Chapter 9-4
Main Idea The Industrial Revolution led to economic, social & political reforms Why It Matters Now Many modern social welfare programs developed during this period of reform Objectives
Laissez faire Adam Smith Capitalism Utilitarianism Socialism Karl Marx Communism Union Strike Key Terms & Names
Laissez faire – economic policy of allowing owners of business & industry to set working conditions without government interference French = “Let do” The Philosophers of Industrialization
Enlightened Idea – government regulations only interfere with wealth Idea: If gov’t would allow free trade – the economy will prosper Adam Smith: professor – U of Glasgow (Scotland) 1776 – The Wealth of Nations - “economic liberty guarantees economic progress” Laissez-faire Economics
1.Law of supply & demand = Enough goods are produced at the lowest possible price to meet demand 2.Law of self-interest = People work for their own good 3.Law of competition = Competition forces people to make a better product Smith’s 3 natural laws of economics
Capitalism – an economic system in which the factors of production are PRIVATELY owned & money is invested back into the business to make a larger profit Helped spread the “industrial revolution” The Economists of Capitalism
Others believe governments should intervene The wealthy should help to improve lives of the poor Utilitarianism: (John Stuart Mill) People should judge ideas, institutions, & actions on the basis of their utility or usefulness Basically – “The greatest good for the greatest number” (not always morally right) The Rise of Socialism
John Stuart Mill Slightly regulated economics will lead to a more EQUAL DIVISION OF PROFITS Do away with great differences in wealth Pushed for reform in education & prisons
The Idea of a perfect society (Don’t write) Robert Owen – British Factory owner Built homes for his workers – rented at low rates Prohibited children under 10 from working Provided free schooling Moved to Indiana to form a Utopian Society Utopian Ideas
In Socialism: the factors of production are owned by the public & operate for the welfare of ALL Government control would end poverty & promote equality: factories mines railroads & other key industries Public ownership would help employees who were at the mercy of their owners Socialism
Karl Marx – German journalist The Communist Manifesto Marx & Friedrich Engels “Societies have always been ÷ into warring classes” “Haves” & “Have-Nots” Industrial Revolution enriched the wealthy & impoverished the poor “Working men unite!” Marxism Radical Socialism
Capitalism will collapse 1.Factories would drive out small businesses & leave a small minority with all the wealth 2.Proletariat would revolt & produce what society needs 3.Workers would bring about economic equality for all people 4.Gov’t controlled by a “dictatorship of the proletariat” Would eventually dissolve as a classless society developed The Future According to Marx
Complete socialism – The means of production - all land, mines, factories, railroads, & businesses would be owned by the people Private property would cease to exist All goods & services would be shared equally Communism
Unions – Voluntary labor associations Unionization: Bargained for better working conditions & pay If refused they would go on strike (refuse to work) skilled workers lead the charge – (not as easily replaced) Britain briefly outlaws unions (troublesome to the economy) Labor Unions & Reform Laws
Parliament began investigating child labor & working conditions READ – pages 304 – 306 Reform Laws