Economic Philosophies & the Industrial Revolution

1. Economic Philosophies & the Industrial Revolution • Progress increased gap between rich & poor • Some felt government should stay out of business & economic affairs • Others felt government should play an active role

2. Adam Smith • “Wealth of Nations” (1776) • Promoted Laissez Faire capitalism economics (Let do) • Capitalism- money is invested in business to make a profit • Business should operate w/ little or no govt. interference

3. David Malthus • An Essay on the Principle of population (1798) • Population will increase more rapidly than food supply • W/out wars or epidemics most would become poor & miserable

4. David Ricardo • Principles of Political Economy & Taxation (1817) • Permanent underclass would be poor • Wages would be forced down as population increased • Smith, Ricardo & Malthus were all against government involvement

5. The Rise of Socialism • Free market capitalism created social inequality • Government must take action to improve people’s lives • Concentrated on the interests of society rather than the individual • Farms & businesses should belong to all the people not individuals

6. Utilitarianism • Government actions are only useful if they promote the greatest good for the greatest amount of people • Promoted by Jeremy Bentham & John Stuart Mill

7. Utopian Socialism • Sought to create self- sufficient communities • All property & work would be shared • Since all wealth would be equal- fighting would end • Robert Owen

8. New Harmony Indiana

9. Marxist Socialism • “The Communist Manifesto” (1848) by Karl Marx & Friedrich Engels • Scientific Socialism • Ideas would inspire communist revolutions in China, Russia, & Cuba

10. Basic Ideas • History was a struggle between wealthy capitalist & working class • The Haves Vs. The Have Nots • Capitalist (Bourgeoisie) took advantage of the Proletariat (Working Class) • Proletariat would eventually rise up & overthrow capitalist society • A “dictatorship of the Proletariat” would rule

11. Means of production would be owned by the people • Wealth would be shared equally • Eventually government would wither away & a classless society would emerge • Marxismlost its appeal in 1800’s as working conditions improved

12. Unionization & Legislative Reform • Voluntary associations known as unions pushed for labor reforms in the 1800’s • Spoke for all workers in a particular trade • Engaged in collective bargaining • Negotiations between labor & management

13. If negotiations broke down members would strike • First Unions were skilled workers & benefited the middle class • At first Unions were outlawed • Combinations Act of 1799 & 1800 • Viewed as a threat to social order • After 1825 Unions were tolerated

14. Reform Laws • Factory Act of 1833-Minimum age & maximum hours for children • Mines Act of 1842- Women & children could not work underground • Ten Hours Act- limited the workday for women & children

15. Abolishment of Slavery- 1833 (Britain) • Morally wrong • Economic threat • Women’s rights movements grew • Free public schooling became available