 Adam Smith: considered founder of laissez-faire economics  Author The Wealth of Nations  Laissez-Faire Capitalism: belief that business should operate with little/no government interference  “The Invisible Hand”  Smith believed two laws govern economics: 1. Supply and Demand 2. Competition

 Thomas Malthus: Believed that population growth causes problems and poverty becomes unavoidable, endless cycle  David Ricardo: Believed that supply & demand determine wages, “Iron Law of Wages”

 Utilitarianism: Belief that goal of society should be to provide greatest good for greatest number of people  John Stuart Mill: actions were right if they promote happiness and wrong if they cause pain  Government’s role to “Prevent harm to others”

 Socialism: political & economic system in which governments own the means of production and operate them for the benefit of all the people Two Types: 1. Utopian Socialists: idea that people can live with each other in cooperative settlements owning all means of production and sharing all Ex. Robert Owen

2. Communism: economic & political system in which governments own the means of production and control all economic planning A. Karl Marx: German philosopher, along with Friedrich Engels wrote The Communist Manifesto

 Struggle between “haves” and “have-nots”  “Haves” were the bourgeoisie (Owners)  “Have-nots” were the proletariat (Working Class)  Eventually proletariat would take control of means of production  Set up classless society