1. New Economic Ideologies Industrial Revolution

2. Do Now: What is an economic system? The system of production, distribution, and consumption of goods/resources

3. Economic Questions Economic systems answer these questions: 1.What will be produced? 2.How will it be produced? 3.For whom it will be produced?

4. Capitalism Adam Smith- Wealth of Nations If everyone acts based on their own self-interest it will add up to the common good Individuals own means of production and determine what to produce, how much, and for whom Laissez-faire-business without gov’t interference Self-regulating meter of supply and demand determines prices

5. Other Economic Ideas Ricardo- iron law of wages – Wages are high, families have more children, but more children leads to lower wages Malthus- – War, famine, and disease check population growth – Feared the population would outpace the food supply. As long as the population increases, the poor suffer-the poor should have less children Utilitarianism-greatest good for the greatest number of people

6. Socialism Society or the government own means of production (land, raw materials, factories) and determine what to produce, how much, and for whom Wealth is equally distributed to the citizens Utopian socialism- self-sufficient communities where all property and work were shared – Robert Owen: “competition causes societies problems”-replace it with cooperation

7. The modern welfare state Government should intervene to improve peoples’ lives a state in which the welfare of the people in areas such as social security, health care, education, housing, and working conditions is the responsibility of the government Varies in degree depending on the country

8. Communism/Marxism Karl Marx Communist Manifesto Scientific basis for socialism Capitalism is evil and the proletariat is being exploited All history since surplus has been a history of class struggle between the “haves” and “have-nots” The group that controls the means of production is the “haves” and has the power in society Revolution is the only way to make the ruling class (bourgeoisie) give up control over production and the people would own everything Eventually the need for government would wither away Without private property social classes would wither away eventually

9. ACTIVITY: Identify if the statement represents Capitalism or communism? 1.It is better to have little to no government regulation of business 2.Laissez- faire 3.bourgeoisie owners get rich from the hard work of the proletariat and its not fair 4.supply and demand should set prices 5.a classless society where property and factories are owned by everyone collectively and profits are shared would be the ideal place to live

10. Capitalism or communism? 6.“everyone acting out of their own self- interest will add up to the common good” 7.“Society is divided into the haves and have nots- the haves wouldn’t be so rich if they didn’t exploit the poor” 8.Without profit, factories would be inefficient and wasteful 9.Private property creates class divisions 10.Private property and profits promote incentive and hard work

11. 1. What companies are represented to the left? 2. In a capitalist economy, who decides what to produce? 3. According to Adam Smith, what regulates the economy in a capitalist system?

12. 4.What would be a good title for this cartoon? 5. Whose economic ideology would this cartoon support? Why? 6. According to this cartoon, what are the effects of Industrialization and the factory system on the working class (proletariat)?

13. 7.According to this cartoon, what does the socialist feel is the “root” of all the evils in the world?

14. 8. According to this cartoon, what determines your social class? 9. Which group has the most power? 10. Which group is represented by “we eat for you”? 11. Which group is the foundation of society?