2. Changing the Industrial World Why did Capitalism cause reform movements?

3. Laissez-Faire Economics/Capitalism Laissez-Faire Economics/Capitalism Laissez-Faire is an economic philosophy that favored letting owners set working conditions without interference from the government British economist Adam Smith defended Laissez-Faire in his book The Wealth of Nations Adam Smith Capitalist Smith argued a free-market, with private ownership & no govt regulation would create competition, causing better products & wages Prices would be regulated by supply & demand Smith’s ideas become known as capitalism Many argue unregulated capitalism will not protect workers & encourages greed Rich Owners Poor workers

4. Utilitarianism First group to question Smith’s Capitalism were Utilitarians Founded by Jeremy Bentham, they argued that people should judge ideas on its utility or usefulness, so it benefits the majority Utilitarians say Capitalism did not benefit the greatest number of people and govt should regulate it 1800s: John Stuart Mill now takes over Utilitarian movement John Stuart Mill Mill blames unregulated capitalism for the fact workers were in poverty & overall bad working conditions To fix the problem, Mill felt the government should create an equal division of profits Mill also favored Women’s rights, and reforms in education & the prison system

5. Utopianism British factory owner Robert Owen was shocked by the misery and poverty of the working class Owen built houses near his factory in Scotland and rented them out to his workers for low rates Owen prohibited children under 10 from working in the factories and provided free schooling 1824: Owen traveled to the US and tried to set up a Utopian system in Indiana Robert Owen Utopian New Harmony, Indiana only lasted for three years but did inspire better communities for workers