1. Sophomore World History Chapter 20 Section 4
New Ways of Thinking

2. Laissez-Faire Economics
*During the Enlightenment, physiocrats believed that natural laws should be allowed to be implemented without any interference from government.
*What are physiocrats?
*Early 1800’s: Middle class business leaders believed in a laissez-faire, AKA “hands off”, approach to government and economics.

3. Adam Smith
*Believed in a free market economy-unregulated exchange of goods and services.
*He felt that this would benefit all classes, not just the rich-more goods at a lower price
*A growing economy would encourage new and improved industries

4. Thomas Malthus
*Spent most of his time thinking about population and what affects it-war, disease, and famine
*Believed that as long as population was growing, the poor would suffer.
*He advised families to have fewer children
*This was accepted by most, but the population boom continued and the food supply increased with it, some times even with abundance.
*Living conditions also improved throughout the century

5. David Ricardo *Agreed with Malthus, the poor had too many children.
*His theory was called the “iron law of wages”-When wages were high families had more children.
*What will this cause in the future?
*Like Malthus, he had no hope for the working class to break away from poverty-economics became known as the “dismal science”

6. *These men believed strongly in laissez-faire.
*They felt that the best treatment for poverty was not government assistance, but free market.
*Each individual was responsible for themselves, and they could escape poverty through thrift, hard work and limiting their family size.

7. Utilitarians
*Some great thinkers modified the laissez-faire beliefs to include some government intervention in the economy.
*One man to do this was Jeremy Bentham

8. Jeremy Bentham
*Preached utilitarianism-the goal of society should be “the greatest happiness for the greatest number of citizens”
*Believed that actions should be judged by their “utility”-Do they give you more happiness than pain?
*Supported individual freedoms, which created happiness, but also realized that some government interaction is needed under certain circumstances.

9. John Stuart Mill *He was Bentham's main follower.
*Believed that the laissez-faire approach favored the strong and put down the weak.
*He felt that the government was needed to improve the lives of the working class.

10. The Emergences of Socialism
*Laissez-faire supporters favored the individual, but another group looked beyond that at the bigger picture, the good of society in general.
To end poverty and injustice, this group had a new solution, socialism-People as a whole, not an individual, would own and operate the “means of production”

11. *The goal of socialists was a society that operated for the welfare of all the people.
*One reformer predicted that in a socialists society, “There will be no war, no crime, no administration of justice, as it is called, no government. Besides there will be no disease, anguish, nor resentment. Every man will seek…the good of all.”

12. The Utopians
*These early socialists attempted to build a community were all work was shared and all the property was owned by all.
*Therefore, no social classes existed and no fighting would occur.
*Robert Owen was a leading Utopian.

13. Robert Owen
*Became a successful mill owner and was against child labor and in favor of labor unions.
*Believed that the conditions in which people lived and worked shaped the character
*Set up a model village and mill in New Lanark, Scotland. Homes were provided for the workers and the children attended school daily
*This proved that an employer could offer decent living conditions and still make a profit.

14. The “Scientific Socialism” of Karl Marx
*He was against Utopians, felt they held unrealistic ideas.
*Created a new theory," scientific socialism” -Based on the scientific study of history
*Marx was from Germany, but was forced to leave due to his radical ideas and ended up in London. There he published The Communist Manifesto.

15. *This starts out by saying, “A spectre is haunting Europe, the spectre of communism.”
*Communism is a from of socialism that sees class struggle between employers and employees as inevitable.

16. Marxism *He believed that economics was the driving force in history.
*Everything come down to the class struggle between the “haves” and the “have-nots”
*The “haves”, bourgeoisie (middle class) owned the means of production and therefore controlled society, and the “have-nots” made up the proletariat, or working class.

17. *He believed that the proletariats would take over the bourgeoisie and implement a communist society.
*Marx called for the proletariats of the world to come together to bring down the bourgeoisie with this quote, “Working men of all countries, unite!”

18. Weaknesses of Marxism
*Marx believed that the proletariats would rise up, but they did not. Why?
Also, Marx believed his ideas would cross borders and oceans, but nationalism proved to be too strong.