Merchant capitalism

Economic historians use the term merchant capitalism to refer to the earliest phase in the development of capitalism as an economic and social system. Early forms of merchant capitalism developed in the medieval Islamic world from the 9th century, and in medieval Europe from the 12th century. In Europe, merchant capitalism became a significant economic force in the 16th century. The mercantile era drew to a close around 1800, giving way to industrial capitalism. However, merchant capitalism remained entrenched in some parts of the West well into the 19th century, notably the Southern United States, where the plantation system constrained the development of industrial capitalism (limiting markets for consumer goods) whose political manifestations prevented Northern legislators from passing broad economic packages (e.g. monetary and banking reform, a transcontinental railroad, and incentives for settlement of the American west) to integrate the states' economies and spur the growth of industrial capitalism.