1. R EFORMING THE I NDUSTRIAL W ORLD Section 4 Ch. 25

2. C APITALISM Laissez faire refers to the economic policy of letting owners of industry and business set working conditions without interference Adam Smith wrote in his book The Wealth of Nations that economic liberty guaranteed economic progress Smith’s three laws of economics were the law of self-interest the law of competition the law of supply and demand

3. C APITALISM Smith’s ideas supported capitalism- the economic system in which the factors of production are privately owned and money is invested in business ventures to make profit Smith and other laissez-faire thinkers opposed government efforts to help poor workers They believed that a minimum wage and better working conditions would upset the free market system

5. U TILITARIANISM Utilitarianism was a philosophy that supported government intervention. The main idea of this philosophy was that people should judge ideas, institutions, and actions based on their utility, or usefulness. Governments should try to promote the greatest good for the greatest number of people.

6. T HE R ISE OF S OCIALISM Socialism is an economic system in which the factors of production are owned by the public and operate for the welfare of all Karl Marx was a German journalist introduced a radical type of socialism called Marxism Marx believed that human society has always been divided into warring classes The final phase of socialism is pure communism in which private property and governments cease to exist

8. U NIONIZATION To press for labor reforms, workers joined voluntary associations called unions Unions would engage in collective bargaining, negotiations between the workers and their employers If factory owners refused the demands, the workers would strike

12. U NIONIZATION Unions were outlawed by the British Combinations Acts of 1799 and 1800 Workers ignored them and by 1824 the government repealed the acts By 1875, British unions had about 1 million members In the U.S. the largest labor union was the American Federation of Labor (AFL), which was formed in 1886 by several unions

13. R EFORM L AWS In Britain, Parliament passed the Factory Act of 1833, with the following provisions Illegal to hire children under age 9 Children 9-12 could work no more than 8 hrs Young adults 13-17, no more than 12 hrs In 1919, the U.S. Supreme Court ruled against a child labor law, arguing it would interfere with state’s rights to regulate labor

14. T HE A BOLITION OF S LAVERY From 1807 to 1833, Britain slowly worked to end its slave trade Some members of Parliament argued against slavery for moral reasons, others for economic reasons Slavery ended in the U.S. in 1865, Puerto Rico-1873, Cuba-1886, and Brazil-1888