1. Industrial Revolution Fri 3/7: Economic Systems of the Industrial Age Objective: Examine the rules of an early European factory and compare the factory system to the cottage industries. Bell Work: If you were to have your own business – name 1 golden rule that you would all of your employees to…

2. Industrial Revolution Socialism, Communism and Capitalism

3. Industrial Revolution Capitalism: Free Market System Definition: Economic system in which individuals rather than governments control the factors of production – Factories and Owners v. Workers – Leader: Adam Smith wrote “The Wealth of Nations” supporting Capitalism

4. Industrial Revolution Capitalism 1. Define Means of Production: Everything used to produce and exchange goods – Land, Railroads, Mines, Factories, Stores, Banks and Machines

5. Industrial Revolution In Capitalism (Business), who controls the Means of Production? – Owners: own business and get profit

6. Industrial Revolution Capitalism Role of Government: – Laissez-Faire: Government stays out of business (let owners control business) Class System is necessary and based on multiple factors but people can move between groups

7. Industrial Revolution Who would like Capitalism? – Owners, Rich

8. Industrial Revolution Socialism Because of capitalism, there was a large difference between rich and poor – Some believed that there was a better way to distribute the wealth evenly so all could benefit

9. Industrial Revolution Socialism – Definition: governments own the means of production and operate them for the benefit of all people, rich or poor – All people have the right to share in the profit ($$ from factories) – Get rid of profit and competition

10. Industrial Revolution Socialism Leaders: Robert Owen, Jerry Bentham Means of Production: Government owns major industries (railroads, heavy industry) but small private ownership of business is allowed

11. Industrial Revolution Socialism Role of Government: Owns and operates major industries; Regulates Economy Class System: Classes are more equal

12. Industrial Revolution Socialism Who would like Socialism? – Workers and Middle Class who gain

13. Industrial Revolution Communism – Definition: Government owns the means of production and controls economic planning; believed that violent revolution against owners was necessary

14. Industrial Revolution Leader: Karl Marx Karl Marx Published Communist Manifesto – “The history of all hitherto existing society is the history of class struggle” – #2: All issues are the struggle between bourgeoisie and proletariat – #3:Proletariat: Working Class (have-nots) – #4:Bourgeoisie: Owners (Middle Class) (haves)

15. Industrial Revolution Communism: Marx is first believer in ‘Communism’ – Each person contributes what he/she can – Each person receives what he/she needs

16. Industrial Revolution Communism Means of Production: Government or the “Collective People” (workers and everyone else) (Share Profits) Role of Government: Owns and operates all business Class System: No Classes

17. Industrial Revolution Communism Who would like Communism? – Lower Working Class and Poor

18. Industrial Revolution HW (if not finished in class): Reading on Capitalism and Communism – The Wealth of Nations by Adam Smith – The Communist Manifesto by Karl Marx