New Ways of Thinking in the Industrial Revolution

The rise of Socialism

View Chapter 7, Section 4 (pages 260-265) and understand what YOUR economist believed was the IDEAL form of government and economics. What role should government play in their economic system, and why?Adam Smith ( p. 186)Thomas MalthusDavid RicardoJeremy BenthamKarl MarxSOCIAL DARWINISM (not Darwin's biology theories, but how they related to business!)

NOT EVERYONE was HAPPY with the changes the Industrial Revolution brought!

Neal Ludd and the "Luddites," or, what Mrs. Z will call her band someday

Adam Smith and "Laissez-Faire"Wrote, "The Wealth of Nations," 1776Scottish economist, Enlightenment-inspired"Invisible Hand" and competition/laissez-faire and free market

Modern CAPITALISM is credited to Smith!

Thomas Malthus

Bleak view of factory systemOnly checks on population growth were “nature’s natural methods” of war, disease, and famineViews proved WRONG!

David Ricardo

Another laissez-faire economistBelieved in the “Iron Law of Wages”Opposed any government help for the poorHard work and limiting size of families

Jeremy Bentham and Utilitarianism

Goal of society should be “greatest happiness for greatest number” of citizensLaws should be only if they are USEFULInfluenced John Stuart Mill, who wanted laws to protect workers

ANY “LOST” FANS IN THE HOUSE???

John Locke as "Jeremy Bentham"

Socialism

The people as a whole—NOT individuals—own the means of productionKarl Marx and Friedrich Engels, The Communist Manifesto 1848Communism: Creation of a classless society

Communism vs. Capitalism?

Communism Democratic Capitalism (USA)

Class struggle Proletariat vs. BourgeoisieVIOLENT REVOLUTION

Everyone is EQUAL, GUARANTEED MUST stay putNo tradeNo personal freedoms

Many social classes Class MOBILITY MUCH INEQUALITYNO guarantees!Able to have personal freedoms and choices

Different kinds of ECONOMIES EMERGE!

Market: buyers and sellers make the main decisions. Individuals exchange things! SUPPLY and DEMAND, SELF-INTEREST, and COMPETITION are main points. Laissez-faire, and virtually NO control by government. Freedom for consumers to purchase/create, but sometimes large gap between rich and poor.

Centrally Planned: Central government--NOT individuals!--makes key economic decisions. Also called a command economy, a socialist economy, or COMMUNISM. Government controls the MEANS OF PRODUCTION. Often results in poor quality goods and shortages.

Mixed Economy: both free enterprise AND socialist characteristics. Government controls the center of economic power. Most are democracies, but require a large amount of central planning to achieve economic equality. Most countries fall in this range today!

SOCIAL DARWINISM: or, how some tried to act like plants are TOTALLY the same thing as people

Charles Darwin: Theory of evolution, his 1859 book "On the Origin of Species" was related to his trip around the world by boat. Why did some species ADAPT? "Only the strong survive."

SOCIAL DARWINISTS attempt to apply this to people! This will take on a racist undertone as we approach the 20th century.