1. Reforming the Industrial World Ch.9 Sec.4

2. Background Wide gap between the rich and the poor in industrialized countries during 19 th century Business leaders felt government should stay out of economic affairs Economic reformers felt governments needed to have an active role in economics Workers are beginning to demand more rights and protection

3. Laissez Faire Economics Letting business/industry owners set working conditions without interference Adam Smith ▫Economic professor ▫Wealth of Nations- defended idea of free market/economy Smith’s Argument 1.Law of Self-Interest- people work for their own good 2.Law of Competition- competition forces people to make better products 3.Law of supply & demand- enough goods produced @ lowest possible price to meet demand in a market economy

4. Capitalism Economic system Factors of production are privately owned and $ is invested in business to make a profit This idea helped cause Industrial Revolution Oppose government efforts to help poor workers Believed that creating minimum wage jobs and better working conditions would…. 1.Upset free market system 2.Lower profits 3.Undermine production of wealth

5. Rise of Socialism Opposite of laissez-faire/capitalism ▫Believed government should intervene Utilitarians ▫Believed an idea/practice was only good if it proved useful ▫Believed it was unfair that workers worked so hard for such little pay in such bad conditions ▫Felt government should eliminate wealth differences in people

6. Rise of Socialism Utopian Society- everyone works to produce goods for community (nobody is paid) Robert Owen- British factory owner ▫Wouldn’t allow children under 10 to work ▫Provided free schooling ▫Traveled to U.S. and set up utopian community called New Harmony, Indiana ▫Lasted 3 years, but led to other utopian communities starting

7. Rise of Socialism Socialism ▫Offset the effects of industrialization ▫Factors of production owned by the public and operate for welfare of all ▫Argued that government should plan the economy rather than rely on free market capitalism ▫Government control of industries would end poverty and promote equality

8. Communism Karl Marx- German socialist ▫Developed radical form of socialism (Marxism) ▫Communist Manifesto- described communism as a form of socialism where all production is owned by the people or state ▫Workers shared profits to benefit all ▫Did NOT believe in private property ▫Inspired Vladimir Lenin (Russia), Mao Zedong (China), & Fidel Castro (Cuba)

9. Labor Unions Factory workers faced long hours, dirty & dangerous conditions, and the threat of being fired 1800s people joined together in volunteer labor associations called UNIONS. ▫Spoke for all workers ▫Bargained for better wages/conditions ▫Could strike (not work) if factory owners refused demands

10. Labor Reforms Investigations of child labor occurred in ▫Factory Act- no children un age 10 ▫Kids from 13-17 no more than 12 hrs. Mines Act ▫Prevented women & children from working underground Ten Hours Act ▫Limited work day for 10 hrs. for women & children 1904- U.S. ended child labor

11. Reform Movement Slavery ▫William Wilberforce- argued for abolition in Great Britain ▫Ended in most of the western hemisphere by late 1800s Women’s Rights ▫More opportunities ▫Higher wages ▫Safer conditions ▫International Council for Women- 1888 Education ▫Horace Mann ▫Free public education for children Prison ▫Alexis de Tocqueville ▫Argued for prison reforms