1. Reforming the Industrial World
25.4 Notes

2. The Philosophers of Industrialization
In response to the Industrial Revolution, philosophers came up with a few different economic systems
One new concept was Laissez-faire:
economic policy of letting owners of industry and business set working conditions without interference
free market unregulated by the government
means “let do” in French

3. Adam smith
Wrote The Wealth of Nations (1776): economic liberty=economic progress
He is credited with the idea of free markets/free economy
“Invisible hand” will guide the economy if left alone because people follow their self-interest
3 natural laws of economics:
the law of self-interest: ppl will work for own good
the law of competition: it helps create better products
the law of supply and demand: goods will be produced at the lowest possible price to meet demand

4. The economics of capitalism
Capitalism: economic system where factors of production are privately owned and money is invested to make a profit; helped bring about Industrial Revolution
Thomas Malthus wrote An Essay on the Principle of Population(1798): population increasing faster than food supply=more ppl are destined to be poor and miserable
David Ricardo: Principles of Political economy and Taxation(1817) in market system there will always be a poor class bc too many workers=workers paid cheap bc excess supply

5. utilitarianism
Jeremy Bentham’s idea: utilitarianism: ppl should judge ideas, institutions, and actions based on their usefulness; gov’t should promote greatest good for greatest number of ppl
John Stuart Mill led the utilitarian movement in 1800s; wanted to equalize ppl, reforms in legal and prison systems and in education; women’s rights

6. Utopian ideas
Robert Owen was factory owner, shocked at conditions and improved them for his employees by building low rent housing, prohibiting children under 10 from working
Founded New Harmony in US, cooperative community, supposed to be utopia: perfect place; only lasted 3 yrs but inspired other cooperative communities to start

7. The rise of socialism
Opposite to laissez-faire, some believed gov’t should intervene to help poor
Def: Economic system where The factors of production(land, labor, capital) are owned by the public and operate for the welfare of all
Grew out of belief in progress, concern for social justice; gov’t should control economy, help end poverty and promote equality; sought to offset ills of industrialization

8. Marxism: radical socialism
German journalist Karl Marx created radical type of socialism: Marxism
Marx along with Engels wrote The Communist Manifesto
Human societies have always been divided into warring classes, bourgeoisie (employers, “haves”) and the proletariat (workers, “have nots”)
predicted overthrow of society by proletariat

9. The future according to marx
Communism: final phase, complete socialism in which means of production would be owned by ppl
no private property
Capitalism, which caused the IR, would destroy itself bc causes small grp to own all wealth; proletariat would revolt, wrkers share in profits, bring about economic equality, no gov’t=classless society
Marxism inspired revolutions in Russia (Lenin), China (Mao), and Cuba (Castro)
Marx and Engels believed economic forces alone dominated society-time has shown not true

10. Labor unions and reform laws
Voluntary labor associations: unions
Unions used collective bargaining(negotiations between workers and employers) for better conditions, wages; would strike: refuse to work
Unions in both US and GB-GB outlawed them at first, then “tolerated” them
Reform Laws
Both countries made reforms: Factory Act of 1833: no children under age 9, set limits for 9-17 yr olds
Parliament also passed 10 hr day; US too

11. The reform movement spread
The Abolition of Slavery
1833 Britain abolished slavery in its empire
US ended it in 1865, Brazil 1888-arguments against it for moral and economic reasons
The Fight for Women’s Rights
Ind Rev was mixed blessing-women made more money, but 1/3 of what men made
Women led reform mvments in both countries; 1848 women’s rights started in US
Reforms Spread to Many Areas of Life
Public edu(led by Horace Mann, wanted free public education for all kids)
prison reform