Aim: Identify thinkers and ideas that supported industrialization

The Philosophers of Industrialization 19th Century: Industrial Revolution opened a wide gap between the rich & poor Business leaders believed that governments should stay out of business & economic affairs Laissez Faire: Refers to the economic policy of letting owners of industry & business set working conditions without interference Policy favors a free market unregulated by the government Stemmed from French economic philosophers of the Enlightenment Argued that government regulations only interfered with the production of wealth Philosophers believed that if government allowed free trade, then the economy would prosper 2

Adam Smith & The Wealth of Nations Professor at the University of Glasgow, Scotland Defended the idea of a free economy or free market 1776: Writes the Wealth of Nations Claims economic liberty guaranteed economic progress Result: Government should not interfere Smith’s argument rested on what he called the three natural laws of economics Law of self-interest Law of competition Law of supply & demand 3

The Economists of Capitalism Smith’s basic ideas were supported by British economists Thomas Malthus & David Ricardo Believed that natural laws governed economic life Important ideas were the foundations of laissez-faire capitalism Capitalism: Economic system in which the factors of production are privately owned & money is invested in business ventures to make a profit Laissez-Faire thinkers such as Smith, Malthus, & Ricardo opposed government efforts to help poor wages Thought that creating minimum wage laws & better working conditions would upset the free market system 4