1. Chapter 9-4

2.  Main Idea The Industrial Revolution led to economic, social & political reforms Why It Matters Now Many modern social welfare programs developed during this period of reform Objectives

3.   Laissez faire  Adam Smith  Capitalism  Utilitarianism  Socialism  Karl Marx  Communism  Union  Strike Key Terms & Names

4.   Laissez faire – economic policy of allowing owners of business & industry to set working conditions without government interference  French = “Let do” The Philosophers of Industrialization

5.   Enlightened Idea – government regulations only interfere with wealth  Idea: If gov’t would allow free trade – the economy will prosper  Adam Smith: professor – U of Glasgow (Scotland)  1776 – The Wealth of Nations  - “economic liberty guarantees economic progress” Laissez-faire Economics

6.  1.Law of supply & demand =  Enough goods are produced at the lowest possible price to meet demand 2.Law of self-interest =  People work for their own good 3.Law of competition =  Competition forces people to make a better product Smith’s 3 natural laws of economics

7.   Capitalism – an economic system in which the factors of production are PRIVATELY owned & money is invested back into the business to make a larger profit  Helped spread the “industrial revolution” The Economists of Capitalism

8.   Others believe governments should intervene  The wealthy should help to improve lives of the poor  Utilitarianism: (John Stuart Mill)  People should judge ideas, institutions, & actions on the basis of their utility or usefulness  Basically – “The greatest good for the greatest number” (not always morally right) The Rise of Socialism

9.  John Stuart Mill  Slightly regulated economics will lead to a more EQUAL DIVISION OF PROFITS  Do away with great differences in wealth  Pushed for reform in education & prisons

10.   The Idea of a perfect society (Don’t write)  Robert Owen – British Factory owner  Built homes for his workers – rented at low rates  Prohibited children under 10 from working  Provided free schooling  Moved to Indiana to form a Utopian Society Utopian Ideas

11.   In Socialism: the factors of production are owned by the public & operate for the welfare of ALL  Government control would end poverty & promote equality:  factories  mines  railroads  & other key industries  Public ownership would help employees who were at the mercy of their owners Socialism

12.   Karl Marx – German journalist  The Communist Manifesto  Marx & Friedrich Engels  “Societies have always been ÷ into warring classes”  “Haves” & “Have-Nots”  Industrial Revolution enriched the wealthy & impoverished the poor  “Working men unite!” Marxism Radical Socialism

13.   Capitalism will collapse 1.Factories would drive out small businesses & leave a small minority with all the wealth 2.Proletariat would revolt & produce what society needs 3.Workers would bring about economic equality for all people 4.Gov’t controlled by a “dictatorship of the proletariat”  Would eventually dissolve as a classless society developed The Future According to Marx

14.   Complete socialism –  The means of production - all land, mines, factories, railroads, & businesses would be owned by the people  Private property would cease to exist  All goods & services would be shared equally Communism

15.   Unions – Voluntary labor associations  Unionization:  Bargained for better working conditions & pay  If refused they would go on strike (refuse to work)  skilled workers lead the charge – (not as easily replaced)  Britain briefly outlaws unions (troublesome to the economy) Labor Unions & Reform Laws

16.   Parliament began investigating child labor & working conditions  READ – pages 304 – 306 Reform Laws