1. NEW WAYS OF THINKING The Industrial Revolution

2. Objectives Understand laissez-faire economics and the beliefs of those who supported it. Describe the doctrine of utilitarianism. Summarize the theories of socialism. Explain Karl Marx’s views of the working class, and responses to Marxism.

3. Terms and People  Thomas Malthus – British economist; wrote An Essay on the Principles of Population warning that the population would outgrow the food supply  Jeremy Bentham – British philosopher and economist who advocated utilitarianism  utilitarianism – the idea that the goal of society should be “the greatest happiness for the greatest number of citizens,” and that this should be the basis for judging all laws

4.  socialism – the belief that the means of production should be owned and operated by and for the people in general rather than by and for private individuals  means of production – farms, factories, railways, mines, and other large businesses that produce and distribute goods  Robert Owen – a Utopian who set up a model community at his cotton mill in Scotland

5.  Karl Marx – German philosopher who, with Frederick Engels, published The Communist Manifesto predicting class struggle  communism – in practice, a system in which a small elite controlled the political and economic life of a nation  proletariat – society’s “have nots,” the working class

6. Define the term capitalism  An economic system where money is invested in business ventures w/the goal of making a profit

7. Why did the economist Adam Smith support capitalism?  Individuals freely (NATURALLY) follow their own self-interests  Sellers make money producing what buyers want to buy NATURALLY  Prices will be set NATURALLY based on theory of supply and demand  Called the invisible hand  Creating minimum wage/working condition laws will only undermine wealth

8. Discuss the economic theories of Thomas Malthus and David Ricardo. Be sure to include if they were supporters of laissez-faire economics or not.  Malthus – population tends to increase more rapidly than food supply  Wars and epidemics kill off extra people  There will always be an “underclass” of poor, don’t help them  Ricardo – believed wages should be kept low as a deterrent to population growth (kids are expensive)  Both were supporters of laissez-faire

9. Laws should be judged by their utility to benefit people. Bentham believed that the goal of society should be “the greatest happiness for the greatest number of citizens.” This idea was called utilitarianism. Other thinkers, such as Jeremy Bentham, believed there should be some government intervention in the economy.

10. The champions of laissez-faire economics praised individual rights, whereas socialists focused on the good of society in general. Socialism: The people as a whole should own and operate the means of production for the general good. Capitalism: Individuals should own and operate the means of production for profit.

11. Discuss some ideas of early utilitarian thinkers such as Jeremy Bentham and John Stuart Mill.  Bentham – Goal of society should be to promote the greatest good for the greatest number of people  Mill – believed unregulated capitalism was wrong  Wanted policies designed to create more equal distribution of profits

12. Describe the utopian community that Robert Owen created and discuss how some of these ideas are still relevant in the world today  Prohibited children under 10 from working in mills  Provided free schooling to children of workers  Built houses and rented them at low rates  Called his societies “utopian” or ideal societies

13. * Describe the key characteristics of socialism and be sure to know how it differs from Capitalism. *

14. TONIGHT’S HW  Write a 6-8 sentence paragraph comparing and contrasting the economic systems of capitalism and socialism.  Use today’s packet for assistance

15. He formulated a new theory of “scientific socialism.” German philosopher Karl Marx condemned the ideas of the Utopians as unrealistic idealism.

16. Along with Englishman Frederick Engels, Marx published The Communist Manifesto in 1848. He predicted a struggle between the social classes that would lead to a classless society. The workers would take over all of the means of production, such as the farms, factories, and railways, and run them for the public good.

17. Marx theorized that all of history was a struggle between the “haves” and the “have-nots.” In industrialized Western Europe, the “haves” were the business owners or bourgeoisie. The “have-nots” were the workers, or proletariat. In the end, the proletariat would unite along class lines, take control of the means of production, and end the struggle.

18. Marx called for workers everywhere to unite and overthrow the capitalists. In Germany, socialists adapted Marx’s beliefs to form social democracy, a political ideology calling for a gradual transition from capitalism to socialism. Russian socialists embraced Marx’s ideas and set up a communist- inspired government in 1917.

19. What did Marx believe the Industrial Revolution was doing to the poor? What did he predict would result from this?

20. Discuss Marx’s theory of how capitalism would eventually destroy itself. Be sure to include the term proletariat in your response.

21. How would a “classless society” develop according to Marx’s theory?

22. The final phase of Marx’s theory is called communism, please define the term.

23. Discuss the impacts that Marx’s The Communist Manifesto had, both on Europe and beyond.

24. Although many socialist ideas have taken root in the modern world, Marx’s predictions have not come true. What are some reasons why this is so?

25. What were the main problems faced by unions during the 1800s?

26. How did the unions overcome these problems?

27. List and describe at least 3 key reform laws passed to curb problems related to early industrialization.