1. The Industrial Revolution Chapter Nine
Reforming the Industrialized World
Section Four

2. The Philosophers of Industrialization: Laissez Faire Economics
Laissez Faire- The economic policy of letting owners of industry and business set working conditions without interference.
This policy favors a free market unregulated government.
This idea came from French Enlightenment philosophers.
They argued that if government simply allowed free trade and had no regulations on business, the economy would prosper and all would benefit.

3. Adam Smith
Adam Smith was a professor at the University of Glasgow in Scotland.
He defended the idea of a free economy and free markets in his 1776 book The Wealth of Nations.
Smith believed that economic progress rested on three natural laws of economics:
The law of self interest- People work for their own good.
The law of competition- Competition forces people to make a better product.
The law of supply and demand- Enough goods would be produced at the lowest possible price to meet demand in a market economy.

4. The Economics of Capitalism
Smith’s ideas were supported by British economists Thomas Malthus and David Ricardo. Their ideas formed the foundation of laissez faire capitalism.
Capitalism- An economic system in which the factors of production are privately owned and money is invested in business ventures to make a profit.
Thomas Malthus wrote in his book of 1798 entitled An Essay on the Principle of Population, that population tended to increase faster than the food supply. Wars and epidemics were necessary to kill off the extra people, so the rest could avoid poor and miserable lives.
David Ricardo wrote in his book of 1817 entitled Principles of Political Economy and Taxation, that a permanent underclass would always be poor. He said that the law of supply and demand applied to labor as well. Wages of workers would be forced down as population increased.
These Enlightenment capitalists opposed minimum wage laws and requirements for better working conditions as impediments to higher profits and the production of wealth in society.

5. The Rise of Socialism
In contrast to laissez Faire philosophy, some theorists believed that government should intervene to help workers.
They believed that without action, the economic and political stability of the nation would be jeopardized.

6. Utilitarianism
Jeremy Bentham, an English philosopher, modified the ideas of Adam Smith.
He introduced the philosophy of utilitarianism.
He said that people should judge ideas, institutions, and actions on the basis of their utility or usefulness.
He argued that government ought to promote the greatest good for the greatest number of people.
John Stuart Mill, an economist, led the utilitarian movement in the 1800’s.
He questioned unregulated capitalism.
He felt that it was wrong to that workers should lead deprived lives.
He believed in a more equal division of profits.
This movement also supported changes in the legal system, prisons, education, and women’s rights.

7. Utopian Ideas
A British factory owner named Robert Owen improved working conditions at his factory.
He built low rent housing, provided free education to workers children, and forbade children under ten from working in the mill.
In 1824 he traveled to America and founded New Harmony, what was to be a utopian community in Indiana.
It lasted only three years, but inspired the founding of other communities.

8. Socialism
French reformers such as Charles Fouier, Saint Simon, and others introduced a new economic system called socialism.
Socialism- The factors of production are owned by the public and operate for the welfare of all.
Socialism depended on an optimistic view of human nature. A belief in progress, and concern for social justice motivated socialists.
The way to eradicate poverty was to have government control of factories, mines, railroads, and other key industries.
Many socialists also advocated the extension of the right to vote to women and people of color.

9. Marxism: Radical Socialism
The writings of a German journalist named Karl Marx introduced the world to a radical type of socialism called Marxism.
Karl Marx and Friedrich Engels, another German, outlined their ideas in a 23 page pamphlet called The Communist Manifesto.

10. The Communist Manifesto
In their manifesto, Marx and Engels argued that societies have always been divided into warring factions.
The Middle Class (Bourgeoisie) = “the haves”
The Working Class (Proletariat) = “have-nots”
According to them, the Industrial Revolution had enriched the wealthy and impoverished the poor.
“The proletarians have nothing to lose but their chains. Workingmen of the world unite!”

11. The Future According to Marx
Marx believed that the capitalist system would eventually be destroyed by a revolution of the working class and be replaced by a “dictatorship of the proletariat.”
This would be called communism.
Communism- a form of complete socialism in which the means of production is owned by the people.
Private property does not exist in communism.
All goods and services are shared equally.
The Communist Manifesto produced few short term results.
It did, however, in the 1900’s inspire revolutionaries such as Russia’s Lenin, China’s Mao Ze Dong, and Cuba’s Fidel Castro.
The major gap between rich and poor that Marx and Engels predicted failed to materialize.
Other factors such as religion, nationalism, ethnic loyalties, and desire for democracy proved to be at times stronger influences on society than economic conditions.

12. Labor Unions and Reform Laws
Factory workers faced long hours, dirty and dangerous working conditions, and the threat of being laid off.
By the 1800’ some working people joined voluntary labor associations called unions.

13. Unionization Unions spoke for all workers of a particular trade.
They negotiated with employers for better wages and working conditions.
If employers refused to their demands, union members could strike.
Skilled workers formed the first unions, because they had special skills that would have been expensive to replace.
Unions developed slowly. In 1799 and 1800, Britain passed laws outlawing unions and strikes.
These laws were repealed by 1825.
By 1875 unions were well established in Britain with over one million members.
Unions were formed in the U.S. since the early 1800’s.
In 1886, several unions joined together to form the AFL or American Federation of Labor. They helped workers gain higher wages and shorter hours.

14. Reform Laws
Eventually reformers and unions forced political leaders to change labor laws in both Britain and the United States.
In 1833 Britain passed the Factory Act which made it illegal to hire children under 9 years old. Children between 9 and 12 could not work more than 8 hours. Children between 13 and 17 could not work more than 12 hours.
In 1842 the Mines Act prevented women and children from working underground.
In 1847 the Ten Hours Act limited the workday to ten hours for women and children working in factories.
In the U.S. in 1904, a group of reformers organized with unions to form the National Child Labor Committee.
This committee helped pass laws to limit child labor.
In 1919 the U.S. Supreme Court objected to such laws and required that they be passed by states rather than the federal government.

15. The Reform Movement Spreads
Reform movements that promoted child labor laws also promoted other causes:
Improving working conditions
Extending the right to vote
Abolition of slavery
Women’s rights
Children’s rights

16. The Abolition of Slavery
Britain in 1833
United States in 1865
Puerto Rico in 1873
Spain (Cuba) in 1886
Brazil in 1888
This marked the end of legalized slavery anywhere in the world.

17. The Fight for Women’s Rights
The women’s movement for equal rights began in both Britain and the United States.
Women fought for the abolition of slavery and later demanded equal rights for themselves.
In the U.S. the movement formally began in By 1899 it was a powerful movement which held international meetings.

18. Reforms Spread to Many Areas of Life
Reform movements soon tried to correct problems in several areas.
Prison reform was high on the list. Reformers insisted that prisoners were not being prepared for a useful livelihood upon release.
Education reform was also stressed. Free public schools were advocated to educate a free people and prepare them for their civic duties of voting and participating in a democratic republic.
By the 1850’s several states were experimenting with free public education.