1. CHAPTER 13 Section 1:Origins of the Industrial Revolution Section 2:The Factory System Section 3:New Methods and Business Organizations Section 4: Living and Working Conditions Section 5: Socialism The Industrial Revolution

2. SECTION 4 13.4 Bell Ringer: What were the theories of economists and philosophers during the Industrial Revolution? (see next slide for chart) Living and Working Conditions

3. SECTION 4 Living and Working Conditions EconomistTheories Adam Smith Thomas Malthus David Ricardo Jeremy Bentham John Stuart Mill

4. SECTION 4 Living and Working Conditions REVIEW! What is mercantilism? Physiocrats -believed that the wealth of nations was derived solely from the value of land agriculture or land development. -denied that commerce and manufacturing produce riches. -advocates of free trade, rejecting the "balance of trade" theory Remember the Philosophes in the Enlightenment? We’re the guys that liked to talk about economics.

5. SECTION 4 Living and Working Conditions Adam Smith The Wealth of Nations 1776 Considered the founder of classical economics Two natural laws govern all business & economic activity: 1. Law of Supply & Demand 2. Law of Competition

6. SECTION 4 Living and Working Conditions Supply and Demand If an item is scarce and EVERYONE wants it.... People will pay a high price for it and profits do what? $299 32GB

7. SECTION 4 Living and Working Conditions Competition As manufacturers compete – they MUST reduce their prices … BUT if they cut prices too much … what could happen? Supply would then decrease … and prices would do what? What’s the lesson here? You MUST be efficient -

8. SECTION 4 Living and Working Conditions Free Enterprise Mercantilist laws & regulations hinder natural economic forces. Competition should be unrestricted by laws, regulations, or government controls.

9. SECTION 4 Living and Working Conditions Other economists …. Thomas Malthus David Ricardo The Principle of Population 1798 “iron law of wages” 1817

10. SECTION 4 Living and Working Conditions Principle of Population Despite famines, epidemics, and wars, people still multiply faster than the food supply increases. Malthus believed that human misery and poverty is inevitable…

11. SECTION 4 Living and Working Conditions “iron law of wages” Supply and demand of labor determine wages …. When there is a surplus of labor (population growth), wages go down. When there is a shortage, wages go up. Working class poverty is inevitable.

12. SECTION 4 Living and Working Conditions These theories supported EMPLOYERS – they want labor as CHEAP as possible …. But they also didn’t want what? Gov’t interference! Laissez-faire “Let it be” “Leave things alone”

13. SECTION 4 Living and Working Conditions From the Middle Ages until well into the 1800s, craft and merchant guilds regulated quality and prices of goods along with working hours and wages. In the early 1800s, trade became almost completely unregulated ….. Laissez-faire!

14. SECTION 4 Living and Working Conditions Reformers ARISE! People argued that business could NOT be left entirely alone to do as it pleased. Humanitarians are people who work to Improve the conditions of others - urged reforms. Ministers preached against the selfish practices of businesses.

15. SECTION 4 Living and Working Conditions Charles Dickens wrote David Copperfield Oliver Twist Used his novels to attack greedy employers. David Copperfield – described his own childhood.

16. SECTION 4 Living and Working Conditions Jeremy Bentham –social reformer utilitarianism A law was useful, therefore good, if it led to “the greatest happiness of the greatest number” of people. People should educate themselves.

17. SECTION 4 Living and Working Conditions John Stuart Mill Government should work for the good of all citizens. Governments should protect working children and improve housing and factory conditions. On the Subjection of Women 1869 …support for women’s rights.

18. SECTION 4 Living and Working Conditions Early Reform Laws Factory Act of 1802 shortened hours and improved conditions for children in cotton mills Factory Act of 1833 Established paid inspectors to inspect factories on child labor Ten Hours Bill 1847 Limited working hours to 10 per day for women and children Factory owners will extend the 10-hour day to all employees

19. SECTION 4 Living and Working Conditions To improve their lives and working conditions, workers banded together to demand reforms… Known as collective action strikes unions When a large group of workers refuse to work, until their demands are met. When workers organize and form associations

20. SECTION 4 Living and Working Conditions

21. SECTION 4 Living and Working Conditions Workers’ Associations (unions) were illegal in many countries. Workers who united to fight for higher wages, shorter hours, and better working conditions could be imprisoned! 1870s Parliament passed laws legalizing strikes.