1. Reforming the Industrial World
Chapter 25 Section 4

2. Philosophies of Industrialization
Laissez Faire (lehs-ay-FAIR)
Economic policy of letting owners of industry to set working conditions without interference of government.
Term is French for “let do”
Leave business alone!
From the Enlightenment: Government put’s burden on business and interferes with businesses’ profits

3. Adam Smith Wrote “The Wealth of Nations” (1776)
Defended a Free Economy
Liberty guaranteed economic ($) progress
Created 3 Natural Laws of Economics
Law of Self-Interest
Law of Competition
Law of Supply and Demand

4. Adam Smith Adam Smith – Father of Capitalism Capitalism
Economic system in which the factors of production are privately owned and money is invested in business ventures to make a profit ($)
Think of it as an “INVISIBLE HAND GUIDING THE MARKET (ECONOMY)”

5. Cow Metaphor - Capitalism
You have two cows. You sell one and buy a bull.

6. Socialism Founder Definition Goal Charles Fourier Saint-Simon
Factors of production are owned by the government
Goal
End poverty and promote equality
Plan your community vs. Freedom of choice

7. Cow Metaphor - Socialism
You have two cows. You keep one and give one to your neighbor.

8. Marxism Founders: Theory: Karl Marx & Frederick Engles
Wrote theory in the book “Communist Manifesto”
Theory:
Have’s – Bourgeoisies (Oppressor)
Have Not’s - Proletariats (Oppressed)
Proletariats will always overthrow the Bourgeoisies and then they become the new bourgeoisies.

9. Communism Final Phase of Marxism – Communism Definition
All factors of production are owned by ALL.
Never seen a “pure” form of communism
Ruled by dictators that run their economy for their own profit.
Countries that are communist today: China, Cuba, North Korea, Vietnam

10. Cow Metaphor - Communism
You have two cows. The government takes them both and provides you with milk.

11. Utilitarianism Founder: Definition: Goal: Jeremy Bentham
Judge ideas, institutions, & actions based on utility or usefulness
Goal:
Work for policies that lead to more equal division of profits ($)