1. New Ideas in a New Society

2. New Ideas in a New Society
Main Idea
The Industrial Revolution inspired new ideas about economics and affected society in many ways.
Reading Focus
What new ideas about economics developed during the Industrial Revolution?
What competing economic ideas arose as a result?
How did the Industrial Revolution affect society?

3. Key Terms and Names Laissez-faire Adam Smith Thomas Malthus
Entrepreneur
Andrew Carnegie
Socialism
Karl Marx
Communism
Standard of living

4. New Ideas about Economics
Old mercantile system restricted trade
Laissez-faire economics
Adam Smith, market economy
Thomas Malthus, poverty unavoidable
Industrialization succeeded and spread
Capitalism and Competition
Shift in wealth and power
Entrepreneur
Banking and finance
Andrew Carnegie, rags to riches
Robber barons
New Roles for Business Leaders

5. New Ideas about Economics
Adam Smith
The Wealth of Nations
Analyzed the definition and creation of wealth.
“Economic systems free from government interference benefit all.”
Laissez-faire economics
From French word meaning “free to do”.
Government should not interfere in business

7. Capitalism and Competition
Thomas Malthus
Concerned with population growth caused by industry development.
Believed population would grow faster than food production.
Poverty and misery would never go away.

8. New Roles for Business Leaders
Entrepreneur
Someone who starts a new business.
Included were financiers, bankers, and investors who pooled their money to create large corporations.
U.S. industrialists built some of the largest corporations in the world
Andrew Carnegie
Born in Scotland and immigrated to the U.S. and grew up extremely poor.
Went to work at age 12 in a mill
Led the Steel Industry
Became “Richest Man in the World”
Donated 90% of his fortune to charity.

10. Industrialists
Cornelius Vanderbilt
John D. Rockefeller
Andrew Carnegie
JP Morgan
George Pullman

11. What were some of the new ideas about economics?
Summarize
What were some of the new ideas about economics?
Answer(s): mercantilism gave way to capitalism and competition, laissez-faire economics and The Wealth of Nations allowed for increased role of entrepreneur

12. Competing Economic Views
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

13. Robert Owen Karl Marx

14. Why did capitalism provoke strong response from the socialists?
Infer
Why did capitalism provoke strong response from the socialists?
Answer(s): Socialists blamed capitalism for harsh working conditions, polluted cities, and the big gaps between rich and poor.

15. Effects on Society Home Life Countries Societies
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.
Worlds of work and home separated
“Separate spheres”
Business world-without moral controls
Women-moral guidance at home
Home Life
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

18. Identify Cause and Effect
What were some of the major effects industrialization had on families and countries?
Answer(s): families—wealth, leisure time, better educated; countries—increased power, wealth, and living standards; overcrowding of cities, pollution, rapid population growth

20. Video The Impact of Industrialization
Click above to play the video.