Solutions to the Problems of Industrialization Capitalism vs. Socialism

Capitalism – What is it? Basic meaning: An economic system where there is freedom for the private individual Basic meaning: An economic system where there is freedom for the private individual Under Capitalism, economic exchanges are essentially a private matter between persons pursuing profits. Under Capitalism, economic exchanges are essentially a private matter between persons pursuing profits. Philosophy – the best way to promote the good of society as a whole is to let people pursue their private interests. Philosophy – the best way to promote the good of society as a whole is to let people pursue their private interests. Government is Laissez Faire Government is Laissez Faire Hands off Hands off No involvement No involvement No regulation No regulation

The Roots of Capitalism Began as Mercantilism Began as Mercantilism Capitalism grew to be the predominate economic system in the Western World Capitalism grew to be the predominate economic system in the Western World Religions at the time did not like the emphasis on private gain, the 1700s emphasized the idea that people ought to be free to pursue their private interests, including economic interests. Religions at the time did not like the emphasis on private gain, the 1700s emphasized the idea that people ought to be free to pursue their private interests, including economic interests. Adam Smith's The Wealth of Nations (1776) - recommended leaving economic decisions to the free play of self-regulating market forces. Adam Smith's The Wealth of Nations (1776) - recommended leaving economic decisions to the free play of self-regulating market forces. AKA No Government Involvement AKA No Government Involvement

Capitalism - Pros Minimal government intrusion into the public arena. Minimal government intrusion into the public arena. People are more mobile in the social hierarchy, equal opportunity People are more mobile in the social hierarchy, equal opportunity Rewards merit, ability and achievement, regardless of birth station Rewards merit, ability and achievement, regardless of birth station Freedom to experiment, invent and produce Freedom to experiment, invent and produce Wealth has an unlimited growth potential Wealth has an unlimited growth potential Very Efficient Very Efficient

Capitalism - Cons Corruption, cold-heartedness, callous, exploitative, dehumanizing, alienating, and ultimately enslaving. Corruption, cold-heartedness, callous, exploitative, dehumanizing, alienating, and ultimately enslaving. Creates Class Divisions Creates Class Divisions Economic Inequalities Economic Inequalities Unequal life-chances Unequal life-chances Creates alienation of people from their work and other people Creates alienation of people from their work and other people

Socialism – What is it? Definition: An economic or political system that features gov. control of business and property and equal distribution of wealth. Definition: An economic or political system that features gov. control of business and property and equal distribution of wealth. Theory: Private property is the source of the class divisions that place some people in positions of power and privilege, while condemning others to poverty and powerlessness. Theory: Private property is the source of the class divisions that place some people in positions of power and privilege, while condemning others to poverty and powerlessness. BUT Socialist feel that Everything people produce, is in some sense a social product, and everyone who participates in producing a good is entitled to share in it. BUT Socialist feel that Everything people produce, is in some sense a social product, and everyone who participates in producing a good is entitled to share in it. SO IN SOCIALISM Society as a whole, not the private individual, should own and control property for the benefit of all. Society as a whole, not the private individual, should own and control property for the benefit of all.

The Roots of Socialism Karl Marx In an industrial capitalist society there were 2 classes: In an industrial capitalist society there were 2 classes: the Bourgeoisie and the Wage Laborers (Proletariat) the Bourgeoisie and the Wage Laborers (Proletariat) Marx felt capitalism was a progressive good but that Capitalism has outlived itself. Need a new type of society to continue the progression to human betterment Marx felt capitalism was a progressive good but that Capitalism has outlived itself. Need a new type of society to continue the progression to human betterment ie. a classless society. ie. a classless society. true freedom (which is freedom from exploitation and alienation, the freedom to develop one’s human powers to their fullest) can flourish only in a classless society. true freedom (which is freedom from exploitation and alienation, the freedom to develop one’s human powers to their fullest) can flourish only in a classless society. Basically, the Proletariat, needs to start a revolution to overthrow capitalism and create a classless socialist/communist society. Basically, the Proletariat, needs to start a revolution to overthrow capitalism and create a classless socialist/communist society.

Socialism - Pros Small gap between wealthy and poor Small gap between wealthy and poor Equality Equality Workers have more ownership Workers have more ownership No competition = kinder to each other No competition = kinder to each other

Socialism - Cons Less motivation to work hard – rewards laziness Less motivation to work hard – rewards laziness Less Efficiency Less Efficiency Money taken from those who have earned it through hard work Money taken from those who have earned it through hard work No motivation to invent No motivation to invent