The Origins and Development of Capitalism

Contrary to the assumption that capitalism has always been the dominant economic system, historical records show that it originated in the medieval period and didn't become a major force in Western society until the 18th century. It is defined as a system in which economic decisions are made by individual private business owners and financiers, with governments creating legislation and regulations that facilitate private investors' freedom of action. The wealth of the Italian family banking firms in the Renaissance, Indian banking families, and the Dutch and English in the 17th century played significant roles in the slow development of capitalism. However, it was not until Enlightenment thinkers like the physiocrats and Adam Smith that capitalism began to be systematically theorized and expressed.