An Age of Reform As industrialized nations grew, many felt that governments should stay out of business’ affairs. While others felt that governments should play an active role in bettering conditions for the poor.

An Age of Reform I. Capitalism Fuels the Industrial Revolution A. Laissez-faire economics B. Adam Smith C. Capitalism II. Rise of Socialism A. Utilitarianism B. Utopian Ideas C. Socialism D. The Communist Manifesto III. The Union Movement A. Unions B. Reform Laws

I. Capitalism Fuels the Industrial Revolution

A. Laissez-faire Economics  Philosophers believed that if the government would allow free trade, without interference, the economy would prosper.  Laissez-faire refers to government allowing owners of industry and business operate without interference.  The term comes from the French phrase that means “let do.”

B. Adam Smith  Adam Smith wrote in The Wealth of Nations in 1776 that government need not interfere in the economy.  He claimed social harmony would result without any government direction “as if guided by an invisible hand.”

C. Capitalism  The ideas of Smith and economist Thomas Malthus were the foundation of capitalism.  Capitalism is an economic system in which money is invested in business ventures with the goal of making a profit.

II. Rise of Socialism In contrast to laissez-faire philosophy, other theorists that government should intervene

A. Utilitarianism  Utilitarianism, introduced by English philosopher Jeremy Bentham, argued that the government should try to produce the greatest good for the greatest number of people.

A. Utilitarianism  John Stuart Mill led the Utilitarian movement in the 1800s.  He believed it was wrong that workers should lead deprived lives that sometimes bordered on starvation.  Mill wished to help ordinary working people with policies that would lead to a more equal division of profits.

B. Utopian Ideas  British factory owner, Robert Owen, improved working conditions.  He built low rent houses.  He prohibited children under ten from working in the mills and provided free schooling.

B. Utopian Ideas  Then, in 1824, he traveled to the United States.  He founded a cooperative community in New Harmony, Indiana.  He intended this community to be a utopia, or perfect living place.  It only lasted three years.

C. Socialism  In socialism, resources are owned by the public and operate for the welfare of all.  Socialists thought government should actively plan the economy.  They argued that the control of factories, mines, and railroads, and other key industries would abolish poverty and promote equality.

D. The Communist Manifesto  The writings of a German journalist, Karl Marx, introduced the world to a radical socialism.  He helped write The Communist Manifesto.  In the Communist Manifesto, Marx and Friedrich Engels wrote that all of history has been a struggle between the “haves” and the “have-nots”.

D. The Communist Manifesto  According to Marx and Engels, the Industrial revolution had enriched the wealthy and impoverished the poor.  They predicted the workers would overthrow the owners.  “The proletarians have nothing to lose but their chains. They have a world to win. Workingmen of all countries, unite.”

D. The Communist Manifesto  The Communist Manifesto said:  The workers would revolt, seize the factories and mills, and produce what society needed.  Workers, sharing in the profits, would bring about economic equality for all people.  After a period of cooperative living, the government would disappear and a classless society would develop.  Marx called this final stage, pure communism.

D. The Communist Manifesto  Communism is a form of complete socialism in which all resources are owned by the people.  Private property would cease to exist.  All goods and services would be shared equally.

III. The Union Movement By the 1800s, working people became more active in politics.

A. Unions  Unions – workers joined together in associations to press for reforms.  A union spoke for all the workers of a particular trade.  Unions engaged in collective bargaining-negotiations between workers and their employers.  They bargained for better working conditions and higher pay.

A. Unions  If factory owners refused these demands, union members could strike, or refuse to work.

B. Reform Laws  In both Great Britain and the United States, new laws reformed some of the worst abuses of industrialism.  Britain’s Factory Act of 1833 made it illegal to hire children under 9 years old. Children from 9 to 12 could not work more than 12 hours  In 1842 the Mines Act prevented women and children from working underground.  The Ten Hours Act of 1847 limited the workday to ten hours for women and children who worked in factories.