Problems of Industrial Revolution: long hours for low pay dangerous, unsanitary working conditions harsh or severe factory discipline exploitation of child labor lack of adequate housing and unsanitary living conditions disease and frequent epidemics class tensions

Age of Reform…even more effects of the Ind. Rev. With all of the short term effects of the Ind. Rev. (both good and bad) there was a series of long term effects that we still deal with today…actually, you can make the argument that these long term effects have caused EVERY MAJOR WAR since the Ind. Rev. (including 9/11)… Imperialism World War I Great Depression 1930’s World War II Technology Age- Nuclear Weapons

Solutions: Laws passed to protect children and women workers Maximum work hours and working standards established Settlement house movement worked to improve living conditions Workers won the right to collective bargain and to strike Public education and prison reforms passed

Reform…to make changes Thought question...why would people want to make changes after the Industrial Revolution?  Even though in Ind. Rev. modernized Britain, debate arose btw gov’t leaders to stay out of the way of business, while others should play a role in the economy

Political/Economic Spectrum Left Right Regulated Unregulated

Age of Reform Industrialization caused nations and their people to make a lot of money. But how were nations going to handle all of this new found wealth? The answers were found in new political ideas such as… Capitalism Socialism Communism Utilitarianism

Capitalism How would you define “capitalism”? What other words come to mind when you think of the word “capitalism”? Are these associations positive or negative?

Capitalism An economic system in which the means of production are owned mostly privately. Capital is invested in the production of goods for profit in a competitive free market. Etymology Latin, caput, “head” The term “capitalism” was first used in English in 1854 Marxist writers originally popularized the term

“Free Market System” Free = ability for employers to run the business the way they want Free = to set prices of product Free = to set wages for workers Free = for employees to work for a company of their choice Free = for employees to leave for another company

Adam Smith A Scottish political economist and moral philosopher (1723-1790). His Inquiry into the Nature and Causes of the Wealth of Nations (1776) founded the modern discipline of economics and provided the rationale for free trade, capitalism and libertarianism.

Capitalism Also known as Laissez-Faire Economics- letting owners of industry and business set working conditions without gov’t interference Adam Smith- wrote “Wealth of Nations” Economic liberty = economic progress Smith attacked most forms of government interference in the economic process, including tariffs on imported goods. Government restrictions on trade cause inefficiency and high prices. “Laissez-faire” means “let them do”

Capitalism Definition of Capitalism- economic system in which money is invested in business with the goal of making profit Capitalism helped bring along Ind. Rev. America uses capitalism

Capitalism Thomas Malthus – argued that population grew faster then food production, so war and death were necessary to eliminate the extra people Hence “survival of the fittest”

Ricardo and the “Iron Law of Wages” David Ricardo- argued that a permanent underclass will always be poor Needed the poor class to insure that wages would remain high As population increased, so did the labor supply This in turn increased competition for jobs and kept wages low

Physiocracy Smith criticized physiocracy, which taught that wealth originated in land Smith argued that labor was the major source of wealth and that the division of labor was the key to economic growth Upper, Middle, Lower Classes As productivity rises, wages will rise.

The Invisible Hand The free market appears chaotic and unrestrained. Actually, it is guided by “an invisible hand” to produce the right amount and variety of goods. If a product shortage occurs, the price rises, establishing a profit margin that provides an incentive for others to enter production.

Self-Interest It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.

National Wealth As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual value of society as great as he can.

Communism How would you define “communism”? What other words come to mind when you think of the word “communism”? Are these associations positive or negative?

Communism “The history of all hitherto existing society is the history of class struggles.” An ideology that seeks to establish a future classless, stateless social organization, based upon common ownership of the means of production and the absence of private property Karl Marx (1818-1883) was an immensely influential German philosopher, political economist, and socialist revolutionary He is most famous for his analysis of history in terms of class struggles

Communism Karl Marx – German who introduced a radical form of Socialism called Marxism Teamed up with Friedrich Engals Wrote Communist Manifesto

Communism (cont.) Communist Manifesto – human societies have always been divided into classes Believed in revolution The Bougeoisie (haves/employers/middle/upper class) would be overthrown by the Proletariat (have nots/employees/lower class)

“Communist Manifesto” “The proletarians have nothing to lose but their chains. They have a world to win. Workingmen of all countries, unite!”

Communism (cont.) Marx believed that the capitalist system established by the Ind. Rev. would be destroyed when the poor overtook the wealthy Communism – more complete socialism in which the factors of production are owned by the people, controlled by the gov’t. no private property, all goods and services are shared equally

Communism . Bolshevism Atheism Marx’s ideas were adopted by French revolutionaries who founded the Paris Commune in 1871, the Russian Bolsheviks who overthrew the government in the 1917 October Revolution and the Chinese Communist Party which came to power in 1949 Marx was an atheist He believed that religion was “the opiate of the people.” The owners of capital used religion to keep the peasants and workers subjugated by leading them to think, not of their present misery, of future happiness in heaven

Communism Communist Paradise Determinism Marx taught that paradise would appear on earth, following the destruction of capitalism and the state. Under capitalism, labor is alienated In a communist society, human beings freely develop their nature in cooperative production Under communism, there is no government and, accordingly, perfect freedom Marx traced the history of the various modes of production and predicted the collapse of the present one— industrial capitalism—and its replacement by communism, just as capitalism had replaced feudalism The appearance of communism would represent the end of history

The End Justifies the Means Class Struggle Marx’s moral teaching was that the leaders of the Communist Party, which he termed “the vanguard of the proletariat,” were free to commit any crime as long as it served the end—the destruction of capitalism and the ushering in of communism This historical process, he said, was inevitable Those who must sell their labor power are “proletarians” The person who buys the labor power someone who owns the land and technology to produce, is a “capitalist” or “bourgeoisie” The proletarians inevitably outnumber the capitalists.

Profit Profit is “theft.” It is the difference between the value of a good produced by a worker and the wages paid to the worker by the owner Due to competition among workers for employment, wages will decline, leading to poverty, misery and rebellion Revolution: The state is “a committee of the bourgeoisie” and laws support the capitalists, the ruling class Class conflict between the proletariat and the capitalists can only be resolved by violent revolution A dictatorship of the working class is a temporary necessity before communism is possible Justice: The principle of distribution in communism, is “From each according to ability, to each according to need”

Competing Economic Not everyone agreed that laissez-faire capitalism was good. Two who took a different stance were Robert Owen and Karl Marx. More hopeful than Malthus Socialism Society owns property Society controls business Model industrial town New Harmony Social democracy Robert Owen More radical socialism Predicted collapse of capitalism Das Kapital Communism Government owns means of production controls economic planning Karl Marx

Socialism Other people thought that the government should be involved in economic affairs Gov’t should try to improve its peoples lives

Socialism Socialists wanted to create a Utopia or idea society Everyone would share equally in societies abundance First to establish a utopia was Robert Owen Believed that competition caused societal problems

Socialism (cont.) Jeremy Bentham- people should judge ideas, people and situations based on their usefulness Utilitarianism- gov’t should try to promote the greatest good for the greatest # of people

Socialism (cont.) French Reformer Henri St.-Simon wanted to offset the effects of industrialization Socialism – factors of production are owned by the public and operate for the welfare of all People started communities based on Utilitarian and Socialist ideas (didn’t last…but…) John Stuart Mill – believed it was wrong that workers should lead deprived lives Favored cooperative system of agriculture and women's rights Gov’t to diminish debt and have a classless economy

Socialism (cont.) Socialists believed that the gov’t should plan the economy rather then relying on a free market Gov’t should control factories, mines, RR’s

Capitalism vs. Communism Capitalism-progress results when individuals follow their own self interest Communism- all great movements in history are the result of an economic struggle

Capitalism vs. Communism Capitalism- Businesses follow their own self- interest when they compete with one another for consumer’s money

Capitalism vs. Communism Communism- the “haves” take advantage of the “have-nots”

Capitalism vs. Communism Capitalism- each producer tries to provide goods and services that are better and less expensive than those of competitors Consumer benefits!

Capitalism vs. Communism Capitalism- Workers are exploited by employers Labor of workers creates profit for employers

Effects on Society The rise of new economic ideas was among the countless effects of the Industrial Revolution. The shift away from cottage industries also affected home life and the roles of women in society. Industry-great power Control of other nations’ economies Industrialization of United States Period of immigration to United States Countries Increase in wealth Standard of living improved Leisure time Changes to many aspects of life: Art Politics Transportation Societies Worlds of work and home separated “Separate spheres” Business world-without moral controls Women-moral guidance at home Home Life

Smurfs and Communism the Smurfs shared everything The food in the Smurf village was stored away in those mushrooms the minute it was harvested and then equally distributed to all the Smurfs throughout the year

Smurfs and Communism There was Handy Smurf, and Painter Smurf, and Brainy Smurf, etc... Each Smurf had his own specific job and was not allowed to try his hand at any other Smurf's assigned task Each Smurf worked for the common good

Smurfs and Communism Karl Marx = Papa Smurf (beards!)

Smurfs and Communism Gargamel wanted the Smurfs for was for his own profit, he was a capitalist!!! Gargamel was completely indifferent to the ethical consequences of his actions, which would result in the destruction of the unity of the Smurf social order. Gargamel was greedy and egocentric, creating a dramatic juxtaposition to the Smurfs, who were concerned with the welfare of all their brethren.

Compare & Contrast Capitalism Communism

New Alternatives to Improve and Industrialized Society Alternative 1: Capitalists Alternative 2: Marxists/Socialists Alternative 3: Social Reformers Progress occurs when people follow their own self interest History is a result of class struggles The excesses of capitalism must be controlled and regulated There will always be a permanent underclass Labor produces profits for employer Workers have the right to bargain with employers for better working conditions, higher pay, and the right to strike Governments should NOT interfere with the economy The means of production should be publically owned and operate for the benefits of all Legislation should protect special classes of workers from unsafe conditions. A planned economy would eliminate poverty, promote equality, and help protect workers