3 LAISSEZ-FAIRE CAPITALISM Laissez-Faire translates directly into ‘leave be’ and is defined, in economical terms, as ‘non-interference or non-intervention; supports free markets and an individual’s rights to own private property’.In Europe , this theory began with physiocrats - a group who believed the economy could be based on agriculture and land development. Jean-Claude Vincent de Gournay, who originated the physiocrat movement, believed that the government should let the economy follow the course of nature (survival of the fittest), unless life, liberty and property were in jeopardy.These ideals spread throughout the continents and were adopted by Adam Smith, who wrote The Wealth of Nations with these principles in mind.Next to no government involvement in the economy meant, during the Industrial Revolution, factory owners could offer whatever wage they so chose to offer. It allowed the individual to pay such a small wage that the labourers remained impoverished while the owners continued to profit massively.This theory became closely associated with the ideas and principles of Classical Liberalism.
4 INDUSTRIALIZATIONIndustrialization is defined as ‘the stage of economic development during which the application of technology results in mass production and mass consumption within a country’.This term is also related to urbanization (the transfer of population from rural regions to urban centers) and changes in national living standards.The creation of factories and the idea of industry, which is the creation of goods for a profit. In the pursuit of these profits, factories sprang up all over Europe as more and more inventions to reduce the difficulty of production were invented.This largely supported the development of classical liberalism as it allowed the individual to profit greatly. It encouraged a voracity to make, produce and earn. But while the factory owners were earning and producing, the actual labourers themselves earned next to nothing.
5 CLASS SYSTEMThe class system, defined as ‘a division of society (the middle class, for example) usually determined by wealth, privilege, or role in society’ contributed greatly to the beginnings of classical liberalism as it embraced the idea that class is evidence of fair distribution of society’s wealth and resources based on the individual’s talents and initiative.In terms of social structure, the industrial revolution saw a sort of boom in the middle class (made up of industrialists and business men). These ordinary working people saw opportunities for employment in new mills and factories. However, the working conditions in these places were commonly very poor.
6 LIMITED GOVERNMENTLimited government is the principle of little government involvement in the affairs of an economy, in the belief that this results in more efficient and self regulating markets. It allows for the individual to prosper and coincides with classical liberalistic principles. Mainly that government involvement should be limited to provide a free-market in which competition
7 CAPITALIST THINKERSJean-Baptiste Say was a French economist who introduced Adam Smith’s ideas into France. “Say’s law” states that there can be no overproduction in a market, that Supply and Demand could balance themselves on their own. It was because of this law that most thought it futile for a government to intervene in times of economical crisis.Adam Smith believed that self interest could serve universal good, thinking of self interest as an “invisible hand”. This ideal justified the pursuit of wealth. Smith also believed that t government intervention should only be allowed in the areas of justice, defense and public works.Thomas Malthus believed that growth in population would outstrip food production, and that the growth of mankind was held in check by “vice and misery”.David Ricardo, an admirer of Adam Smith, covered many of the topics he did but drew conclusions from induction rather than empirical findings. He thought that wages could not exceed the minimum to support the human population.
8 PART TWO : UTOPIAN SOCIALISM IN RESPONSE TO CLASSIC LIBERALISM CLASSICAL LIBERALISMPART TWO :UTOPIAN SOCIALISM IN RESPONSE TO CLASSIC LIBERALISM
9 WHAT IS UTOPIAN SOCIALISM? Utopian Socialism is the first currents of modern socialist thought as shown by the work of Henri de Saint-Simon, Charles Fourier, and Robert Owen, which inspired Karl Marx and other early socialists.It is an economic system based on the idea that if capital voluntarily surrendered its ownership of the means of production to the state or the workers, unemployment and poverty would be no more.The utopians were essentially humanitarians who advocated an end to the appalling conditions of the average worker in the industrial capitalistic societies of the time. Idealistic rather than pragmatic, utopian socialists did not intend to overturn the basic political, economic and social systems. Individuals (I.e. Robert Owen, Charles Fourier, Horace Greeley and Claude Saint-Simon) believed that education and improved working conditions could peacefully eradicate the worst aspects of capitalism , thus leading to an ideal socialist society where everyone would live happily; hence the term “Utopian”.
10 KEY PEOPLECharles Fourier’s concern was to free every human individual in two aspects: education and the liberation of human passion. He supported feminism and defended homosexuality. In the mid 20th century Fourier’s influence began to rise among the socialist community outside the Marxist mainstream.Horace Greeley was a member of the Liberal Republican Party and outspoken opponent of slavery. Utopia fascinated him. He supported the working man and attacked monopolies of all sorts.
11 ROBERT OWEN“…not for a sect, or a party, or for a country or a colour — but for the human race, and with a real and ardent desire to do good.”- Robert OwenIn 1800 Robert Owen and several business partners purchased the Chorton Twist company in New Lanark, Scotland: the largest cotton spinning company in Britain.Owen used the mill to demonstrate his utopian principles ,like mandatory schooling until the age of ten, free healthcare, adult education, comfortable housing, clean streets, and reasonably priced company shops).