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Competitive capitalism refers to the second stage of capitalism that existed after industrial revolution in Europe in 1750, where by European nations were competing theals, monopolizing trade and market. Therefore under industrial capitalism there rose bitter struggle/stiff competition among Europemselves in Industrial production.

This was done in terms of production of raw materian capitalists for production, whoever in the course of this stage some capitalist were died while others who were able to compete grow richer and reached to a stage of monopoly capitalism, hence in order to survive the capitalists increased labour productivity which was done through introduction of more efficient machines hence competitive capitalism was always progressive because of time and free trade and accelerated to the rise of monopoly capitalism. The following are some of the characteristics of competitive Capitalism.

1.During this period the role of the state was minimal, this was because of the belief of free trade, and this sometimes was called “laissez faire policy”.

2.Most of the enterprises were small and competitive in nature hence there was no monopoly in market, area for investment, getting labor and monopoly of getting raw materials because each enterprise was competing with another to get economic motive.

3.During this period raw materials from Africa were important but not crucial because raw materials were only needed to be used in monopoly companies which had started to monopolize the market, areas for getting labor and raw materials.

4.The tariff policies (trade barriers) were still protective in nature because each nation was still protecting her home market in order to allow merchants to involve in trade at home without any competition from outside merchants.

5.Banks were not controlling production but they were only the agents of payment where by banks provided capitals, loans and credit to the merchants to continue involve themselves in trade for development of capitalism but not these banks but not these bans were involved in production.

6.Competitive capitalism was characterized by the growth of industries where by industries grew specifically for producing manufactured goods which were needed and sold by industrial capitalist in Europe (Britain).

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