Reforming the Industrial World

Chapter 9-4

Main IdeaThe Industrial Revolution led to economic, social & political reforms

Why It Matters NowMany modern social welfare programs developed during this period of reform

Objectives

Laissez faire Adam Smith Capitalism Utilitarianism Socialism

Karl Marx

Communism Union Strike

Key Terms & Names

Laissez faire – economic policy of allowing

owners of business & industry to set working conditions without government interference French = “Let do”

The Philosophers of Industrialization

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

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

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

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

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

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

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

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

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

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

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

Parliament began investigating child labor &

working conditions READ – pages 304 – 306

Reform Laws