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INDUSTRIAL REVOLUTION

INDUSTRIAL REVOLUTION. New Ideas about Society and Economics. Adam Smith 1723–1790 . Adam Smith laid the intellectual framework for the concept of the free market. I. Laissez-faire economics. A. Adam Smith and free enterprise 1. Wrote Wealth of Nations

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INDUSTRIAL REVOLUTION

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  1. INDUSTRIAL REVOLUTION New Ideas about Society and Economics

  2. Adam Smith1723–1790 AdamSmith laid the intellectual framework for the concept of the free market.

  3. I. Laissez-faire economics A. Adam Smith and free enterprise 1. Wrote Wealth of Nations 2. Believed in natural law; business should operate without interference. 3. Free market would produce more goods at lower prices. 4. “Invisible hand” will guide the market. 5. Capitalists would reinvest in growing economy.

  4. Thomas Malthus 1766–1834 In An Essay on the Principle of Population (1798), Malthus predicted that the food supply would not meet the needs of the growing population.

  5. B. Thomas Malthus on population 1. Malthus holds a bleak view. 2. Population will outpace food supply. 3. Only checks on population growth are war, disease, and famine 4. Families should have fewer children to preserve the food supply. 5. No government intervention; improve life through hard work and limiting family size.

  6. David Ricardo 1772–1823 The “Iron Law of Wages”

  7. C. David Ricardo shares Malthus’ view. 1. Believed in Iron Law of Wages. 2. Wage increases are futile for the poor- increase would cause families to have more children, which will increase labor pool and drive down wages. 3. Opposed government help for the poor.

  8. Karl Marx 1818–1883 Philosopher, social scientist, historian and revolutionary, Karl Marx is regarded by many as the most influential economic and social thinker of the 19th century

  9. II. Socialist Thought Emerges • Focus should be on the good of society in general, not on individual rights. 1. Belief that socialism would end poverty and injustices of industrial capitalism. 2. People as a whole, not private individuals, should own and operate the means of production.

  10. B. Karl Marx explains class struggle 1. New theory of “scientific socialism” is based on scientific study of history. a. Inevitable struggle between social classes will lead to a classless society. b. A classless society would end struggles for wealth and power.

  11. C. Marxism in the Future 1. Marxism briefly flourishes, but never practiced in the form he predicted, not even in communist countries. a. In 1860, Germany adapts Marx’s beliefs to form social democracy. b. Marxism leads to Russian Revolution in 1917. c. Independence leaders elsewhere turn to Marxism.

  12. 2. Marxism loses appeal. a. Failures in Marxist governments illustrate its flaws. b. Nationalism wins out over working-class loyalty.

  13. SUMMARY Was the Industrial Revolution more beneficial or harmful?

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