Economics in the 19 th Century

1. Economicsin the 19th Century Marxism Booms and Busts “Sell a man a fish, he eats for a day, teach a man how to fish, you ruin a wonderful business opportunity.” -Karl Marx

2. Industry 1st Industrial Rev’l was circa 1760-1830 2nd was late 19th-early 20th centuries • 1st (& 2nd) Industrial revolution brought about: • Huge amounts of wealth • Growing middle class • Technological advances • More food & greater availability • More leisure time (as reform bills passed) • Sports & Consumerism

3. Factory system & the plight of the worker • Laws that catered to bourgeoisie • Urbanization & all its problems (Manchester DBQ) • Widening gap between rich & poor • Need for more resources

4. Socialism • Response to growing class of industrial workers • Poor conditions • Rich-poor gap • Varied in approach • Utopian Socialism • Christian Socialism • Scientific Socialism (Marxism) • Fabians & Revisionists

5. Karl Marx & Frederick Engels Frederick Engels: German middle-class: focused on exploitation of the worker by the capitalist class “I charge the English middle classes with mass murder, wholesale robbery, and all the other crimes in the calendar.” (1844, The Condition of the Working Class in England

6. Karl Marx: Son of Jewish Lawyer who converted to Christianity: Karl was atheistic: Studied philosophy, journalism, and economics “Religion is the sigh of the oppressed creature, the heart of a heartless world, and the soul of soulless conditions. It is the opium of the people.” “Just as woman passes from marriage to general prostitution…”

7. Communist Manifesto 1848 • Materialistic view of society: humans defined by their labor, not their souls • Labor was struggle to produce • All Society divided into 2 groups: • Those who own property (Bourgeoisie, or Capitalist Class) • Those who do not (Proletariat, or Laborer)

8. History goes through stages • Feudal: Aristocracy versus Serf • Industrial: Bourgeoisie versus Proletariat [Influenced by Georg Hegel’s idea of historical evolution] • All of history is a struggle among social classes “The history of all previous societies has been the history of class struggles.”

9. Workers are • Exploited by Capitalist class • Alienated from the fruits of their labor (their creation as it were) • Fruits of labor is what makes us human “In a word, for exploitation, veiled by religious and political illusions, the bourgeoisie had substituted naked, shameless, direct brutal exploitation.”

10. In time, • Capitalist class owns more but grows smaller in numbers • Proletariat owns less and grows in numbers • The last stage of history is now… “Democracy is the road to socialism.”

11. A bloody revolution will break out as the proletariat rises against those who exploit them “Let the ruling classes tremble at a communist revolution. The proletarians have nothing to lose but their chains. They have a world to win. Workingmen of all countries, unite!”

12. The New Communist Society • A temporary government, the Communist Party, will arise from the proletariat • Wealth will be redistributed • People will live communally “From each according to his abilities, to each according to his needs.” • No more social classes!

13. Back to Reality!!!Western Business/Capitalism • Larger capital needed for business expenditures • No longer is a ‘bust’ a small affair affecting only small groups of people! • Booms and Busts create havoc • Desire to regulate economic fluctuations growing

14. Response to Booms and Busts • Cartels formed in Europe • In Britain, firms mainly in private hands • Rest of Europe had government directly involved • Monopolies in America • Cartels & Monopolies regulate production levels and prices • Tariffs and protectionism used by everyone but England • England stood by free trade

15. Banks grow in size and their role increased immensely • Capitalists began looking to government for intervention to help correct ups and downs of economy • Loss of strict laissez-faire • Regulation increased