NEW IDEAS IN A NEW SOCIETY Chapter 21.3

New Ideas about Economics Capitalism and Competition  Mercantilism was giving way to capitalism and competition  Under mercantilism gov’t restricted trade to protect their own industries from foreign competition  In the late 1700’s economist came up with laissez-faire (hands off, or free to do) economics which said the gov’t should not interfere in business.  Adam Smith-1776 he published Wealth of Nations advocating for laissez-faire economics  He wrote that free markets benefited all in a society aka market economics  Advocated for free competition  1840 England ended gov’t regulation in business  Thomas Malthus- was concerned about population growth caused by industry  he believed population would now grow faster than food production  thus, poverty and misery would never end.  Only slowed by disease, famine, and less reproduction  His theories were used to justify low wages and less charity for the poor since the problem was unavoidable

New Ideas about Economics New Roles for Business Leaders  Before IR those that owned land owned the wealth  By the mid 1800’s leaders of industry now had more influence  Very wealthy  Political Power  IR brought about the entrepreneur- someone who starts a new business  Financer, bankers, and investors who pooled their money together to create large corporations  As demand increased for capital to build factories bankers and bank became more important  Industrialist in the US created empires out of the corporations  Andrew Carnegie- born in Scotland and the best example of “rags to riches” Father forced out of work because of IR and moved to America Carnegie started working at age 12 Through hard work and smart business decision Carnegie creates and develops that steel industry in the US and becomes the wealthiest man in the US Gave over 350 million dollars to charity  Cornelius Vanderbilt – rail roads  John Rockefeller- oil All of these men drove out their competitors with better more efficient ways to produce goods They are own for the contribution to charity but treated their workers horribily

Competing Economic Views Robert Owen  Not everyone agreed with capitalism, it brought very bad working conditions for laborers and created a huge gap between the rich and the poor  He thought that for the good of all, society and government, not individuals should own property and control industry- a theory called socialism  Owned a mill in Scotland, workers enjoyed good working conditions, shopped in nonprofit stores, lived in decent homes, and earned sick pay, had free education  However, he imposed strict rules on their personal lives like a curfew  He started his idea in US in New Harmony IN he wanted to create a utopia- a ideal society where evils and poverty did not exists  Those that advocated for this type of government involvement started the social democracy movement which directly opposed capitalism

Competing Economic Views Karl Marx  Father or communism  A more radical view of socialism- communism  He believed as capitalism grew more workers would sink into poverty  He believed workers would seize control of the government and of production and capitalism would collapse  They (workers) would implement a socialist form of government where the gov’t control production and distribution- workers would est. a society based on cooperation and equal distribution  Then they would have a command economy- a system where the government owns almost all the means of production and controls the economic planning  The last step would be to implement a true communist society where the government would give up control and all the people would rule equally in a true utopia  Marx believed that capitalism disrupted the relationship between labor and profit  Should be direct connection between one’s work and one’s pay  He believed communism could fix the world’s injustices  Steps to Marx’s communism  1. Capitalism  2. Socialism  3. Communism

Effects on Society Effects on Home Life  Home work women work along side their husbands  Women not in poverty stayed at home to take care of children when the men went off to work  The world of work and home began to separate  Women and men were seen as occupying different spheres in the world  Women at home taking care of children  Men making all of the home’s income (unless in poverty women went to work)  Since men where in the business world, one devoid of morals, women were expected to be the moral compass for families  Middle class where the main people affected by this separation since middle class women did not work

Effects on Society Effect of Industrialization on Women  Women who went from cottage industries to factory work  Earned lower wages in low skill jobs  Separated from their families  Their status decreased  Other Working-Class Women  Found jobs as cooks, maids, and child-care workers because more families could afford to hire them  Found some new educational and cultural opportunities in cities  Overall improvement for many women  Middle-Class Women  Freed from chores because many could afford to hire domestic help  Began to attend college and get jobs as teachers and nurses  Those who did work often critized by people who said that they should not work outside the home  Most affected by the idea of separate spheres for men and women

Effects on Society Effects on Countries  For some nations industry brought with it great power  GB, France, and Germany eventually become global leaders in the economy  Mass production increased their ability to build ships and make weapons  As a result they were able to build their armies and conquer lands  Powerful industries could control economies in other countries  GB destroyed the cotton industry and economy of India because they were not mechanized and industrialized  The US utilized it vast amounts of land and resources and quickly industrialize and build their economy.  As a result they became a powerful leader in the world and built their army  Many immigrants wanted to move to the US for a better job which also helped their economy grow

Effects on Society Long-Term Effects on Societies  Industrialized societies increased in wealth  Much of that wealth went to the few  Over time the standard of living increased for most people in industrialized countries  Created the middle class which came leisure  People had more time on their hands and more money to enjoy things like sports and entertainment and vacations  With extra time education and improving one self became possible  Changes brought about because of the IR are still in effect today