Capitalism and it's Impact Upon our World
The world that we live in today is vastly different than the one that existed
before capitalism. Our world has seen many changes as it was transformed
from a traditional to a modern society on a global scale. In making that
transition, there have been both positive and negative consequences that have
occurred worldwide. One of the positive occurrences has been the success of
the industrial revolution. However, there have been devastating consequences
such as a further divide between the rich and poor, and an increase in global
warming. Most of the people that have felt the negative effects of capitalism are
those that live in third world countries. This has been because of their status
and lack of power as compared to first world countries. These negative effects
are strictly due to the implementation of capitalism. "Capitalism was the system
which gave legal, political, and social sanction to land, labor, and capital as
separate market entities, convertible into money terms or prices"(Reilly, p.
109). Capitalism, to say the least, has had profound and everlasting effects on
people as well as the environment on a global scale. These effects are
irreversible and significant, changing not only the lives of the people that have
been affected but also our world forever.
Colonialism and Capitalism
The historical geography of colonialism and the slave trade
in third world cities is a contributing factor as to how and why third
world cities embody the most salient features of the modern global
economy. Most countries that are considered to be third-world countries
today, were at one time colonies during the colonial era. The only
exceptions to this are the United States, Canada, New Zealand, and
Australia. The underdevelopment of third world cities is marked by a
number of common traits such as having distorted and highly
dependent economies devoted to producing primary products for the
developed world and to provide markets for their finished goods. Other
traits include traditional, rural social structures, high population
growth, and widespread poverty. Nevertheless, the third world is sharply
differentiated, for it includes countries on various levels of economic
development. Despite the poverty of the countryside and the urban towns
that exist in the third world (and even first and second worlds), the
ruling elites of most third world countries are wealthy.
During the time of colonialism, many people were displaced from their land
because of the slave trade and were transported to other countries. "One
consequence of the slave trade was that it generated vast wealth for the
European and New World interests who participated in it, both from the sale of
people into human bondage, and from the income gained from the labor of
slaves and their progeny" (Porter and Sheppard, p. 319). This difference in
wealth created the basis for large mercantile and maritime companies in the
eastern ports of the United States as well as in Europe. It also provided the
means for plantation economies of the Caribbean and southern United States to
prosper and played a role in the industrialization of Europe. This led to a vast
amount of wealth and contributed to the differences in people socially and
financially speaking. "The legacy of the colonial experience continues to
permeate many aspects of economic and social life in third world
countries" (Porter and Sheppard, p. 332). Some examples of this can be seen
in the way the former colonies have economic and trade dependencies, which
leaves them closely tied to the former colonial occupier.
Divisions of Race
The implementation of capitalism had a direct and profound division
between different races of people. "The European colonial enterprise was
firmly based on African slavery, and historians have long acknowledged that
the very creation of capitalism as an economic system was inextricably
intertwined with the trans-Atlantic slave trade and the wealth generated by the
slave trade and the labor of those enslaved peoples" (The Trans-Atlantic Slave
In the United States and South Africa, people often thought of
themselves with regard to what race they were instead of what class they
were. "People often thought of themselves (and others) as members of a race,
rather than as representatives of a particular social class, income group,
religion, or even gender. The white boss (a redundacy in itself) saw the
African first as a black, then as an individual who happened to be a
Christian, poor, or male.(Reilly, p. 181).
Slaves were used because of their cheap labor which fueled the
discrimination due to race in the United States as well as in South Africa.
Even though slavery was eventually abolished, racial discrimination still
existed in both of those countries and racial segregation was the norm for
both South Africa as well as the United States.
During the first half of the 1900's, racial inequality and segregation
was practiced in most areas of the United States as well as in South Africa.
In South Africa, even though the British granted it's independence in 1910,
they only gave power to white people. In 1948, the National Party gained
office in an election where only white people were allowed to vote. The
National Party then began a policy of racial segregation known as apartheid,
which means "apartness". This led to further discrimination against blacks.
In the early to mid- 1900's, racial discrimination became worse in many
parts of the United States. Strict segregation and "Jim Crow Laws" were very
common in the South. Jim Crow was considered to be the title or name of the
practice of discriminating against black people, through a set of laws
passed in the southern states, after blacks had earned their freedom from
slavery. These laws segregated white and black people with the use of
railways and streetcars, public waiting rooms, restaurants, theaters,
public parks, libraries and cemeteries. The laws also required blacks to use
separate phone booths and bathrooms, and in some cases, deprived blacks of
the right to vote. Both the United States as well as South Africa can be
looked to as an example of how two different countries were experiencing
much of the same problems of racial discrimination and segregation at the
same time as a direct result of capitalism.
"Racial segregation unifies South African and United States history, because both societies made an important investment in racial segregation in the twentieth century. We might date the reign of racial segregation in the United States from the Supreme Court Decision of Plessy v. Ferguson in 1896 to that of Brown v. Board of Education in 1954, although it began earlier and has continued in residential and other "voluntary" forms since. In South Africa we may date segregation from shortly after the founding of the Union of South Africa in 1910 to the collapse of the apartheid regime in 1989" (Reilly, p. 189).
While we can look to the court decisions mentioned above as the official
and legal end of racial segregation in the United States and South Africa,
divisions of class still existed. To this day, there is still evidence of
discrimination between white and black people. One of the more recent, and
famous court cases that evidence this is the infamous Rodney King beating
trial where two Los Angeles Police deputies were accused of beating a man
because of the color of his skin.
Methods of Exchange
As a result of capitalism, methods of exchange were greatly altered.
"Capitalism has been defined in a lot of different ways. Any useful definition,
however, must describe a series of very recent economic developments in
Western history over the last five hundred years or so" (Reilly, p. 101). One of
the key elements of a traditional society was the method of distribution or
exchange, which was based upon systems such as reciprocity, redistribution,
and householding. The form of exchange called householding is a system where
everyone works and contributes for the benefit of everyone that lives in a
particular household. There are no prices or exchange of money involved and
everyone benefits in one way or another. Reciprocity is based upon the notion
of giving. Members in a household give their work to other members, from
which they will receive a gift in return. The method of redistribution is more of a
forced type of exchange in which goods are collected much like taxes, and are
kept in one location for redistribution later one. None of these traditional
methods involved money, bargaining, or price. The modern society replaced
these systems of distribution and exchange with capitalism. This was in stark
contrast to the traditional forms of exchange because everything was fixed with
a price and everything was bought or sold for a price.
The Industrial Revolution was widely regarded as the hallmark of
capitalism. In the eighteenth century, all of Western Europe began to
industrialize rapidly. The industrialization brought with it an increase in
population, urbanization, as well as new social classes. During this time, there
were many great inventions that came about. The steam engine and locomotive
were only two of many other inventions that contributed to the success of this
time. "With locomotives and steamships, goods could now be transferred very
quickly across the country or ocean, and within a reasonably predicted time,
since the steam plants provided constant power, unlike transportation relying
on wind or animal power" (The Industrial Revolution). This was a very
important invention because it cut the time as well as costs down significantly
for the transportation of goods.
Third World City Planning
Capitalism brought various degrees of fortune for different cities. Some
cities profited from capitalism because of their locations and others were unable
to attract the new activities of industrial commodity production and trade. The
combined development of colonialism and capitalism in Europe brought with it
historically unprecedented rates of urbanization. Most third world cities "have
been conditioned by European colonial influence, notwithstanding the extensive
precolonial history of urbanization in selected regions throughout the third
world. In regions where there was little indigenous urbanization, colonial
contact dramatically altered the spatial organization of the administered or
conquered territory" (Porter and Sheppard, p. 438). European colonialists
were responsible for the introduction of a distinct spatial structure to third
world cities. European city planning implemented its networks of wide streets in
both residential and commercial areas which were important for transportation
in the days of colonial administration and production. "City plans spatially
segregated colonists, merchants (often ethnically distinct from the majority of
the population), and indigenous people into different parts of the city, as well as
zoning commercial and residential activities into different areas" (Porter and
Sheppard, p. 445). However, these plans were utilized for colonized cities
which left indigenous cities with little or no separation of classes and activities.
Contrary to the wide residential streets in the colonized cities, indigenous cities
had narrow, winding, unmarked streets which could only be navigated by
people who were local residents.
The Divide Between Rich and Poor
Capitalism itself is responsible for further widening the existing
divisions between the rich and the poor. To this day, the people of
third world cities often are exploited for their cheap labor. The
innovation of EPZ's (Export Processing Zones) is a good example of
this. EPZ's seem to be tailored to benefit industry owners instead of
the worker in the third world. The comparative advantage of the EPZ
location is that industry owners gain a workforce that is paid minimal
wages. "Workers recruited to EPZ's must be willing to carry out
repetitive, unskilled tasks for long hours and low wages. There has been
heavy recruitment of young female workers, who are perceived to have
been socialized to be both docile and dexterous assembly workers"(Porter
and Sheppard, p. 423). These women earn between .17 cents to a dollar
an hour. Because of the nominal wages paid and the long hours worked,
this contributes to the suppression of women as well as the
deterioration of health and the poverty level in third world countries.
One can see the differences in third world cities in comparison to
first world cities simply by the way the people live. The people of
third world cities often are very poor and consequently do not have
adequate housing. Oftentimes, housing consists of cardboard with a
plastic sheet laid across the top and no source of water. Most people
have no legal title to the land that they upon which they have built
their dwellings. The informal sector in third world cities can be seen
in the goods that are sold on street corners, prostitution, guarding
parked cars, peddling wares, and other activities. "The informal sector
includes many of the only options open to new in-migrants and longer-
term residents alike, struggling to gain a foothold in a metropolitan
economy that has few conventional jobs to offer" (Porter and Sheppard,
As a result of an increase of consumption of our earth's natural
resources, our environment is being subjected to many adverse effects.
One of these effects is in the form of global warming. "Global warming
from greenhouse gases (so called because they trap solar radiation like
the glass roof of a greenhouse)has increased with mounting use of fossil
fuels, making the earth warmer than it has been since the fourteenth
century" (Reilly, p. 359). First world nations such as the United
States are responsible for the majority of this problem. The United
States alone is responsible for one fourth of the world's emissions of
greenhouse gases. "Of the top five nations in carbon dioxide emissions,
the United States is first with more than the combined total of the next
four, China, Russia, Japan, and India" (Reilly, p. 360).
Our world has been subjected to many different impacts as a result
of capitalism. While there have indeed been successes, there have also
been devastating impacts to our environment and to people on a global level
which cannot be taken back. Unfortunately, most of the negative impacts have
occurred as a result of an abuse of power by first world nations upon third
world nations, as a result of capitalism. It is imperative that we learn from the
past in order to preserve our future. The actions of first world countries need to
beheld to a higher standard in order to protect third world countries from
further abuses of power. Only by taking a good look at our history can we
implement changes that will be for the common good of everyone in the future.
"The Industrial Revolution." 9 June 2003.
Porter, Philip W. and Sheppard, Eric S. A World of Difference. The Guilford
Press. New York, NY. 1998.
Reilly, Kevin. "The West and the World: A History of Civilization." Third
Edition. Markus Wiener Publishers. 2002.
"The Trans-Atlantic Slave Trade". 11 June 2003.