I'm a History major studying the Early-Modern and Modern era, so Capitalism and it's origins are of major interest to me. But what exactly are the origins of Capitalism? I've read quite a bit on joint stock companies and things like the East India Company, and it seems like the origins of Capitalism come from monopolies, rather than the liberal (European liberalism) myth that Capitalism arises from free market competition. Does anyone know of any good works on the issue? Also, I've been reading Marx's writings on the Opium war, and he makes an interesting comment that at the bottom of the advocates for free trade, a monopoly is always found- in the 19th century of "free trade". How truly free market was the 19th century? It seems like monopolies dominated more than anything else.
One of the most famous works on exactly this topic is The Protestant Ethic and the Spirit of Capitalism by Max Weber, who was a hugely influential thinker and generally regarded as a founding father of Sociology.
Weber argued that the Protestant Reformation inadvertently brought about major economic change that ultimately led to the birth of Capitalism. He said that under Catholicism, Western Europe was primarily a subsistence economy in which economic surplus was largely consumed by the institutions of the Clergy and squandered, yielding no long-term economic benefit (he, like Martin Luther centuries before, wasn't sold on the idea that purchasing indulgences was a useful economic engine).
Weber believed that the Protestant reformation, and its associated rejection of the Clergy as a wealthy aristocracy, led to a subtle but significant change in the way European economies functioned. Instead of surpluses being entirely siphoned off by a bloated aristocracy, they were reinvested into farms, mills, trade and 'businesses' that formed the economic engine of renaissance Europe. This led to compounding economic growth in a way that was largely unprecedented. Surpluses continued to be reinvested and so subsistence was replaced with economic growth, which helped lay the foundation for the market economy.
These ideas are both foundational and contentious (in the way that lots of century-old social theory is). Critics have pointed out, among other things, that many influential Capitalist thinkers were Catholic, and that Capitalism also flourished in places like Italy largely devoid of Protestants. His ideas, however, are probably the most famous 'historical' answer to the origins of capitalism, and are still well-respected, with caveats, today.