1. The Industrial Revolution & Communism
Mr. Stowinsky
World History

2. Why did the Industrial Revolution begin in England?
Large population – lots of workers
Growing economy
Lots of natural resources
Water & coal to power the machines
Iron ore to build machines, tools, and buildings
Rivers for inland transportation
Harbors to import/export
Factors of production – land, labor, and capital (wealth)

3. Industrialization Spreads
English engineers, mechanics, and toolmakers were forbidden to leave English and share industrial secrets
Some emigrated to the United States and brought theirs ideas and machines with them
Industrialization in the US began in textile factories in New England
The US remained largely agricultural until after the Civil War
As railroads expanded, so did industrialization

4. The Rise of Corporations
Stock – shares of ownership
Corporation – a business owned by stockholders who share in its profits but are not personally responsible for its debts
Stocks allowed corporations to acquire resources and buy equipment
Workers earned low wages for working long hours while stockholders earned high profits, corporate leaders made fortunes

5. Continental Europe Industrializes
The French Revolution and Napoleon delayed the continent from industrializing
English ideas were first smuggled into Belgium
Germany industrialized but only had pockets of natural resources, making its industrialization more scattered
Other parts of Europe industrialized in pockets
Parts of Europe could not industrialize due to natural barriers (mountains, etc.) or political issues

6. The Impact of Industrialization
Shifted the world balance of power – increased competition
Widened the wealth gap between industrialized and non-industrialized countries
Powerful nations (including the US!) began creating colonies and exploiting their resources
Imperialism – extending one country’s rule over other lands
Eventually population, health, and wealth increased
Creation of a middle class meant more education and democratic participation

7. Reforming the Industrial World
Laissez faire – “let it be” – the belief that industry and business should be left alone by government
Supported by the three natural laws of economics:
Self-interest – people work for their own good
Competition – competition forces people to make a better product
Supply & demand – enough goods would be produced at the lowest possible price to met demand in a market economy

8. Capitalism
Capitalism – economic system in which the factors of production are privately owned and money is invested in business ventures to make a profit
Thomas Malthus – argued the population was outpacing food supply so there would always be poor people
David Ricardo – Wages should be forced down as population increased
Laissez-faire were against minimum wages and better working conditions, claiming they would lower profits

9. The Rise of Socialism
Some theorists felt wealthy people or the government must intervene with business to improve people’s lives
Utilitarianism – the greatest good for the greatest number of people – also pushed for reforms in the legal & prison systems and education
Beginnings of company towns, child labor laws, and free schooling

10. Socialism – factors of production are owned by the public and benefit everyone
The government should plan the economy
Government control of factories, railroads, etc. would end poverty and promote equality

11. Marxism & Communism
Karl Marx – Marxism – wrote The Communist Manifesto
Human society has always been divided into two warring classes
Bourgeoisie – “haves” – employers
Proletariat – “have nots” – workers
The wealthy controlled the means of producing goods, and the poor did difficult work for little pay. This results in conflict.
The Industrial Revolution made the rich richer and the poor poorer. Marx said the poor would overthrow the rich

12. Marx believed capitalism would destroy itself and a classless society would emerge
Communism – a form of complete socialism in which the means of production – all land, mines, factories, railroads, businesses – would be owned by the people
No such thing as private property
All goods and services would be shared equally

13. Labor Unions & Reform Laws
Unions – groups representing workers that negotiate between workers and employers
Negotiated for higher pay and better working conditions
Strike – when union members refuse to work
Unions were usually made up of skilled workers so they had more bargaining power
Reforms included limiting lengths of work days and child labor laws

14. The Reform Movement Spreads
England abolished slavery in The US ended it in Spain and Brazil followed in the 1880’s.
Women’s rights movements began – demanded the same pay as men – usually only made 1/3 of what men did
Public education systems were set up in the US and Europe
Prison systems were reformed