1. Bell Ringer Why did people have to move from rural areas to urban areas? Which industry was the first to be transformed by the Industrial Revolution? (hint – Eli Whitney & James Hargreaves had a lot to do w/this) _______________ ________________ is when management and workers meet together to discuss working conditions

2. progress opened a In industrialized countries in the 1800’s, many believed that progress opened a gap between rich and poor. The rich were getting richer and the poor were getting poorer. Business leaders felt governments should stay out of business and economic affairs. Reformers felt that governments should play an active role in bettering the condition for the poor.

3. Capitalism Economics began with Adam Smith’s book Wealth of Nations (1776) Smith opposed mercantilism (idea that colonies exist for the economic good of the mother country).

4. An economic and social system based on private ownership of capital and profit motivation. Capital is the money, property, and other valuables that together represent the wealth of individual or business.

5. Principles of Capitalism Profit motivates people to work hard and businesses to compete. Government should “leave things alone” (laissez faire). Private ownership of capital is good, since you will work harder for your own rewards. Value is based on what buyers will pay.

6. Policy of letting owners of industry and business set working conditions without government interference (regulation).

7. Objections to Capitalism Some (perhaps many) people are poor People are too greedy Owners exploit workers (take advantage of them)

8. What is Socialism? A new kind of economic system, where the public owns the factors of production (factories & farms) and operates them for the benefit of all. Working Class revolution gets rid of the ruling class

9. Socialism A social/economic system in which property is controlled by the community and wealth is distributed evenly.

10. MARXISM Karl Marx and Friedrich Engels responded to the injustices of capitalism Their ideas are the basis of socialism and communism

11. Communist Manifesto Together they wrote: Communist Manifesto (1848) Das Kapital “Workers of the world, unite. You have nothing to lose but your chains!”

12. What is Communism? A economic and political system, in which workers produce what society needs and share in the profits Economic equality for all people Classless society “From each according to his abilities, to each according to his needs”

13. What is Communism? Complete socialism - all lands, mines, factories, railroads, businesses are owned by the people. No private property. All goods and services shared equally. Complete socialism - all lands, mines, factories, railroads, businesses are owned by the people. No private property. All goods and services shared equally.

14. Objections to Socialism/Communism No reason to work harder Individual achievement does not matter Becomes inefficient, government-run, command & control economy

15. Marxism vs. Capitalism: How can we determine which is better? Traits of most capitalist nations: Fair & open elections Free speech Free press Freedom of association Freedom of assembly Freedom of religion Fair public trials

16. Marxism vs. Capitalism: How can we determine which is better? Traits of Marxist nations:  Police states without human rights  Low standards of living  Soviet Union: 20M to 30M dead from famines, executions & gulag  China: 50M to 70M dead from famines & repression  Cambodia: 1.4M to 2.2M out of population of 7M were killed

17. Marxism vs. Capitalism: How can we determine which is better? Which way do people want to migrate?

18. Marxism vs. Capitalism: How can we determine which is better? Experiment with 2 similar countries? One with a communist command & control economy Another with capitalist free enterprise Impossible to do… right? Consider North & South Korea

19. Consider North & South Korea… One country Divided after WWII North is communist dictatorship with command & control economy South is democracy with free enterprise economy

23. REFLECTION… What did EACH PART of the coin activity represent? Why? Which economic system do you think poorer people like the best? Why? Which economic system do you think richer people like the best? Why?

24. Economics in Pictures Take what you have learned about the new economic ideas of the Industrial Revolution and create a visual representation. You may draw a political cartoon, an advertisement, or any other visual to endorse one of the economic ideas or to criticize one. Use a separate piece of paper & put your name on the back Use color & be creative 20 Points & due next block!