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This introduction presents an overview of the key concepts covered in this book. The book deals with capitalism's evolution within Western Europe and its offshoots, and its spread to the rest of the world after 1848. The spread of global capitalism has two dimensions, and they can be distinguished by means of an analogy. The increased globalization across the nineteenth century was due to a combination of factors, especially the new transportation and information technologies. Late-twentieth-century growth rates by the East Asian tigers and then China have set a modern standard of 'growth miracles' hard to beat, making impressive growth spurts in the past look pretty modest. During the few decades between about 1820 and the mid nineteenth century, global migrations changed dramatically. Emigration policies changed, from restricting outflows before, to adopting laissez-faire policies thereafter. The late nineteenth century also saw a large increase in the integration of international capital markets, and in the volume of international capital flows.
Through a combination of external forces and its inner dynamics financial capitalism has been transformed over the last 250 years. Central to financial capitalism is financial innovation. It is through innovation that financial capitalism responds to external challenges and opportunities while generating its inner dynamics. The most important organizational innovation in finance was the bank. A bank is a financial intermediary whereas a moneylender is a capitalist. Almost from the inception of financial innovation in products, markets, and organization, attempts were made to minimize the risks that they posed for all users. Regulatory innovation was also found in financial markets, though much again was left to the reputation of the participants. Evidence certainly exists to suggest there is a strong correlation between a country's per capita income and financial sector development, judged by such measures as bank deposits and holding of securities.
The first volume of The Cambridge History of Capitalism provides a comprehensive account of the evolution of capitalism from its earliest beginnings. Starting with its distant origins in ancient Babylon, successive chapters trace progression up to the 'Promised Land' of capitalism in America. Adopting a wide geographical coverage and comparative perspective, the international team of authors discuss the contributions of Greek, Roman, and Asian civilizations to the development of capitalism, as well as the Chinese, Indian and Arab empires. They determine what features of modern capitalism were present at each time and place, and why the various precursors of capitalism did not survive. Looking at the eventual success of medieval Europe and the examples of city-states in northern Italy and the Low Countries, the authors address how British mercantilism led to European imitations and American successes, and ultimately, how capitalism became global.