1. Reforming the Industrial World

2. Capitalism An economic system in which businesses and industry are privately owned and money is invested in business to make a profit. –Privately owned = individuals rather than the government Laissez-faire capitalism – government should allow free trade (free market system) –Belief that no government interference in business as the best way for the economy to prosper

3. Adam Smith Wrote The Wealth of Nations (1776) –Economic freedom = economic progress –Government should not interfere –Natural laws of economics People work for their own good Competition forces people to make a better product Supply and demand - enough goods produced at the lowest price to meet demand –Government should not help the poor because it upsets the free market system and lowers profits.

4. What is the economic system of the United States? Capitalism

5. The Rise of Socialism Economic system in which the factors of production are owned by the public and operated for the welfare of all. –Factors of production – what is need to produce goods –Public = government/society (democratic control)

6. Socialism Grew out of concern for social justice Government should plan the economy, NOT depend on free market system Government control of factories, railroads, mines, and other key industries would end poverty and promote equality Public ownership would help workers who were at mercy of employers

7. Marxism: Radical Socialism Karl Marx writes The Communist Manifesto –Human society has always been divided into warring classes: The haves and the have-nots  The bourgeoisie (owners and bosses) vs  The proletariat (workers) –Believed the Industrial Revolution had enriched the wealthy and impoverished the poor –Predicted that workers would overthrow the owners

9. The Future According to Marx Proletariat would revolt and seize factories Workers would bring economic equality to all Workers would control government Eventually government would disappear (not needed) and a classless society would develop This classless society he called communism – a form of complete socialism in which the people own the means of production. – Private property does not exist – All goods and services are shared equally

10. Labor Unions and Reform Laws By 1800s, workers wanted reform Joined together in unions (voluntary labor associations) –Represented workers in collective bargaining with employers –Would strike New laws reformed some of the abuses of industrialization –Ex. Factory Act of 1833 – illegal to hire children under 9, limited working hours of older children, no child labor in mines

12. Reform Movements Spread Abolition of slavery (Britain in 1833, US 1865) Women’s Rights –Women paid 1/3 what men were paid –Women led reform movements Formed unions Opened settlement homes to help poor people Reforms spread to –Public education –Prison reform –Democracy grew

13. Settlement Houses offered help to the poor such as child care. Why was this important?