Write a detail note on commercial capitalization.

The international encyclopaedia of social sciences refers to capitalism as the economic and political system that in its industrial or full form first developed in England in the late 18^th century.

Dictionary of social sciences explained capitalism as denoting an economic system in which the greater proportion of economic life, particularly ownership of and investment in production goods, is carried on under private(i.c, non-governmental) auspices through the process of economic competition with an avowed incentive of profit.

Marxist historians have identified a series of stages in the evolution of capitalism---for examples, merchant or commercial capitalism, agrarian capitalism, industrial capitalism and state capitalism, and much of the debate on origin and progress Has hinged on differing views of the significance, timing and characteristics of each stage. The first stage, i.e. mercantile or commercial capitalization provided the initial thrust and impetus for capitalization in the sense that merchants started becoming entrepreneurs to cater to market demands by employing wage labourers as well as by exploiting the existing craft guilds. Commercial capitalization metamorphosed into industrial capitalisms, which again, according to Marxist economist, gave way to socialism, because industrial capitalism was inseparably connected with problems of the working class, this invariably gave rise to different currents of socialist thoughts.

 Commercial capitalism and agrarian capitalism were, therefore, two forms of capitalism that overlapped with each other, the difference between them being that one emerged out of commercial surplus while the other out of agricultural surplus. Agrarian capitalism sometimes metamorphosed fully into commercial capitalism i.e. invested the entire surplus accumulated from agriculture into commerce and sometimes transformed directly into industrial capitalism by investing in industrial development alone.

In all this stages of capitalism, identified by the Marxist historians, therefore, the first stage was merchant capitalism or commercial capitalism. Now, what is it? Precisely, capital accumulation out of the profits of merchants to be invested in various economic activities was what is called commercial capitalism. It took different forms in different stages.

In middle age, however, the form assumed by commercial capitalism was entirely different. It was during this time that it developed in the true sense. In England, and even more emphatically in Holland, the birth of capitalism can be dated from the late 16^th and early 17^th centuries. The type of capitalism t5hat was growing up in Europe in the Middle Ages and was well established by 1500 was predominantly of this sort. Here lay the distinction between commercial capitalism, of the ancient and middle ages.                                               

    It can therefore be said that a limited form of ‘early’ or commercial capitalism, already known in the ancient world, had developed in Italy as early as the thirteenth century and later in the Low Countries. This commercial form developed in England in the 16^th century and began to change into industrial capitalism while elements of feudalism and the guild system still existed. In short, therefore, the early stage of capitalism, primarily founded upon commerce is called commercial capitalization, which in course of time metamorphosed into industrial capitalism. Capitalism therefore did exist in ancient world in the form of commerce as well as guild system and merchant dominated putting out system in the medieval world.