportsminus imports).

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mercantile systemmercantile system..

y Mercantilism suggests that the ruling

government should advance these goals

by playing a protectionist role in the

economy, by encouraging exports anddiscouraging imports, especially through

the use of tariffs.

y The economic policy based upon theseideas is often called the mercantile

system.

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Discoveries of new landsDiscoveries of new lands

y New landy In 1492, Columbus reached America

y Later people from Europe moved to America in thenext 4 centuries

y The native system were destroyed and Europe beganto dominate

y In 1776, America got independence from Britain

y Most of the countries across the world became

colonies of one or the other European colonialpower. Such as

England

France

Dutch 10


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European powers..European powers..

y European powers were at one point

of time virtually dominating the whole

world

y Lots of gold, silver and other

resources were transferred from

colonial nations to the European

countries

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TheoryTheory

y Was developed due to the difficulties

associated with feudalism

y Mercantalist theory believed that theworth of a nation is decided by the amount

of gold and other resources that nation

possessy This theory believed that economic

development is possible only through

beggar thy neighbor policies12


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y As a result they were following all possible

method to enrich their treasury

y Piracy was accepted and followed as a method to

amass wealthy Later the European powers went in search of

new lands to dominate countries and acquire

resources

Gold and silver were taken from America,

Textiles and wealth from India,

people were taken as slaves from Africa and America

y Mercantilist system was in existence till 17th

Century

ResourcesResources

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zerozero--sum gamesum game

y Mercantilists viewed the economic system

as a zero-sum game; where a gain by one

party requires a loss by another.

y Thus, any system of policies that benefited

one group would by definition "harm the

other", and there was no possibility of

economics being used to maximize thecommonwealth, or "common good.

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Benefits to economyBenefits to economy

yMerchants benefited greatly from the

enforced monopolies, bans on foreign

competition, and poverty of theworkers.

yGovernments benefited from the

high tariffs and payments from themerchants.

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prisoner's dilemmaprisoner's dilemma

yplayers are rewarded for

defeating against their

opponents - even thougheveryone would be better off

if everyone could cooperate.

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CAPITALISMCAPITALISM

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CapitalismCapitalism

y Capitalism generally refers to an economic

system in which the means of production are

mostly privately owned and operated for profit,

and in which distribution, production andpricing of goods and services are determined in

a largely free market. It is usually considered to

involve the right of individuals and groups of

individuals acting as "legal persons" orcorporations to trade capital goods, labor and

money

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Initial stage of

CapitalismAdam Smith

Wealth of Nations 1776

More number of Businesses

Distribution of wealth

Laid the foundation of Capitalisation

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conceptsconcepts

yComponent concepts used in

defining capitalism

private ownership, markets, and

investment

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Adam Smith & othersAdam Smith & others

y Criticized monopolies, tariffs, duties, and

other state enforced restrictions of his

time and believed that the market is the

most fair and efficient arbitrator ofresources.

y This view was shared by David Ricardo,

second most important of the classicalpolitical economists and one of the most

influential economists of modern times

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RicardoRicardo

y developed the law of comparative advantage, which

explains why it is profitable for two parties to trade,

even if one of the trading partners is more efficient in

every type of economic production.This principle

supports the economic case for free trade.y Ricardo held the view that full employment is the

normal equilibrium for a competitive economy.

y He also argued that inflation is closely related to

changes in quantity of money and credit and was aproponent of the law of diminishing returns, which

states that each additional unit of input yields less and

less additional output.

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MAX WEBERMAX WEBER

y The origins of capitalism rested chiefly inthe rise of a new entrepreneurial 'spirit' in

the political and cultural realm.

y Associated capitalism with the advance of

the business corporation, public credit,

and the further advance of bureaucracy of

the modern world

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Lasseiz affaire PolicyLasseiz affaire Policy

yGovernments are notexpected to interfere in the

affairs of businessyThe means of production beprivately owned and operated

for profit through markets.

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19th century19th centuryy In the late, the control and direction of large areas of

industry came into the hands of financiers.

y This period has been defined as "finance capitalism,"

characterized by the subordination of processes of

production to the accumulation of money profits in afinancial system.

y Major characteristics of capitalism in this period

included the establishment of large industrial cartels or

monopolies; the ownership and management of industry

by financiers divorced from the production process;

y and the development of a complex system of banking,

an equity market, and corporate holdings of capital

through stock ownership.

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Late 19th and early 20th centuryLate 19th and early 20th century

y capitalism has also been described as an

era of "monopoly capitalism," marked by

movement from laissez-faire ideology and

government policies to the concentrationof capital into large monopolistic or

oligopolistic holdings by banks and

financiers, and characterized by thegrowth of large corporations and a

division of labor separating shareholders,

owners, and managers26


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Criticism of CapitalismCriticism of Capitalism

y Some religions criticize or outright oppose

specific elements of capitalism. Some traditions

of Judaism, Christianity, and Islam forbid lending

money at interest, although methods of Islamicbanking have been developed.

y Christianity has been a source of both praise

and criticism for capitalism, particularly its

materialist aspectsy seemingly unfair and inefficient distribution of

wealth and power

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INDUSTRIALISATIONINDUSTRIALISATION

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IndustrialisationIndustrialisation OROR

IndustrialRevolutionIndustrialRevolution

y Is a process of social and

economic change whereby a

human society is transformedfrom a pre-industrial to an

industrial state

y It is a part of widermodernization process.

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ChangesChanges

yThis social and economic change is

closely intertwined with

technological innovation, particularly

the development of large-scale

energy production and metallurgy.

y

The world's first industrialised citywas Manchester in northwest

England.

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Time periodTime period

yThe period of 50 years between 1780-

1830 is believed to be period of

industrialisation in the west

y

The invention of steam engineresulted in the process of

industrialisation

y

As a result new industries were set upin England

In the field ofTextiles

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TransferofknowledgeTransferofknowledge

y

Workers who were trained in the technique mightmove to another employer or might be poached.

y A common method was for someone to make a study

tour, gathering information where he could.

y During the whole of the Industrial Revolution and for

the century before, all European countries and America

engaged in study-touring

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Industrial RevolutionIndustrial Revolution

Based on Indian Resources????Based on Indian Resources????yWilliam Digby a British

Parliamentarian had openly

admitted that Englands industrysupremacy owed its origin to the

vast hoards of Bengal and

Karnataka made available for itsuse

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QUOTEQUOTE

y

Jeffrey Williamson ofHarvard University

shows that de-industrialization took

place in India around thesame period

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Debate???Debate???

y Some have stressed the importance

of natural or financial resources that

Britain received from its many

overseas colonies or that profits

from the British slave trade between

Africa and the Caribbean helped fuel

industrial investment.

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DevelopmentsDevelopments

y During that time, an economy based on manual

labour was replaced by one dominated by

industry and the manufacture of machinery.

y

It began with the mechanisation of the textileindustries, the development of iron-making

techniques and the increased use of refined

coal.

y Trade expansion was enabled by theintroduction of canals, improved roads and

railways.

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ILLILL--EFFECTOFEFFECTOF

INDUSTRIALISATIONINDUSTRIALISATIONy Industrialization resulted in an increase in

no.of industries in England

y

There was no rules and regulations in placeto protect the interests of the working

class. As a result there was a wide spread

discontent in the society

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Health problemsHealth problems

y Modern stressors include noise, air, water

pollution, poor nutrition, dangerous

machinery, impersonal work, isolation,

poverty, homelessness, and substanceabuse.

y Health problems in industrial nations are

as much caused by economic, social,political, and cultural factors

y Industrialisation has become a major

medical issue world wide,38

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Western Economies- Feudalism

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