Capitalism | Factors Leading to the Rise of Capitalism

The Industrial Revolution gave rise to the theory of capitalism. Money is required for purchasing land, labor, and machinery which are important means of production. When the money is invested to generate more money, it is known as capital. The people who own capital are known as capitalists.


  • The economic and political system in the country where trade and industries are controlled by private owners for earning profit is known as capitalism. The capitalists provide money for purchasing machines, tools, implements, and raw materials.
  • To earn a profit is the main motive of the capitalists

Factors Leading to the Rise of Capitalism

Increase in Population:

The Industrial Revolution increased the national wealth and improved the purchasing power of people. An increase in income led to the improvement in health care facilities, which led to the country’s increase in population. People moved from rural to urban areas in search of job opportunities. The rural population rose sharply as new sources of food became available and death rates declined because of the decreasing number of wars and epidemic diseases like plague.

Growth of Towns:

Many new cities and manufacturing sectors came to be located close to the coalfields and supplied fuel to the factories. Factories came to be located near the source of raw materials. This further led to the rise of capitalism.

Mass Production:

In factories, machines helped in producing and manufacturing goods on a large scale. People living in the rural areas shifted to towns in search of employment. Mass production enabled the capitalists to amass huge wealth and gave rise to capitalism.

Disappearance of Small Farmers:

Many small farmers shifted to new industrial towns. Because their lands were appropriated by the big landlords, they were forced to seek employment in factories. The availability of abundant labor for factories helped in the development of the Industrial Revolution.

Impact of Capitalism

The impact of capitalism was as follows:

Loss of Traditional Jobs:

The movement of people from villages to urban cities resulted in the loss of traditional jobs. Women who were engaged in spinning lost their livelihood as weaving became highly mechanized. Skilled laborers also lost jobs as machines replaced them.


The workers in a factory lived an extremely hard life. They were paid the minimum wages. Women and children were also employed in large numbers as they could be employed for very low wages. Soon people began to criticize this system of exploitation.


The workers were paid low wages, and they lived in enclosed overcrowded spaces. This resulted in the spread of various diseases. Although the economy of Britain developed at a fast pace, vast inequalities existed between the rich and the poor.

Longer Hours of Work:

The workers were exploited by the industrialists. They were supposed to work for longer hours. The workers were expected to work for about 12−14 hours per day.

Also, Read Modern age in Europe – Industrial Revolution

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