Laissez-faire Capitalists 622 Adam Smith Thomas Malthus David Ricardo In the early 1800’s, middle class business leaders embraced this “hands-off”, approach. Many thinkers tried to understand the great changes taking place in the early ‘Industrial Age’. 1

Top of page 623 Did large families make life easier or harder for working people? -More hands to work but also more mouths to feed. What kinds of problems came with overpopulation? Lower wages, unemployment and poverty 2

3 Laissez-faire 622 Adam Smith- The free market would help everyone and produce more goods at lower prices, making them affordable to everyone. Thomas Malthus- Believed the poor would always suffer and stated the population will grow faster than the food supply. Believed people should improve their own lives through hard work and less children. David Ricardo- “Iron law of wages”…Wage increases only encouraged larger families. “Free market is best cure for the poor not government relief.”

4 bottom of page 623 Utilitarianism The goal of society should be “the greatest happiness for the greatest number” of its citizens. Individual freedom, but wanted government to step in to prevent harm to workers. Jeremy Bentham John Stuart mill

Social Thought: Socialism What are the means of production? Pg 625 Farms, factories, railways and large businesses What is the name of the system in which individuals own the means of production? Capitalism Why did socialists believe that private ownership of the means of production was bad? Always lead to wealth for the rich and injustice for the poor. 5

Social Thought: Socialism – Socialists – viewed the capitalist system as inherently wrong Belief that capitalism is designed to create poverty and poor working conditions because of its end goal of earning maximum profits for investors – Socialism – government owns the means of production Belief that if the government (“the people”) owns the means of production, these factories and industries will function in the public (as opposed to private) interest 6

Social Thought: Socialism Socialism To end poverty and injustice, some offered a radical solution in socialism. What did early socialists believe? Under socialism all ‘means of production’ - the farms, factories, railways, and other businesses- would be owned by the people as a whole, not by individuals. 7

Social Thoughts Utopianism – Robert Owen & New Lanark 1.First Socialists 2.Strove to create a fair and just system 3.Community divided tasks and rewarded equitability 8

Robert Owen Utopian socialist Owned a textile factory in New Lanark, Scotland Decreased working hours Improved working conditions and employee housing Shared management and profits with employees Proved that a socialist-based company could be profitable 9

Social Thought Socialism 1.Utopianism – Robert Owen in Scotland 2.Communism – Karl Marx & Friedrich Engels 1.Bourgeoisie vs. Proletariat 10.

Social Democracy / Communism Communism 1840 ( Germany) – Karl Marx (German philosopher) & Friedrich Engels condemned the ideas of Utopians. Communist manifesto- Argued “the history of class struggles” - between the ‘haves’ and ‘have-nots’ or the bourgeoisie vs proletariat (working class) MARX PREDICTED: In the end Marx claimed the proletariat would be triumphant! 11

Social Democracy / Communism Communism Workers Marx claimed would then take control over the ‘means of production’ and set up a classless community. 1900’s many nations would adopt this idea through revolution such as: Russia, Asia, Latin Americas & Africa. Social Democracy- Gradual transition from Capitalism to socialism without the violent overthrow * As time passed and many failed, IT WOULD NEVER BE PRACTICED EXACTLY AS HE IMAGINED!!! 20 th century few nations remained communist. 12.

Social Democracy / Communism Checkpoint 626 How accurate did Marx’s predictions about social classes prove to be? Marx was wrong about international revolution, and by the 1900’s few communists countries remained. The failures of Marxist governments would illustrate the flaw’s in Marx’s arguments. 13

Marxism – Communism Economic changes lead to historical changes. Historically, the wealthy classes have held all power. Economic Interpretation of History History has been a struggle between the rich and the poor. In the Industrial Revolution, the struggle is between the Bourgeois capitalists (owners of the means of production) and the proletariat (workers). Class Struggle Workers produce all wealth but receive only enough to survive. “Surplus value” (profit) of the workers’ labor goes to the capitalists. Surplus Value Industrial wealth leads to the concentration of wealth among fewer and fewer capitalists, while the living and working conditions of the proletariat grow worse. The proletariat will eventually rebel and create a socialist state. Inevitability of Socialism

Social Thought 1.Utilitarianism – Jeremy Bentham & John Stuart Mill 1.Suffrage 2.Capitalism – David Riccardo & Thomas Malthus 1.Laissez Faire 2.“Iron Law of Wages”

Downside? Acute labor problems Workers guilds decline Development of proletariat class vs. capitalist class Socialism and early utopian societies based on utilitarian ideas (utopian socialists): Scotland and U.S. = Robert Owen Communism

Organizing the Working Class Karl Marx ( ) and Friedrich Engels ( ), The Communist Manifesto – History is that of class struggles – Overthrow the bourgeoisie – Eventually there would be a classless society