1. Events and Ideas #3 Government Ideology and Economics of the Industrial Era
World History
Unit 3

2. Essential Question:
Compare and contrast the three forms of government:
Capitalism
Socialism
Communism

3. Why was England a good place to start a business?
It was a free society
It did not have many government rules and regulations that restricted what types of businesses could be started
Taxes were not high on new businesses
England had a history of producing goods for sale and trade

4. Why was Capital Needed?
It costs money to build new factories and to install new machines.
CAPITAL= money available for investment.
ENTREPRENEUR= person (with capital) who is willing to risk their money to start a business
England had people with capital (many had earned it through trade with the Americas).
Industrial Capitalism = vast amounts of capital invested in machinery.
i. Capital is the amount of money you have to invest.
The Industrialist replaces the Merchant as the dominate actor in capitalism.
i. The village or town merchant used to be the top dog of capitalism.
ii. The focus shifts to the industrialist in the IR.
Industrialist:
Factory system of manufacturing.
Work process divided.
Work tasks become routine.

5. Capitalism
An economic/social system in which the means of production are privately controlled.
Labor, goods and capital are traded in a market system
Profits are distributed to owners or invested in new technologies and industries
Wages are paid for labor.

6. Capital Entrepreneurs
Industrial Capitalism = vast amounts of money invested in machinery.
The Industrialist replaces the Merchant as the dominate factor in capitalism.
Industrialist:
Factory system of manufacturing.
Work process divided.
Work tasks become routine.
Industrial Capitalism = vast amounts of capital invested in machinery.
i. Capital is the amount of money you have to invest.
The Industrialist replaces the Merchant as the dominate factor in capitalism.
i. The village or town merchant used to be the top dog of capitalism.
ii. The focus shifts to the industrialist in the IR.
Industrialist:
Factory system of manufacturing.
Work process divided.
Work tasks become routine.

7. Todays Teen Entrepreneurs
Pick two that you find most interesting and tell me (on your notes) what unique about what they have done.

8. Laissez-Faire Laissez-faire is a French phrase meaning “let do.”
Adam Smith’s Wealth of Nations, written in spells out the idea of Laissez-Faire
Little government involvement in business
Few regulations
Low taxes and few laws on business.
Adam Smith
Laissez-faire is a French phrase meaning “let do.”
i. An injunction against government interference with trade, it became used as a synonym for strict free market economics during the early and mid-19th century.
Adam Smith’s Wealth of Nations.
i. An Economist who argued that government should not interfere with business.
Little government involvement.
i. A doctrine that maintains that private initiative and production are best allowed to roam free.
ii. It is in opposition to economic interventionism and taxation by the state.
Low taxes and few laws on business.
i. Only taxes needed are ones that are necessary to maintain individual liberty, peace, security, and property rights.

9. Laissez Faire
1:35

10. Socialism
Government owns and controls important parts of the economy such as factories and utilizes.
Wealth is distributed more equally to everyone.
Government responsible for fixing problems.

11. The top nine CURRENT Socialist Countries: FYI – (don’t write down)
Denmark
Finland
Netherlands
Canada
Sweden
Norway
Ireland
New Zealand
Belgium

12. Socialism/Communism Socialism
Government owns and controls “means of production” (important parts of the economy, like businesses, factories, farms).
Government decides how and when goods will be produced
Government decides how to distribute resources and wealth
Communism is basically socialism with a dictator (who, in theory, would not be needed once all different classes of people became the same).

13. Communism

14. Karl Marx He wrote “The Communist Manifesto” in mid-1800’s
He was known as “Father of Communism”
Marx criticized the industrial economy
He believed that capitalism divided society between the owners and the workers.
Wrote “The Communist Manifesto” in 1848
He and Friedrich Engels denounce the industrial economy
A workers’ revolution was bound to occur
When the revolution came, it would destroy capitalism
Material wealth could then be distributed equally among all workers
The oppressor were the entrepreneurs or the people who owned the factories and oppressed the working class
The oppressed were the factory workers who profited very little from their labor
Marx saw the industrial age as a struggle between the bourgeoisie and the proletariat.
Karl Marx

15. Proletariat (the working class)
Karl Marx’s Theory
Working class people = proletariat
According to Marx:
Worker does all the work but receives little reward.
Workers will revolt one day.
Industrialists (people who own factories) will be overthrown.
Means of production (factories) will be owned by all the workers
Proletariat (the working class)

17. Karl Marx

18. Communism/Utopianism
Classless society based on common ownership and control of the means of production and property in general
The doctrine of the conditions of the liberation of the proletariat
Robert Owen created a cooperative style commune.
Hippie commune of the 60s
People suffered during industrialization.
i. Reformers looked for a better way.
Socialism NOT capitalism
i. Replace competition with cooperation.
Government owns and controls important parts of the economy.
Government responsible for fixing problems.
Robert Owen created a cooperative style commune.
i. British cotton manufacturer.
ii. It fails and breaks up in 1820.
Painting of a early cooperative

19. Crash Course #33: Capitalism, Socialism, and Communism

20. Answer the EQ in five complete sentences
Compare and contrast the three forms of government:
Capitalism
Socialism
Communism