Reforming the Industrial World Chapter 25 Section 4

Reforming the Industrial World Chapter 25 Section 4

Philosophies of Industrialization n Laissez Faire (lehs-ay-FAIR) n n Economic policy of letting owners of industry to set working conditions without interference of government. Term is French for “let do” Leave business alone! From the Enlightenment: Government put’s burden on business and interferes with businesses’ profits

Adam Smith n Wrote “The Wealth of Nations” (1776) n n n Defended a Free Economy Liberty guaranteed economic ($) progress Created 3 Natural Laws of Economics n n n Law of Self-Interest Law of Competition Law of Supply and Demand

Adam Smith – Father of Capitalism n n n Economic system in which the factors of production are privately owned and money is invested in business ventures to make a profit ($) Think of it as an “INVISIBLE HAND GUIDING THE MARKET (ECONOMY)”

Cow Metaphor - Capitalism n You have two cows. You sell one and buy a bull.

Socialism n Founder n n Definition n n Charles Fourier Saint-Simon Factors of production are owned by the government Goal n n End poverty and promote equality Plan your community vs. Freedom of choice

Cow Metaphor - Socialism n You have two cows. You keep one and give one to your neighbor.

Marxism n Founders: n n n Karl Marx & Frederick Engles Wrote theory in the book “Communist Manifesto” Theory: n n n Have’s – Bourgeoisies (Oppressor) Have Not’s - Proletariats (Oppressed) Proletariats will always overthrow the Bourgeoisies and then they become the new bourgeoisies.

Communism Final Phase of Marxism – Communism n Definition n All factors of production are owned by ALL Never seen a “pure” form of communism n n Ruled by dictators that run their economy for their own profit. Countries that are communist today: China, Cuba, North Korea, Vietnam

Cow Metaphor - Communism n You have two cows. The government takes them both and provides you with milk.

Utilitarianism n Founder: n n Definition: n n Jeremy Bentham Judge ideas, institutions, & actions based on utility or usefulness Goal: n Work for policies that lead to more equal division of profits ($)