Spread of Industrialization Britain – produced one half of the world’s coal and manufactured goods Cotton industry alone in 1850 was equal in size to the industries of all other European countries combined

Steam Engine James Watt, Scottish Engineer Made changes that enabled the steam engine to drive machinery Did not need to be located near rivers, Cotton cloth Britain’s most valuable product

Food Supply More farmland Good weather Better transportation New crops - Potato

Natural Resources Many rivers for transporting raw materials and finished products Abundant supply of coal and iron ore

Factors of Production LAND - LABOR - CAPITAL Food People Capital Markets

Labor Population grows Enclosure movement – large landowners could fence off common lands Peasants are forced to move to towns and work in factories

Capital Wealthy British entrepreneurs sought new business opportunities Capital – to invest in new industrial machines and factories

Cotton Production! Two steps Spinners made cotton thread from raw cotton Weavers wove the thread into cloth on looms *Cottage industry – usually done in people’s homes

Spinning Jenny 1768, James Hargreaves invents Spinning Jenny Spinning process becomes much faster Thread produced faster than weavers could use it

Flying Shuttle Makes weaving faster Could produce cloth at a faster rate However, needed a way to produce more thread from spinners

Europe Spreads to Belgium, France, German States Governments encourage development Funds for roads, canals, railroads

Railroads 1804, first steam powered locomotive ran in Britain (5 mph!) THE ROCKET! – 1830 – 32 miles from Liverpool to Manchester (20 mph!) Within 20 years able to reach 50 mph 1850 – 6,000 miles of railroad track

Europe: Social Impact Pop Growth – 1750 – 140 million Decline in death rates, wars and diseases Increase in food supply, people resistant to disease

Cities Britain, 1800 Pop of 1 million 1850, 2,363,000 Over half the population lived in towns and cities *led to awful living conditions

Railroads

What do they have to do with stocks? Look at page 296 - 297 Define corporation What do they have to do with stocks?

Laissez-faire Adam Smith Capitalism

Socialism Karl Marx communism

Capitalism Ownership of the means of production (capital) by private investors Laissez-faire – gov’t shouldn’t be involved in the economy Individual worker is more important - Competition Adam Smith

Socialism the state owns the means of production (capital) Gov’t should be in total control & make sure wealth is distributed evenly Society as a whole is more important - cooperation Friedrich Engels & Karl Marx

Karl Marx Effect Marx writes The Communist Manifesto – 1848 “World History is a history of class struggles.” Believes the proletariat (working class) is divided against the bourgeoisie (middle class) After a proletariat victory, a dictator (single ruler with absolute power) will take control. Theory of socialism – theory in which society, in the form of government, owns the means of production (government owns factories, mills, etc.) One form is known as Communism 1875 – Germany – German Social Democratic Party begins to take hold of German parliament.

Karl Marx Socialist Parties and Trade Unions emerged in 1870 Theory on which they were based developed in 1848 by Karl Marx as written in… The Communist Manifesto

Karl Marx Two classes: Bourgeoisie & Proletariat Bourgeoisie – middle class, including merchants, industrialists, professional people ARE THE OPPRESSORS Oppressors – owned (land, raw materials, money, factories, etc.) means of production controlled government and society

Karl Marx Proletariat – the working class, WERE THE OPPRESSED Oppressed – depended on the owners of the means of production (people who worked for the oppressors) * Bourgeoisie and Proletariat ‘stood in constant opposition to one another’

Karl Marx Struggle would result in a violent overthrow of the bourgeoisie by the proletariat Economic differences would wither away Classless society would develop, State withers away

Karl Marx Appalled at the horrible conditions in factories According to Marx, Capitalism was the problem “All of world history is a history of ‘class struggle’” Karl Marx & Friedrich Engels

Trade Unions in Great Britain 1870s – win the right to strike Leads to higher wages (more pay), better conditions, and collective bargaining (negotiations between union workers and employers)

Trade Unions Some Marxists just wanted reform Labor Unions used strikes (work stoppage) to raise wages, better working conditions, gain the right to collective bargaining Negotiations between union workers and employers