Events and Ideas #3 Government Ideology and Economics of the Industrial Era World History Unit 3

Essential Question: Compare and contrast the three forms of government: Capitalism Socialism Communism

Why was England a good place to start a business? It was a free society It did not have many government rules and regulations that restricted what types of businesses could be started Taxes were not high on new businesses England had a history of producing goods for sale and trade

Why was Capital Needed? It costs money to build new factories and to install new machines. CAPITAL= money available for investment. ENTREPRENEUR= person (with capital) who is willing to risk their money to start a business England had people with capital (many had earned it through trade with the Americas). Industrial Capitalism = vast amounts of capital invested in machinery. i. Capital is the amount of money you have to invest. The Industrialist replaces the Merchant as the dominate actor in capitalism. i. The village or town merchant used to be the top dog of capitalism. ii. The focus shifts to the industrialist in the IR. Industrialist: Factory system of manufacturing. Work process divided. Work tasks become routine.

Capitalism An economic/social system in which the means of production are privately controlled. Labor, goods and capital are traded in a market system Profits are distributed to owners or invested in new technologies and industries Wages are paid for labor.

Capital Entrepreneurs Industrial Capitalism = vast amounts of money invested in machinery. The Industrialist replaces the Merchant as the dominate factor in capitalism. Industrialist: Factory system of manufacturing. Work process divided. Work tasks become routine. Industrial Capitalism = vast amounts of capital invested in machinery. i. Capital is the amount of money you have to invest. The Industrialist replaces the Merchant as the dominate factor in capitalism. i. The village or town merchant used to be the top dog of capitalism. ii. The focus shifts to the industrialist in the IR. Industrialist: Factory system of manufacturing. Work process divided. Work tasks become routine.

Todays Teen Entrepreneurs https://www.youtube.com/watch?v=emHZTnbN370 Pick two that you find most interesting and tell me (on your notes) what unique about what they have done.

Laissez-Faire Laissez-faire is a French phrase meaning “let do.” Adam Smith’s Wealth of Nations, written in 1776 spells out the idea of Laissez-Faire Little government involvement in business Few regulations Low taxes and few laws on business. Adam Smith Laissez-faire is a French phrase meaning “let do.” i. An injunction against government interference with trade, it became used as a synonym for strict free market economics during the early and mid-19th century. Adam Smith’s Wealth of Nations. i. An Economist who argued that government should not interfere with business. Little government involvement. i. A doctrine that maintains that private initiative and production are best allowed to roam free. ii. It is in opposition to economic interventionism and taxation by the state. Low taxes and few laws on business. i. Only taxes needed are ones that are necessary to maintain individual liberty, peace, security, and property rights.

Laissez Faire https://www.youtube.com/watch?v=KTzHx6RJTVE 1:35

Socialism Government owns and controls important parts of the economy such as factories and utilizes. Wealth is distributed more equally to everyone. Government responsible for fixing problems.

The top nine CURRENT Socialist Countries: FYI – (don’t write down) Denmark Finland Netherlands Canada Sweden Norway Ireland New Zealand Belgium

Socialism/Communism Socialism Government owns and controls “means of production” (important parts of the economy, like businesses, factories, farms). Government decides how and when goods will be produced Government decides how to distribute resources and wealth Communism is basically socialism with a dictator (who, in theory, would not be needed once all different classes of people became the same).

Communism https://www.youtube.com/watch?v=qElx_EyTTKA

Karl Marx He wrote “The Communist Manifesto” in mid-1800’s He was known as “Father of Communism” Marx criticized the industrial economy He believed that capitalism divided society between the owners and the workers. Wrote “The Communist Manifesto” in 1848 He and Friedrich Engels denounce the industrial economy A workers’ revolution was bound to occur When the revolution came, it would destroy capitalism Material wealth could then be distributed equally among all workers The oppressor were the entrepreneurs or the people who owned the factories and oppressed the working class The oppressed were the factory workers who profited very little from their labor Marx saw the industrial age as a struggle between the bourgeoisie and the proletariat. Karl Marx

Proletariat (the working class) Karl Marx’s Theory Working class people = proletariat According to Marx: Worker does all the work but receives little reward. Workers will revolt one day. Industrialists (people who own factories) will be overthrown. Means of production (factories) will be owned by all the workers Proletariat (the working class)

Karl Marx https://www.youtube.com/watch?v=Y8gT7HN_fyM

Communism/Utopianism Classless society based on common ownership and control of the means of production and property in general The doctrine of the conditions of the liberation of the proletariat Robert Owen created a cooperative style commune. Hippie commune of the 60s People suffered during industrialization. i. Reformers looked for a better way. Socialism NOT capitalism i. Replace competition with cooperation. Government owns and controls important parts of the economy. Government responsible for fixing problems. Robert Owen created a cooperative style commune. i. British cotton manufacturer. ii. It fails and breaks up in 1820. Painting of a early cooperative

Crash Course #33: Capitalism, Socialism, and Communism https://www.youtube.com/watch?v=B3u4EFTwprM

Answer the EQ in five complete sentences Compare and contrast the three forms of government: Capitalism Socialism Communism