Development of Capitalism during the Industrial Revolution Created by: Erika Arellano. Industrial Revolution refers to the greatly increased output of machine made goods Began in England in the 1700’s Why did it begin in England? It had natural resources such as:
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Development of Capitalism during the Industrial RevolutionCreated by: Erika Arellano
Industrial Revolution refers to the greatly increased output of machine made goods
Began in England in the 1700’s
Why did it begin in England? It had natural resources such as:
Water power and coal to fuel the new machines
Iron ore to construct machines, tools and buildings
Rivers for inland transportation
Harbors from which merchant ships set sail
Believed in free economy, or free markets
Wrote book The Wealth of Nations
Economic liberty guaranteed economic progress
Three Natural Laws of Economics:
Law of Self Interest: People work for their own good
Law of Supply and Demand: Enough goods will be produced at the lowest possible price to meet demand in a market economy
Law of Competition: Competition forces people to make a better product
Smiths ideas influenced Malthus and Ricardo
Believed that natural laws governed economic life
Opposed government efforts to help poor workers
Their ideas formed the foundation of laissez-faire capitalism:
Economic system in which the factors of production are privately owned and money is invested in business ventures to make a profit
Replaced feudal empires (i.e. Holy Roman Empire) and monarchies
Created markets where buyers and sellers of goods and services agreed on prices
Created market types:
Long distance trade increased dramatically due to innovation in transportation
Individuals and businesses own property and the mean of production.
Progress results when individuals follow their own self interest.
Businesses follow their own self interest by competing for the consumer’s money. Each business tried to produce goods or services that are better and less expensive then those of competitors.
Government should not interfere in the economy because competition create efficiency in business.
The connection is that it:
Led to investing in factories
Led to increased production and higher demands for raw materials
Led to world wide trade
Led to new inventions and new innovations
Led to changes in transportation, agriculture, and communication
English Parliament was firmly under the control of the capitalist classes.
Increase in agricultural production and turned the established rules of land ownership on their head.
Lands previously held in common by tenant farmers changed into large private farms, worked by a smaller labour force. This increased the agricultural production and caused the displaced peasants to head for the cities. Subsequently, there was an abundant labour supply to mine coal and iron, and man the factories.
The revolution moved economic power away from the aristocratic classes and into the hands of the new middle class, the bourgeoisie.