The Industrial Revolution

Chapter 25 – 4Reforming the Industrial World

Industrial Revolution widened the gap between rich and poor.

? Business and government – role in each

Workers demanded more rights and protection – formed labor unions.

Philosophers of Industrialization Laissez faire – economic policy of letting

owners of industry and business set working conditions without interference.

‘Let do’ French philosophers of Enlightenment

Government regulation interfere with production of wealth

Advocated free trade- flow of commerce in the world market without regulation

Adam Smith Defended idea of free economy Wealth of Nations Economic liberty guaranteed economic

progress 3 natural laws

Law of self interest - people work for their own benefit)

Law of competition – forces people to make a better product

Law of supply and demand – goods produced at lowest possible prices to meet demand

Economists of Capitalism Smith’s ideas supported by Malthus and

Ricardo Also believed natural laws governed

economic life Ideas foundation of laissez-faire capitalism Capitalism – economic system in which

factors of production are privately owned and money is invested to make a profit

These ideas helped bring about the Industrial Revolution

Malthus, Smith and Ricardo opposed government help for the poor Creating minimum wage jobs and

working conditions upset the free market system, lower profits and undermine production of wealth

Rise of Socialism Others believe government should

intervene – government must take action to improve people’s lives

Utilitarianism- Jeremy Bentham: ideas, institutions and actions should be evaluated on usefulness

Government should promote greatest good for greatest number of people

Policy only useful if met this end In general – individuals should pursue goals

without interference from state

John Stuart Mill – philosopher and economist: led utilitarian movement

Questioned unregulated capitalism Wanted to help ordinary people with

policies with more equitable division of profits

Favored cooperative system of agriculture and women’s rights

Utilitarians also pushed for reforms in legal systems, prison and education

Socialism Fourier and Saint-Simon suggested

socialism The factors of production are owned

by the public and operate for the benefit of all

Optimistic view of human nature Government should plan economy Government control would end

poverty and promote equality

Karl Marx

Marxism – radical type of socialism Communist Manifesto – middle class

haves (bourgeoisie) and workers or have nots – proletariat

Wealthy controlled means of producing goods, poor did labor

Industrial Revolution enriched the wealthy and impoverish the poor

Capitalist system would eventually destroy itself by: Factories would put artisans out of business Small number of manufacturers would control

wealth The workers – proletariat – would revolt, take

factories and mills, produce what society needed Workers would share in profits and bring about

economic equality for all

Workers would control government in a ‘dictatorship of the proletariat

A period of cooperative living and education would evolve into a classless society

Pure communism – form of complete socialism in which the means of production are owned by the people

Private property does not exist All goods and services are shared

equally Economic forces alone dominate

society

Time has shown that religion, nationalsim, ethnic loyalties and a desire for democratic reforms may be as strong influences as economic forces.

Labor Reform

Workers created and joined ‘unions’ Spoke for all the workers in a particular

trade Collective bargaining: Better

working conditions and higher pay Strike – refuse to work Skilled workers led the way Governments saw unions as a threat to

social order and stability

Reform Laws corrected abuses and child labor Women’s rights

Factory – higher wages than working at home

Earned less than men Movement for women’s rights

Abolition of slavery: Some were morally against Other economic threat

Reforms

Horace Mann – free public education