4.3 Development of Early Capitalism

4.3 Development of Early Capitalism Capitalism's Development and Importance • Capitalism used accumulated capital to expand productive capacity, not invest in unproductive enterprises. • Historical events encouraged this development. • Ancient European cities and towns were destroyed after the collapse of the Roman Empire. • Trade revived slowly, and old Roman cities were restored. • Towns became centers of production and exchange. • New long-distance international trade became important, leading to big profits. • Trade problems included transport difficulties, insecurity from war and robbery, and heavy tolls on commodity transit.