1. Industrial Revolution Day 3
Objective: Summarize the social and economic effects of the Industrial Revolution.
&
Compare the philosophies of capitalism (Smith), Socialism (Own), and communism (Marx).

2. Capitalism
An economic system in which the factors of production are privately owned and money is invested in business ventures for profit.
Stemmed from laissez-faire: the economic policy of letting owners of industry and business set working conditions without interferece.
Opposed government efforts to help poor workers.
believed that minimum wage laws and better working conditions would upset the free market system by lowering profits.

3. Adam Smith (capitalism)
Wrote The Wealth of Nations.
He believed economic liberty = economic progress.
He developed the 3 natural laws of economics:
the law of self interest: people work for their own good
the law of competition: competition forces people to make a better product
the law of supply and demand: enough goods would be produced at the lowest possible price to meet demand in a market economy.

4. Thomas Malthus (capitalism)
Wrote An Essay on the Principle of Population.
He argued that population tended to increase more rapidly than the food supply.
Without wars and epidemics to kill off the extra people, most were destined to be poor and miserable.

5. David Ricardo (capitalism)
He wrote Principles of Political Economy and Taxation.
He believed that a permanent underclass would always be poor.
As population increased and there were more workers available, wages would go down.
As population decreased and there were less workers available, wages would go up.

6. Utilitarianism - Jeremy Bentham
Introduced by Jeremy Bentham.
He believed people should judge ideas, institutions, and actions on the basis of their utility, or usefulness.
He thought the government should promote the greatest good for the greatest number of people.
government policies were only useful if it promoted this goal.
He also believed that individuals should be free to pursue their own will without interference from the state.

7. Utilitarianism - John Stuart Mill
John Stuart Mill led the utilitarian movement in the 1800s.
He questioned unregulated capitalism.
He thought it was wrong that workers led deprived lives.
He supported:
an equal division of profits
cooperative system of agriculture
women’s rights (including the right to vote)

8. “Utopia” - Robert Owen Established in New Harmony, Indiana.
Prohibited children from working in factories and provided them with free school.
Provided low rent houses.

9. Socialism
The factors of production are owned by the public and operate for the welfare of all.
The government should plan the economy rather than depend on free market capitalism.
this would end poverty and promote equality.
public ownership would help workers who were at the mercy of their employers.

10. Marxism: Radical Socialism
Karl Marx introduced a radical type of socialism which he called Marxism.
He outlined his ideas in the Communist Manifesto.
argued that society has been divided into 2 warring classes: the haves and the have nots.
Marx argued the Industrial Revolution enriched the wealthy and impoverished the poor who did all the back breaking labor.

11. Marx continued...
Marx believed capitalism would eventually destroy itself.
factories would drive artisans out of business which would leave a small number of manufacturers controlling all of the wealth →
The large, working class would revolt, seize the factories and mills from the capitalists and produce what society needed. →
Workers would then control the government →
A classless society where everyone is equal.

12. Communism - the final phase
Marx called the final phase of his predicted future communism:
A form of complete socialism in which the means of productions would be owned by the people.
Private property would cease to exist.
All goods and services would be shared equally.

13. Labor Unions
A union is a voluntary labor association that pressed for reforms.
They spoke for all the workers in a particular trade by participating in collective bargaining (negotiations between employers and employees).
They advocated for better working conditions and better pay.
If factory owners refused these demands the workers could strike (or refuse to work).
Great Britain and the US feared unions because they were seen as a threat to social order and stability.

14. Reform Laws - Great Britain
Unions forced governments to look into the abuses caused by industrialization.
Factory Act of 1833
Made it illegal to hire children under 9 years old.
Children 9-12 could not work more than 8 hours a day.
Young people could not work more than 12 hours a day.
Mines Act of 1842
Prevented women and children from working underground.
The Ten Hours Act of 1847
Limited the work day to 10 hours for women and children.

15. Reform Laws - The US
In 1904 the National Child Labor Committee set out to end child labor.
The Supreme Court decided this was up to individual states to decide.

16. Abolition of Slavery Great Britain
Some were morally against slavery and others viewed it as an economic threat.
Industrialization provided cheap labor which was more cost efficient to employers.
The US
Ended when the Union won the Civil War.
Spain
Abolished slavery in its last colony, Cuba, in 1888.

17. Social Reforms
Women made only ⅓ as much as men did in the same profession so they made their own trade unions.
Public education and prisons were reformed.