The Industrial Revolution Chapter 25 – 4 Reforming the Industrial World

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Reforms Horace Mann – free public education