Capitalism and Laissez-Faire Use this lecture to help complete the “Laissez Faire Capitalism Picture Assignment” on Mrs. Weber’s website. The grading requirements are on the last page of this slide show.

Capitalism Terms Capital The money invested in a business to pay for the means of production (the factory, raw materials, transportation, labor…) Entrepreneurs People who take a financial risk in the hope of making a profit by starting a business. The Labor (labor force, laborers) The workers Consumers People who purchase items/buyers Profit $ earned in a business after capital expenses are paid

Capitalism/Free Market System An economic system based on private ownership of businesses. (as opposed to public or government ownership of businesses) Based on the principle of supply and demand: Private entrepreneurs take risks investing in businesses to produce (supply) what they think consumers want to purchase (demand). Called “free market” system, because businesses freely compete to attract consumers to buy their product.

Laissez Faire Capitalism Laissez faire, French for, “let it happen” No government regulation (laws) that restrict businesses or economy No laws (like minimum wage restrictions, safety standards in factories) that regulate business. Belief that such laws hurt profits for businesses, make it harder for new businesses to develop, and increased prices on consumer goods.

But what about the poor workers? With no labor laws, factory regulations won’t they be taken advantage of? Laissez faire supporters said no. Supporters of laissez-faire said workers benefit with: access to jobs Workers can buy the cheap products produced. Trickle Down effect or “Gospel of Wealth” Wealthy capitalists will eventually earn so much $ that they will donate money to charities and help the poor. (philanthropy)

Why does Laissez faire dominate? Aren’t more people in Britain factory workers? In 1800 only 6% of British population can vote due to property restrictions, only aristocracy and wealthy capitalists can vote Reform of % can vote (factory owners and upper middle class) Reform 1867 all males, property restrictions for voting gone Laissez faire begins to fade

Laissez Faire cont. The government’s only duties in an economic system were to: Stop workers from controlling prices (outlaw strikes and unions) Stop entrepreneurs from controlling prices (outlaw monopolies) Let free competition and the interaction between buyers and sellers set prices.

Laissez Faire Capitalism Picture Requirements Each picture box must include at least 5 accurate and relevant details The bold words related to the box must be labeled in the picture to show how they were included The details included should clearly represent the entire concept. All parts of the prompt are addressed. There should be no confusion for the viewer about how the details included reflect the concept. Visuals should be neat and comprehendible to viewer Each picture will be scored according to –Meets Standard (all required elements met) = 7 points –Approaching Standard (most required elements met) = 5 pts –Below Standard (few required elements met)= 2 pts –Missing = (no required elements met)=0