Factory System and Free Enterprise
Industrial Revolution Began in England in the 18th Century Very limited American Manufacturing in the 18th century Most production done at home using hands and simple tools Technology innovations created a shift toward large-scale production Picture is of an iron ore plant in Pennsylvania.
Technology Revolution Spinning jenny Produces many spools of yarn Power loom Wove & pressed thread into cloth Water frame Power machines in factories Advances made it possible for any unskilled workers to produce cloth (textiles) Especially children Patent Law Passed to protect rights of inventors
Free Enterprise and Factories Samuel Slater Built first successful water-powered textile mill in America Workers and machines together under one roof Most built near water source for power People leave farms to work in factories for wages on a set schedule Factory in Massachusetts
Free Enterprise and Factories New England ideal setting for growth of American factories Land was not conducive to farming, people willing to work in factories Many fast moving rivers Near ocean/ports
Free Enterprise and Factories Minimum government interference Competition, profit, private property, & economic freedom Many people invested in industry during the War of 1812 Businessmen built factories and grew wealthy
Impact on Cities Industrial cities grew the quickest Most on rivers Needed water power New England had many fast- flowing rivers City disadvantages Waste disposal was an issue Fires were a constant threat Overcrowded living conditions City advantages Jobs & attractions outweighed the dangers Education, culture
Foundations of Free Enterprise CAPITALISM – the freedom of individuals to invest their CAPITAL (money) in businesses of their choice in hopes of making money (profit!) Businesses are FREE to operate with little government regulation Businesses can keep PROFIT to reinvest & grow the company Private Property Profit Motive Competition Economic Freedom Relatively Low taxes COMPETITON fosters product development and lower pricing – good for business and customers! Businesses’ product decisions (quality, quantity & price) are driven by CUSTOMERS Relatively Low Taxes allow businesses to invest more capital Ownership of private property (and other assets) by individuals or businesses allows full control of decision making
Page 198 in our book
What Free Enterprise looks like…. Businesses compete for customers through price and quality. Competition helps businesses improve their products and services to meet the demands of their customer