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New Ideas - Chapter 24:i -. Adam Smith “Father of Capitalism”. author of Wealth of Nations advocated a policy of laissez-faire (“leave them alone”) - let natural forces of supply & demand to operate (no government interference!) - sellers/buyers act in own self-interest

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New Ideas - Chapter 24:i -

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New Ideas- Chapter 24:i -

Adam Smith“Father of Capitalism”

  • author of Wealth of Nations

  • advocated a policy of laissez-faire (“leave them alone”)

    - let natural forces of supply & demand to operate (no government interference!)

    - sellers/buyers act in own self-interest

    - businesses compete to produce goods inexpensively (efficient producers will prosper, expand operations, hire more workers, etc.)

Thomas Malthus

  • author of An Essay on the Principle of Population (1798)

  • poverty, famine, and misery unavoidable

    - population increasing faster than food supply

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David Ricardo

  • “iron law of wages” – rapid population growth leads to:

    - fierce competition for jobs

    - lower wages

    - higher unemployment

    Continual poverty inevitable!

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The Birth of Economics,“the dismal science”

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Malthus &Ricardo

  • believed in laissez-faire

  • thought the poor could help themselves by working hard, saving earnings, and having fewer children

    How accurate were the forecasts of Malthus and Ricardo? (Be prepared to explain!)

Evangelicals and Reform

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William Wilberforce got the British Parliament to outlaw the slave trade in 1807, and slavery throughout the empire in 1833.

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Lord Shaftesbury promoted laws limiting working hours for women and children.

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Utilitarian Reformers

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British philosopher Jeremy Bentham believed society should work for “the greatest happiness forthe greatest number” of citizens.

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Laws should be judged by:

  • their usefulness;

  • whether they advance human happiness; and

  • reduced human misery

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Bentham’s follower, John Stuart Mill,called for the distribution of wealth more justly through taxing income.

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  • the belief that the means of production – capital, land, raw materials, and factories – should be owned and controlled by society, either directly or through governments

Robert Owen, a wealthy Welsh manufacturer, believed competition caused manyof society’s problems.

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Owen believed life would improve if cooperation replaced competition.

New Lanark, Scotland

Owen unsuccessfully attempted to apply his ideas in the United States in 1825.

Prussian philosopher Karl Marx dismissed the ideas of early socialists as impractical.

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Marx attempted to provide a scientific basis for socialism.

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Due to his radical views, Marx lived most of his life in exile.

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In 1844, Marx met Friedrich Engels, scion of a wealthy industrialist, in Paris.

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Marx and Engels became lifelong collaborators.

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Marx based his teachings on the German philosopher Hegel, who thought that the clash of ideas produced changes and new ideas (and new conflicts!).

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Hegel’s Triad

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Marx believed history advanced through conflict, and that economics was the major force for change.

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According to Marx, what emerged was a “class struggle” – the conflict between those who controlled production and those who did the work – which propelled history forward.

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Marx’s stages of economic life:

People produce what they need

1. Primitive

Advent of tools make surpluses possible (people became exploitable)

2. Slavery

3. Feudal

4. Capitalist

In Marx’s view, history was a struggle between the “haves” and “have-nots”.

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Marx believed the makers of goods – the proletariat – was the true productive class.

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The bourgeoisie, or middle class, exploited the proletariat by owning the means of production.

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“Let the ruling classes tremble at a Communist revolution. The proletarians have nothing to lose but their chains. They have a world to win. Working men of all countries, unite!”

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The Communist Manifesto (1848)

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Marx developed his ideas further in the work Das Kapital.

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What is the message of this political cartoon, and of the cartoons that follow?

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