Positives:  Adam Smith- laissez faire Privately owned business.

Positives:
Adam Smith- laissez faire (let people do as they please)
Wealth of Nations: economy will prosper without government interference
Privately owned business.
Market System:
Many workers & abundant resources = cheap labor & resources
Few workers & scarce resources = expensive labor & resources
Entrepreneurs are rewarded for their risks.
Goods are improved, competition breeds better products
at lower costs.
Anyone 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
the best goods at lowest
prices
Unequal distribution of wealth
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.”