How Fast and Why Did Early Capitalism Benefit the Majority?

In: The journal of economic history, Volume 55, Issue 2, p. 211-226

Abstract

How long did it take for early rapid capitalist transformations to benefit the majority of the population? This essay examines three presumed success cases, concluding that rapid capitalist development took at least five decades to benefit the majority. A neglected political force for success was the effectiveness of local public and quasi-public institutions in creating wide networks of transportation and other public investments responsive to changing market requirements. Economists today should pay close attention to distributional benefits and local government effectiveness before urging western brands of capitalism on countries where failures to benefit the majority threaten severe political instability.