commercial capitalism

economics

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June 24, 2026

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Commercial capitalism, emerging in the 17th and 18th centuries, marked a significant shift from mercantilism. Unlike mercantilism, which relied on government monopolies and regulated prices, commercial capitalism emphasized market coordination. Production and distribution were largely entrusted to market forces, with wages determined by supply and demand, and companies exposed to competition rather than protected by monopolies.1

This era saw a clear division between political and economic realms. Government's role narrowed to national defense, protection from injustice, and public works, while commerce expanded. The accumulation of capital became the driving force, with firms expanding operations, leading to finer divisions of labor and increased efficiency. This system, described by Adam Smith, harnessed the universal drive for material betterment, curbed by competition, to direct productive activity toward meeting public wants at competitive prices. The Commercial Revolution, a precursor, saw a surge in overseas trade, the rise of chartered companies, and the establishment of new financial institutions, setting the stage for the Industrial Revolution.12

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economic system
From mercantilism to commercial capitalism
…18th-century stage is called “commercial capitalism,” although it should be noted that the word capitalism itself does not actually appear in the pages of Smith’s book.
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…18th-century stage is called “commercial capitalism,” although it should be noted that the word capitalism itself does not actually appear in the pages of Smith’s book.
Read More