1. The Industrial Revolution
Chapter 25 – 4
Reforming the Industrial World

2. Industrial Revolution widened the gap between rich and poor.
? Business and government – role in each
Workers demanded more rights and protection – formed labor unions.

3. Philosophers of Industrialization
Laissez faire – economic policy of letting owners of industry and business set working conditions without interference.
‘Let do’
French philosophers of Enlightenment
Government regulation interfere with production of wealth
Advocated free trade- flow of commerce in the world market without regulation

4. Adam Smith Defended idea of free economy Wealth of Nations
Economic liberty guaranteed economic progress
3 natural laws
Law of self interest - people work for their own benefit)
Law of competition – forces people to make a better product
Law of supply and demand – goods produced at lowest possible prices to meet demand

5. Economists of Capitalism
Smith’s ideas supported by Malthus and Ricardo
Also believed natural laws governed economic life
Ideas foundation of laissez-faire capitalism
Capitalism – economic system in which factors of production are privately owned and money is invested to make a profit

6. These ideas helped bring about the Industrial Revolution
Malthus, Smith and Ricardo opposed government help for the poor
Creating minimum wage jobs and working conditions upset the free market system, lower profits and undermine production of wealth

7. Rise of Socialism
Others believe government should intervene – government must take action to improve people’s lives
Utilitarianism- Jeremy Bentham: ideas, institutions and actions should be evaluated on usefulness
Government should promote greatest good for greatest number of people
Policy only useful if met this end
In general – individuals should pursue goals without interference from state

8. John Stuart Mill – philosopher and economist: led utilitarian movement
Questioned unregulated capitalism
Wanted to help ordinary people with policies with more equitable division of profits
Favored cooperative system of agriculture and women’s rights

9. Utilitarians also pushed for reforms in legal systems, prison and education

10. Socialism Fourier and Saint-Simon suggested socialism
The factors of production are owned by the public and operate for the benefit of all
Optimistic view of human nature
Government should plan economy
Government control would end poverty and promote equality

11. Karl Marx Marxism – radical type of socialism
Communist Manifesto – middle class haves (bourgeoisie) and workers or have nots – proletariat
Wealthy controlled means of producing goods, poor did labor
Industrial Revolution enriched the wealthy and impoverish the poor

12. Capitalist system would eventually destroy itself by:
Factories would put artisans out of business
Small number of manufacturers would control wealth
The workers – proletariat – would revolt, take factories and mills, produce what society needed
Workers would share in profits and bring about economic equality for all

13. Workers would control government in a ‘dictatorship of the proletariat
A period of cooperative living and education would evolve into a classless society
Pure communism – form of complete socialism in which the means of production are owned by the people

14. Private property does not exist
All goods and services are shared equally
Economic forces alone dominate society

15. Time has shown that religion, nationalsim, ethnic loyalties and a desire for democratic reforms may be as strong influences as economic forces.

16. Labor Reform Workers created and joined ‘unions’
Spoke for all the workers in a particular trade
Collective bargaining: Better working conditions and higher pay
Strike – refuse to work
Skilled workers led the way
Governments saw unions as a threat to social order and stability

17. Reform Laws corrected abuses and child labor Women’s rights
Factory – higher wages than working at home
Earned less than men
Movement for women’s rights
Abolition of slavery:
Some were morally against
Other economic threat

18. Reforms
Horace Mann – free public education