Positives Adam Smith laissez faire let people do

Positives: ØAdam Smith- laissez faire (let people do as they please) Wealth of Nations: economy will prosper without government interference ØPrivately owned business. ØMarket System: Many workers & abundant resources = cheap labor & resources Few workers & scarce resources = expensive labor & resources ØEntrepreneurs are rewarded for their risks. ØGoods are improved, competition breeds better products at lower costs. ØAnyone can become rich!

Negatives: Social Darwinism- survival of the fittest used for society. Wealth of one built on the backs of many. Gap between the rich and poor grows wider.

Socialism- the means of production (land, capital, raw materials and factories) should be owned and controlled by society. Wrote book, Communist Manifesto Communism- Karl Marx: Believed there is a constant struggle between the “haves” and the “have-nots. ” “Workingmen of all countries, unite. ” Workers (proletariat) were the productive class. He wanted the people to own everything, no private property, no classes. The idea is that “from each according to his ability, to each according to his need. ”

Capitalism Socialism Individual/Businesses own property Community or state owns property Progress = when individuals follow their own self-interest Progress = when a community cooperates for the good of all Businesses compete for consumer’s money by producing goods/services that are better and less expensive Capitalist employers take advantage of workers. Community must act to protect them Consumers compete to buy Unequal distribution of wealth the best goods at lowest prices and material goods is created; should be according to each person’s needs Government should NOT interfere in the economy Unequal distribution of wealth and materials is unfair; better to distribute based on need

LABOR UNIONS AND REFORM LAWS Unions: Voluntary labor associations Collective Bargaining: negotiations between workers and employers to better working conditions and increase pay Strike: refusing to work until changes are made (originally illegal) Reform Laws: Political leaders looked into abuses of IR Child Labor Laws Working Conditions in Factories and Mines Lead to: Abolition of Slavery Fight for Women’s Rights Public Education Prison Reform D E M O C R A C Y continued to grow

1. Land- Natural resources. 2. Capital- Money to start the business. 3. Labor- Workers (Displaced farmers, increased population) Entrepreneurs- Risk takers, people with the idea, capital and the guts to take the risk. Business Organizations 1. Sole proprietorship- one person owns the business. 2. Partnership- 2 people own the business. 3. Corporation- Shareholders own the business (stocks). They share in profits but are not responsible personally for debt.

Industrial Revolution I. Negative Changes A. Child labor B. Unsafe Working conditions C. Overpopulated cities (from thousands to millions. ) 1. Unsanitary living conditions a. Disease b. Rats, filth c. Poor living conditions d. People living in slums D. Environment 1. Depleting natural resources 2. Polluting water supply E. Growing gap between the rich and the poor

II. Positive Changes A. Labor laws 1. Limiting working hours, age and safety B. Collective Bargaining 1. Labor unions a. Striking for improvements b. Better working conditions c. Better pay C. Growing Middle class 1. New wealth, better standard of living D. New Tax Revenue 1. Public education 2. Improved infrastructure (police, sanitation, etc. )

III. Capitalism vs. Socialism A. Adam Smith- Laissez Faire, Capitalism B. Karl Marx- Communism, Socialism 1. Constant struggle between rich and poor. 2. “Haves” Bourgeosie and “Have Nots” Proletariat 3. “The proletarians have nothing to lose but their chains. They have a world to win. “Workingmen of all countries, unite. ”