Reforming the Industrial World Chapter 25 Section 4
Philosophies of Industrialization Laissez Faire (lehs-ay-FAIR) Economic policy of letting owners of industry to set working conditions without interference of government. Term is French for “let do” Leave business alone! From the Enlightenment: Government put’s burden on business and interferes with businesses’ profits
Adam Smith Wrote “The Wealth of Nations” (1776) Defended a Free Economy Liberty guaranteed economic ($) progress Created 3 Natural Laws of Economics Law of Self-Interest Law of Competition Law of Supply and Demand
Adam Smith Adam Smith – Father of Capitalism Capitalism Economic system in which the factors of production are privately owned and money is invested in business ventures to make a profit ($) Think of it as an “INVISIBLE HAND GUIDING THE MARKET (ECONOMY)”
Cow Metaphor - Capitalism You have two cows. You sell one and buy a bull.
Socialism Founder Definition Goal Charles Fourier Saint-Simon Factors of production are owned by the government Goal End poverty and promote equality Plan your community vs. Freedom of choice
Cow Metaphor - Socialism You have two cows. You keep one and give one to your neighbor.
Marxism Founders: Theory: Karl Marx & Frederick Engles Wrote theory in the book “Communist Manifesto” Theory: Have’s – Bourgeoisies (Oppressor) Have Not’s - Proletariats (Oppressed) Proletariats will always overthrow the Bourgeoisies and then they become the new bourgeoisies.
Communism Final Phase of Marxism – Communism Definition All factors of production are owned by ALL. Never seen a “pure” form of communism Ruled by dictators that run their economy for their own profit. Countries that are communist today: China, Cuba, North Korea, Vietnam
Cow Metaphor - Communism You have two cows. The government takes them both and provides you with milk.
Utilitarianism Founder: Definition: Goal: Jeremy Bentham Judge ideas, institutions, & actions based on utility or usefulness Goal: Work for policies that lead to more equal division of profits ($)