Industrial Revolution Part II

Capitalism: The good, bad and ugly

Growth of Cities

Labor vs Management

Social Changes and Reforms

Socialism, Scientists,

ECONOMICS 101

Some Aspects of CapitalismCompetition in businessMass production

Assembly line practices Make stuff faster, cheaper, more efficiently Does not require skilled labor

Corporations Businesses you can by stock in More $ invested, bigger company gets, more $ it earns,

which draws in more investors

More Capitalism IdeasLaw of Supply and demand

High demand and Low supply = high prices Low demand and High supply = low prices

Law of Competition Most efficient survive

Laissez Faire is the accepted policy

Economists of the Industrial Revolution – page 510

Adam Smith: advocated laissez- faire economics. “Hands off” No government regulation of business.

Good points? Bad Points?

Economic Theories Adam Smith –”The Wealth of Nations” Laissez Faire Capitalism is GOOD for the

country. “greed is good” – industrialists should not be

restricted from making $. “A free market will produce more goods at lower

prices, making them affordable by everyone”. The basis of Capitalism

More $ = more jobs = better economy = stronger country

More Definitions Monopoly

One person or business owns all means of production, distribution and sales

No competition Can charge whatever they want

Cartels Small groups of businessmen who control the

market on certain goods OPEC – (Organization of Petroleum Exporting

Companies) is a modern example

Last Definition – I promiseBusiness Cycles

Natural rise and fall of businesses`

0

20

40

60

80

100

Economic Theories II Thomas Malthus

First proposed the population bomb idea Humans are like a virus. We multiply faster than food rate,

leading to cycles of disaster Governments trying to help people will just make this worse

David Ricardo Iron Law of Wages

Less people = Higher wages more people having kids More people = lower wages people having fewer kids less people the whole process starting all over again

Urbanization In the mid 1700s, more than half the population

of Britain lived and worked on farms. Between 1750 and 1851, displaced farming

families moved to the cities to work in the new factories.

Urban Living Conditions

Factory owners rushed to build housing

Back to back row houses

Several families often share very small houses

Poor sanitation High disease rates Crime Massive pollution

Housing Conditions

Urban Living Conditions

CITY GENTRY

(Wealthy)

TRADESPEOPLE

(Skilled workers)

LABORERS

(Unskilled workers)

Rutland 52 41 38

Truro 40 33 28

Derby 49 38 21

Manchester 38 20 17

Bethnal Green

45 26 16

Liverpool 35 22 15

Average Age at Death for Different Classes

Rutland – agricultural area in central EnglandTruro – tin mining centerOther locations – major industrial centers

Working Conditions and Wages

Common working day: 12 – 14 hours; 6 days a week.

One short break for lunch Workers were beaten if

they did not perform well. Hot, polluted factory air. Workers risked losing

limbs from the machines. Low wages.

Child Labor Children shifted from

farm work to factory work.

12 – 14 hour days 6 day weeks Lower wages than adults. Began at age 5. Mining work deformed

bodies.

Child Labor As concerns about the

welfare of children rose in mid 1800s, Parliament held investigations into working conditions.

New laws and new labor unions improved conditions.

Government was initially on the side of business owners

WHY?

“Combination Acts” outlaws unions

Reformers Jeremy Bentham: utilitarianism –

“greatest happiness for the greatest number.”

John Stuart Mill: government should help the poor and give the

vote to workers and women.

Robert Owen: Built a factory based on the idea that an

employer could offer decent living and working conditions and still make a profit.

Rise of Unions Working conditions in early – mid 1800s very

poor Child labor, low pay, no time off, get hurt get fired

etc Jeremy Bentham and John Mill call for better

treatment, working conditions, democracy (mid 1800s)

Unions IIUnions of workers allow better

bargaining position Use strikes to threaten owners Gain better pay, shorter hours

Role of Government Govt Steps in and plays its “wildcard”

Factory Act –limits work hours for kids See your book

Mines Act – no females in mines Boys must be at least 13 to work mines

Combination Acts Repealed Unions now legal.

Economic Theories III Socialism

“Tax the Rich to give to the poor.” “From each according to his ability to each according to

his need”

Utopian Socialists Co-op type of businesses.

Workers own the business Live in worker owned and run towns where everyone

works for common good of all – not to make more $.

Marx and Engles Karl Marx & Friedrich Engels

“Communist Manifesto” and “Das Kapital” Life is constant struggle between

HAVES (Bourgeoisie) : Upper class, owners, rich and HAVE NOTS (Proletariat): workers, lower

class, poor, labor According to Marx, total radical societal

transformation is inevitable

Marx and Engels II Steps to a perfect world

1. Begin with capitalism 1. Encourages industry,

innovation etc

2. But it exploits the many for the benefit of the few

1. Leads to poverty and inequality

2. Workers will continue to be exploited until they finally revolt. (may be violent)

Steps to a perfect world cont.3 Workers take over and set up Socialist govt.

Rules with iron hand until people accept the idea of sharing everything

4 Govt eventually withers away as people work for the common good, not for themselves

5 Establishment of a classless society, everyone is equal, all are happy.

The Smurf Commune

One little problem…. IT DOESN’T WORK!!!! If there is no incentive to work (I.e.

making money) then people WON’T work.

This would be a good time to talk about “Animal Farm”

The price of progress:

Much easier life. More “stuff.” More convenience

“Faster, Cheaper, Better”

Massive pollution due to the Industrial Revolution.

“Global Warming?”

Plenty to clean up and fix

Wrap UP

China: 2009Look familiar?

Indus. RevContinues

Today

• New inventions and development of factories

• Rapidly growing industry in the 1800s

• Increased production and higher demand for raw materials

• Growth of worldwide trade

• Population explosion and a large labor force

• Exploitation of mineral resources

• Highly developed banking and investment system

• Advances in transportation, agriculture, and communication

Economic Effects

• Child labor laws to end abuses

• Reformers urging equal distribution of wealth (i.e. Karl Marx)

• Trade unions

• Social reform movements, such as utilitarianism, utopianism, socialism, and Marxism

• Reform bills in Parliament

Political Effects

The Industrial Revolution

• Long hours worked by children in factories

• Increase in population of cities

• Poor city planning • Loss of family

stability • Expansion of middle

class• Harsh conditions for

laborers• Workers’ progress

vs. laissez-faire economic attitudes

• Improved standard of living

• Creation of new jobs• Encouragement of

technological progress

Social Effects