Reforming the industrial World
Philosophers
Adam Smith
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Laissez-faire Economics
French economic
philosophers
Believed that government
should not interfere with
business and the economy
would prosper.
Smith believed economic
liberty guaranteed
economic progress.
Smith’s Arguments
3 Natural Laws of Economics
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1. The law of self interest
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2. The law of competition
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People work for their own good
Competition forces people to make a better product
3. The law of supply and demand
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Enough goods would be produced at the lowest possible price
to meet demand in a market economy
Smith’s Ideas
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Supported by British economists Thomas Malthus and
David Ricardo
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Formation of laissez-faire capitalism
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What is Capitalism?
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An economic system in which the factors of production
are privately owned and money is invested in business
ventures to make a profit
Malthus Argument
Thomas malthus
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Wrote An Essay on the
Principle of Population
Population has a tendency
to increase more quickly
than the available food
supply.
Without wars, disease and
epidemics most people
would be poor
Ricardo Argument
David ricardo
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Pinciples of Political Economy
& Taxation
Poor will continue to be
poor
Believed in a market
system
Wages would be lower as
population increases
Rise of Socialism
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Jeremy Bentham took
Smith’s ideas and
modified it
Utilitarianism
Govt. should promote
the greatest good for
the greatest number of
people.
Govt. was only good if
they promoted this goal
John Stuart Mill
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Led Utilitarianism
movement in 1800’s
Workers should not live
deprived lives
Favored –
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Cooperative system of
agriculture
Women’s rights
Reform in education and
prison system
Rise of Socialism
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To offset the problems of industrialization with a new
system (Socialism)
Government should plan the economy rather than focus
on the free market system
Government controls
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Factories
Railroads
Industry
Mines
Karl Marx (1818-1883)
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German journalist
introduced Marxism
Wrote the The
Communist Manifesto
Argued that human have
been divided into
warring classes
Bourgeoisie
Proletariat
Enriched the wealthy &
impoverished the poor
Marx on the Future
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Capitalism would
destroy itself
Proletariat would revolt
Seize control of
factories from capitalist
Produce only what
society needs
Economic equality for all
people
Future Continued
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The workers would share the profits
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After a period of cooperative living and education, the
government would go away as a classless society
developed
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Last phase was called Communism
The Communist Manifesto
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Produced few very little
results
Uprisings began to
occur in Europe
After the turn of the
century did the
pamphlet create major
results
Inspired Lenin, Mao
Zedong and Fidel
Castro
Labor Unions
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Unions spoke for all
workers
Collective Bargaining
Union members could
strike if demands were
not met
Led by skilled workers
Unions struggled to form
due to govt.
Great Britain Unions
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Britain saw unions as a threat to social order and stability
Combination Act 1799 outlawed people to join unions
People ignored Act
British Parliament revoked the act in 1824
Goals to raise wages and improve working conditions
United States
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Unions were around since
the early 1800’s
AFL (American Federation
of Labor) is formed 1886
Successful strikes
produced gains in
members wages and
shorter hours
New Types of Reform Laws
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Parliament begins to investigate child labor and working
conditions
Parliament passed the Factory Act 1833
Parliament passed the Mines Act 1842
Parliament passed the Ten Hours Act 1847
In the U.S. organization of the National Child Labor
Committee
1919 U.S. Supreme Court objected to federal child
labor law (state rights)
Individual States could regulate working hours
Abolition of Slavery
England
William Wilberforce led the
fight for abolition
United States
Slavery ended at the end of
the Civil War
Puerto Rico ended 1873
Cuba ended in 1886
Brazil in 1888
Women’s Rights
Britain
 Women served as
inspectors were other
women worked
United States
 Educated women ran
settlement houses
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Jane Addams
Wanted their own rights
Other Reforms
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Public Education led by Horace Mann in the United States
Educate children to be good citizens and knowledgeable
Prison Reform in 1831
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American prisons were seen as brutal conditions
New goal to provide prisoners with skills and traits to be
useful in society when released