At Level

Taking Notesnew ideas about economics; entrepreneurs

built fortunes; new industries developed;

lives of women changed; migration of job

seekers from countryside to city; cities

became crowded and dangerous; pollution

of air and water; population grew rapidly;

standard of living in industrialized countries

improved; Great Britain, France, and

Germany emerged as global leaders; United

States benefited from industrialization

Online Resources

go.hrw.com

KEYWORD: SHL IND

ACTIVITY: Historic Origins

of Socialism and Capitalism

Academic Vocabulary

Review with students the high-use academic

term in this section.

stance attitude or position (p. 648)

CRF: Vocabulary Builder: Section 3

248 CHAPTER 7

Getting StartedInteractive Reader and Study Guide

Interactive Reader and Study Guide,

Section 3

Teach the Main Idea

Results of the Industrial Revolution

1. Teach

2. Apply

3. Review

4. Practice/Homework

Visual-Spatial, Verbal-Linguistic

Alternative Assessment Handbook, Rubric 37:

Writing Assignments

Take notes on the new

ideas of the Industrial Revolution.

New Ideas

248

New Ideas in aNew Society

BEFORE YOU READ

grandeur does not consist in one thing, but in the unique

assemblage of all things.” Brontë was impressed by the

wide range of exhibits, including “great compartments

filled with railway engines and boilers, with mill machin-

ery in full work . . .” All these remarkable exhibits showed

the accomplishments of the Industrial Revolution. People

came from far away to gawk at those achievements. In fact,

some 6 million visitors from across Europe and elsewhere

attended the exhibition.

What marvels of industry were displayed in a glass palace? In

1851 the Great Exhibition in London

drew residents and visitors to a huge glass and iron build-

ing called the Crystal Palace. Inside the marvelous structure

were nearly 14,000 exhibits, many of which displayed

industrial products and processes. English writer Charlotte

Brontë was dazzled by the exhibition: “It is a wonderful

place—vast, strange, new, and impossible to describe. Its

Visitors crowded into the Crystal Palace

to view the displays.

3SECTION

MAIN IDEA

The Industrial Revolution inspired new ideas about economics and affected society in many ways.

READING FOCUS

1. What new ideas about economics developed during the Industrial Revolution?

2. What competing economic ideas arose as a result?

3. How did the Industrial Revolution affect society?

KEY TERMS AND PEOPLE

laissez-faire Adam SmithThomas MalthusentrepreneurAndrew CarnegiesocialismKarl Marxcommunismstandard of living

A PALACE FOR

INDUSTRY

New Ideas about Economics

During the late 1700s and early 1800s indus-

trialization was changing not just products

and work, but also how people thought about

economics. One change was that mercantilism

was giving way to capitalism and competition.

Capitalism and Competition Under the

old mercantile system, governments restricted

trade to protect their own industries from for-

eign competition. Then, starting in the late

1700s, some people said that governments

should not interfere in business. This idea is

called laissez-faire (lehz-ay-FEHR) economics,

from a French phrase meaning “free to do.”

Dickinsons’ Pictures of Great Exhibition, 1851

Academic Vocabulary

Review with students the high-use academic

term in this section.

stance attitude or position (p. 250)

CRF: Vocabulary Builder: Section 3

Name _____________________________ Class _________________ Date __________________

The Industrial Revolution

Section 3

Original content Copyright © by Holt, Rinehart and Winston. Additions and changes to the original content are the responsibility of the instructor.

Modern Era Chapter 7 83 Interactive Reader and Study Guide

Key Terms and People

laissez-faire the idea that governments should not interfere in business

Adam Smith the leading advocate of laissez-faire economics

Thomas Malthus thinker whose beliefs about poverty were used to justify low wages

entrepreneur someone who starts a business

Andrew Carnegie industrialist who led the expansion of the American steel industry

socialism the theory that society, not individuals, should own all property and industry

Karl Marx German thinker who put forth a radical view of socialism

communism a system in which the government controls the economy

standard of living level of material comfort experienced by a group of people

Taking Notes As you read the summary, use the chart below to show results of the

Industrial Revolution. Add ovals as needed.

MAIN IDEA The Industrial Revolution inspired new ideas about economics and affected

society in many ways.

Differentiating Instruction Below Level

249

What new ideas about economics

developed during the Industrial

Revolution? laissez-faire economics,

The Wealth of Nations, increased role

of entrepreneur

New Ideas about Economics

Describe The Wealth of

Nations analyzes wealth and

how it is created; states that markets

free from regulation would benefit all

Make Inferences

Poverty would never go away,

so there was no reason to combat it

with higher wages.

Make Generalizations

took away influ-

ence of landowners, pooled money to

create corporations, used tough business

practices, acquired enormous wealth

Primary Source

North American Review

Primary Source

The Communist Manifesto

AnswersReading Like a Historian 1. His

traditional Scottish clothing indicates he

was pro Scottish. 2. possible answer—

thought Carnegie was too generous

because artist shows him throwing money

1.

New Industrialists

Who were

they?

What did they

do (positive)?

What did they

do (negative)?

Carnegie,

Rockefeller,

Vanderbilt

built large

businesses,

gave to charity

drove com-

petitors out

of business,

did not allow

unions

2.

Visual-Spatial

Alternative Assessment Handbook, Rubric 13:

Graphic Organizers

Learners Having Difficulty

Reading Focus

PRIMARY SOURCES

THE INDUSTRIAL REVOLUTION 249

Adam Smith became the leading advocate of

laissez-faire economics. In 1776 he published

The Wealth of Nations, in which he analyzed the

definition and creation of wealth. Smith wrote

that markets free from government interfer-

ence benefited all. Such an economic system

free from regulation is called a market econ-

omy. Also in a market economy, businesses can

compete freely against each other for trade. The

British government agreed with Smith’s ideas

and ended most regulations by the 1840s.

Smith influenced Thomas Malthus, who was

concerned about population growth caused by

the development of industry. Malthus wrote

that the population would always grow faster

than food production. Therefore, he concluded,

poverty and misery would never go away. Pop-

ulation growth, Malthus said, was slowed only

by war, disease, famine, and decreased repro-

duction. Because many people agreed that

these problems were unavoidable, Malthus’

ideas were used to justify low wages and laws

that limited charity to the poor.

In time, Malthus was proved wrong. The

disasters he predicted did not happen, but the

population did grow. Still, the ideas of Smith

and Malthus affected attitudes. As Smith pre-

dicted, industrialization succeeded and spread.

Industrial capitalism emerged as the main eco-

nomic pattern in the Western world.

New Roles for Business Leaders In-

dustrialization also changed the roles that

business leaders played in public life. Before

the Industrial Revolution, people who owned

land controlled the wealth and power. But by

the mid-1800s, the leaders of industry began

taking away the landowners’ influence. Some

industrialists became extremely wealthy, and

their new wealth bought them political power.

The Industrial Revolution also highlighted

the role of the entrepreneur, someone who

starts a new business. Among the entrepre-

neurs were financiers, bankers, and investors

who pooled their money to create large cor-

porations. As demand increased for capital to

build factories, banking and finance became

more important occupations. Some industri-

alists made fortunes simply by buying and

selling companies for a profit.

A few industrialists, mainly in the United

States, built some of the largest corporate

empires ever seen—and acquired wealth that

few people could imagine. In the late 1800s,

their stories helped make them famous.

Andrew Carnegie, who was born in Scotland,

was an example of “rags to riches” success. His

father, a weaver, was driven out of work by the

textile mills. The family moved to America, and

Carnegie started working in a mill at age 12.

With hard work, creativity, intelligence, and

tough business practices, he led the expansion

of the American steel industry.

Andrew Carnegie, who took the steel industry to new heights,

gave away some $350 million to fund various charities. This

cartoon from Punch, a satirical British magazine, shows Carn-

egie giving $2 million to Scottish universities. The original

title is “The MacMillion.”

A View of Andrew Carnegie

1. Analyze What might Carnegie’s clothing have meant to people at the time?

2. Evaluate How do you think the artist felt about Carnegie’s donation? Explain your answer.

See Skills Handbook, p. H25

SkillsFOCUS READING LIKE A HISTORIAN

The mortarboards, which are the headgear for college graduates, are labeled with the names of Scottish universities.

Carnegie’s clothing is a combination of the traditional Scottish kilt and the American flag.

Pu

nch

, Ma

y 2

9, 1

90

1

Skills Focus: Drawing Conclusions Above Level

Reading Skill

Economic Issues of the Industrial Revolution

250

What competing economic ideas arose

as a result? socialism, communism

Competing Economic Views

Contrast

Under capitalism,

individuals own property and control

industry, whereas under socialism, the

government or society does.

Interpret

em-

phasis on good of all, good work-

ing conditions, nonprofit stores, free

schooling, strict rules

Predict

possible answer—economic failure,

conflicts within community

Info to KnowRobert Owen

AnswersPrimary Sources 1. high wages cause

population to increase, laborers increase,

wages fall; 2. possible answer—Yes, he

writes about the workers’ happiness,

health, and “enjoyments of life.”

Reading Check mercantilism gave

way to capitalism and competition,

laissez-faire economics and The Wealth

of Nations allowed for increased role of

entrepeneur

Background: 1.

2.

3.

Interpersonal, Verbal-

Linguistic

Alternative Assessment Handbook, Rubrics 11:

Discussions; and 14: Group Activity

Reading Focus

250 CHAPTER 7

Other industrialists achieved similar feats.

Examples include Cornelius Vanderbilt in rail-

roads and John D. Rockefeller in oil. These men

built giant corporations that drove out their

competitors. They were both admired for their

contributions to human progress and criticized

for their treatment of workers. For example,

they were generally against their employees’

joining labor unions. Although some, like

Andrew Carnegie, gave generously to char-

ity, people who disapproved of their methods

sometimes called them “robber barons.”

Summarize What were some

of the new ideas about economics?

Competing Economic ViewsNot everyone agreed that laissez-faire capital-

ism was a good thing. Some thinkers blamed

capitalism for bad working conditions and big

gaps between the rich and poor. They took a

different stance on economic sytems. Two of

these men were Robert Owen and Karl Marx.

Robert Owen In contrast to the gloomy

views of Thomas Malthus, Robert Owen had a

more hopeful view of how industry might affect

ACADEMIC VOCABULARY

stance attitude or position

ACADEMIC VOCABULARY

stance attitude or position

people. He thought that for the good of all, soci-

ety or the government, instead of individuals,

should own property and control industry—a

theory called socialism. The theory was a clear

contrast to capitalism.

To demonstrate his ideas, Owen built a

mill complex at New Lanark, Scotland, that

gained widespread praise as a model industrial

town. The workers there enjoyed good work-

ing conditions, shopped at nonprofit stores,

lived in decent houses, and could earn sick pay.

Because he felt that education improved char-

acter, Owen even provided free schooling for

the workers’ children. He also imposed strict

rules on workers’ personal lives, including cur-

fews and bathing requirements.

Owen brought his ideas to the United States

in 1825, when he founded a community called

New Harmony in Indiana. New Harmony was

to be a utopia, an ideal community where pov-

erty and other evils of society did not exist. The

belief that such communities can solve society’s

problems is called utopianism.

The efforts of Owen and other people who

believed in socialism led to a movement called

social democracy. Those who advocated social

democracy wanted to move from capitalism to

socialism by democratic means.

The Iron Law of Wages

PRIMARY SOURCES

The ideas of Adam Smith and Thomas Mal-

thus had many admirers. Among them was

David Ricardo (1772–1823), an English

banker. In an 1817 work, Ricardo argued

that natural economic forces would keep

wages low—so low that workers barely had

enough to survive. Ricardo’s theory came to

be called The Iron Law of Wages, indicating

that the “law” was real and unchangeable.

The theory was popular with factory owners,

since it justified their paying low wages to

their employees.

“It is when the market price of labour exceeds its

natural price that the condition of the labourer is

flourishing and happy, that he has it in his power

1. Sequence According to Ricardo, what is the sequence of the rise and fall of wages?

2. Draw Conclusions Do you think Ricardo felt some sympathy with workers? Why or why not?

See Skills Handbook, p. H25

SkillsFOCUS READING LIKE A HISTORIAN

Like Malthus, Ricardo predicted a rise in population. According to Ricardo, what encourages population growth?

to command a greater proportion of the neces-

saries and enjoyments of life, and therefore to

rear a healthy and numerous family. When, how-

ever, by the encouragement which high wages

give to the increase of population, the number of

labourers is increased, wages again fall to their

natural price, and indeed from a reaction some-

times fall below it.”

—David Ricardo, On Wages, 1817

Skills Focus: Making Oral Presentations At Level

251

Competing Economic Views

Summarize

More workers would

sink into poverty; workers would

rebel, take over means of production,

and then govern themselves.

Elaborate

possible answer—thought government

should control economy

Reading Focus

How did the Industrial Revolution affect

society? growth of new industries,

working class women in factories and

other jobs, migration of job-seekers to

cities, pollution, some countries became

powerful, increased standard of living

Effects on Society

Explain

separate spheres—

women stayed home, men worked in

factories; women expected to teach

morals at home

Make Inferences

possible

answer—were still performing low-

skilled work

Quick Facts Transparency: Effects of

Industrialization on Women

AnswersReading Check Socialists blamed

capitalism for harsh working conditions,

polluted cities, and the big gaps between

rich and poor.

1.

2.

3.

4.

Kinesthetic, Verbal-Linguistic

Alternative Assessment Handbook, Rubric 14:

Group Activity

Reading Like a Historian Skill

Women of Different Social Classes

Reading Focus

THE INDUSTRIAL REVOLUTION 251

Karl Marx A more radical view of socialism

was put forth by two Germans, Friedrich Engels

and Karl Marx. They declared that as capital-

ism grew, more and more workers would sink

into poverty. In time they would rebel, seize

control of the “means of production”—such as

factories and farms—and govern themselves.

Capitalism would collapse. Workers would

establish a society based on cooperation and

equal distribution of wealth. Such a revolution

was inevitable, the authors claimed.

In time, Marx would be better known than

Engels. In 1867 Marx produced the first vol-

ume of Das Kapital. In this three-part work,

he put forth his arguments against capitalism.

One of its evils, Marx said, was how capitalism

disrupts the relationship between labor and

profit. He thought there should be a direct con-

nection between one’s work and one’s pay. For

example, he thought it was not fair that one

worker could toil all day at back-breaking labor

and make very little money while another per-

son got rich doing nothing more than sitting in

an office speculating on future markets.

Marx thought that socialism could help

rid the world of these injustices. However, he

believed that the transition to socialism would

not happen quickly because many people, espe-

cially the wealthier classes, would not see any

benefit for themselves. For that reason, he

thought the workers would have to control the

government. Because the government would

then control the economy, a command economy

would result. The system in which the govern-

ment owns almost all the means of produc-

tion and controls economic planning is called

communism. Years later, some governments

would adopt communism and use it to violate

basic human rights and freedom of choice.

Infer Why did capitalism pro-

voke strong response from the socialists?

Effects on Society The rise of new economic ideas was among the

countless effects of the Industrial Revolution.

Other effects were felt in small and large ways,

from how families lived to how countries dealt

with each other. For example, the shift away

from cottage industries affected home life and

the roles of women in society.

Effects on Home Life When work was

done in the home, women often worked along-

side their husbands. Then when industry drew

workers away from home, women were usually

the ones who stayed home to care for children.

The worlds of work and home began to sepa-

rate. Women and men were seen as occupying

“separate spheres”—the woman in the home

and the man in the workplace to support the

home and family.

EFFECTS OF INDUSTRIALIZATION

ON WOMEN

Th

e T

erra

ce, b

y Si

lves

tro

Leg

ato

, 18

68

Women Who Went from Cottage

Industries to Factory Work

W Earned low wages in low-skill jobsW Separated from their familiesW No real improvement in their status

Other Working-Class Women

W Found jobs as cooks, maids, and child-care workers because more families could afford to hire them

W Found some new educational and cultural opportunities in cities

W Overall improvement for many women

Middle-Class Women

W Freed from chores because many could afford to hire domestic help

W Began to attend college and get jobs as teachers and nurses

W Those who did work often criticized by people who said that they should not work outside the home

W Most affected by idea of separate spheres

Tim

e fo

r T

ea, b

y V

ale

nti

ne

Pri

nse

p, 1

80

0s

Skills Focus: Analyzing Costs and Benefits Above Level

252

Women, Writing,

and the Industrial Revolution,

Women, Writing and the Industrial Revolution,

Reading Focus

Effects on Society

Recall

became leaders in

global economy; mass produced ships

and weapons

Elaborate

possible answer—limited number

of jobs, housing, waves of immigrants

looking for work

Map Transparency: Industrialized

Europe, 1900

CRF: History and Geography: The First

Modern Railroad

AnswersInterpreting Maps 1. Britain,

Belgium, parts of Germany and eastern

Europe, northern Italy; 2. industrial area

grew up around a mine or power source

Social Studies Skill

Analysis of Industrialization 1.

2.

3.

Intrapersonal

Alternative Assessment Handbook, Rubric 11:

Discussions

Interactive Map: Industrialized Europe,

1900

252 CHAPTER 7

INDUSTRIALIZED EUROPE, 1900

Interactive

GEOGRAPHY

SKILLS INTERPRETING MAPS

1. Regions What areas were heavily industrialized by 1900?

2. Human-Environment Interaction Some areas were heavily industrialized but did not have major cities. What do you think explains that situation?

Although some countries, such as Sweden, did not develop industry early, their natural resources fed the factories of other countries. For example, Sweden had major iron deposits.

Coal mines helped make the Ruhr area of Germany one of the world’s largest industrial regions.

While much of central and western Europe became heavily industrialized, most of southern Europe lagged behind.

Great Britain’s industrial strength brought with it wealth and power.

The idea of separate spheres had another

effect. Although so many people enjoyed what

the new industrialized economy provided, in

general they saw the business world as with-

out moral controls. Women were expected to

provide moral guidance in the home.

Middle-class families were more affected

by this division between home and work than

were lower-class families. Poorer families that

depended on two incomes to survive could

not afford for the wife to stay home. However,

belief in the home as society’s moral center was

equally powerful among lower-class families.

Effects on Countries On a scale much

larger than the family home, industrializa-

tion also affected entire countries. For some

nations, industry brought with it great power.

For example, Great Britain, France, and Ger-

many became leaders in the global economy.

Keyword: SHL IND

Interactive Mapgo.hrw.com

253

Effects on Society

Identify

great

power, military strength, increase in

overall wealth and standard of living,

leisure time

Evaluate

possible answers—costs;

destroyed an older way of life and the

environment; benefits; brought pros-

perity, wealth, and leisure time

CRF: Biography: Louis Pasteur

CRF: Interdisciplinary Project

Close

Review

Online Quiz, Section 3

Assess

SE Section 3 Assessment

Progress Assessment: Section 3 Quiz

Alternative Assessment Handbook

Reteach/Intervene

Interactive Reader and Study Guide,

Section 3

Interactive Skills Tutor CD-ROM

AnswersReading Check families—wealth,

leisure time, better educated; countries—

increased power, wealth, and living

standards; overcrowding of cities,

pollution, rapid population growth

Section 3 Assessment Answers

1. a. Smith supported laissez-faire economics in

his book, The Wealth of Nations.

b. saw restrictions as obstacles that prevented

the growth of companies

c. factory workers; business owners, capitalists

2. a. developed communism, a more radical

approach to socialist ideas

b. possible answer—might agree with Marx

because of his socialist views

3. a. increased standard of living

b. possible answer—Americans wanted indi-

vidual rights and fewer economic restrictions.

c. possible answers—children’s morals

improved; probably missed their fathers

4. Capitalism—increased wealth, fewer govern-

ment restrictions; Utopianism—poverty and

social evils eliminated; Socialism—societal

control of property and industry; Communism—

workers control government and economy

5. Student conversations might include that the

middle class can afford new products, enjoy

leisure time, and live in cities.

Reading Focus

THE INDUSTRIAL REVOLUTION 253

Mass production increased their ability to

build ships and make weapons. With increased

military strength, some countries were able to

conquer and control sources of raw materials

around the world.

The powerful industrial giants could even

control the economy of a place thousands of

miles away. For example, India had made and

exported cotton cloth for centuries already

when Britain took control of the region. Indian

textile workshops were not mechanized, how-

ever, so cotton cloth imported from Britain was

cheaper. The Indian textile industry could not

compete and was practically destroyed.

Back on this side of the world, the effect

of industrialization on the United States was

very dramatic. With its huge size, wealth of

natural resources, and spirit of independence,

the United States industrialized rapidly. Like

the major industrial powers of Europe, the

United States gained global political power

based on its industrial strength. In addition,

industry helped the country’s population grow

quickly. A large number of the new Americans

had moved from other lands around the world,

drawn by jobs in American factories. The immi-

grants, both skilled and unskilled, contributed

to the nation’s economic success and its cul-

tural variety.

Long-Term Effects on Societies Over-

all, industrialized societies saw an increase

in wealth. It is true that much of the wealth

flowed into the pockets of a few rich industri-

alists. But manufacturing also created a new

middle class of clerks, merchants, and manag-

ers. In general, the standard of living, or level

of material comfort, for people in industrialized

countries improved. Even many of the poorest

people gradually benefited from labor-saving

devices and cheap, machine-made goods.

The Industrial Revolution introduced

something new to the middle class: leisure.

People had more time on their hands and more

money in their pockets. They could enjoy public

sports events, a concert in the park, a day at

the beach, or even a vacation. With increased

leisure time, they could become more educated

or participate more deeply in politics.

You will soon read how industrialization

brought big changes to almost all aspects of

daily life—from art to transportation. We are

still experiencing those changes in our lives

today. The full story of the Industrial Revolu-

tion has yet to be written.

Identify Cause and

Effect What were some of the major effects industri-

alization had on families and countries?

SECTION ASSESSMENT3

Reviewing Ideas, Terms, and People

1. a. Identify What is the connection between Adam Smithand laissez-faire economics?

b. Draw Conclusions Why do you think some economists believed that unrestricted capitalism would help all of society?

c. Predict What are some of the groups of people who might have called the big industrialists “robber barons”? Who might have called them “captains of industry”?

2. a. Describe What was the role of Karl Marx and Friedrich Engels in the development of socialism?

b. Analyze How would someone who advocated social democracy have responded to Marx’s prediction?

3. a. Recall How did the Industrial Revolution affect the standard of living for people in industrialized countries?

b. Interpret Why do you think Americans’ spirit of indepen-dence encouraged the growth of capitalism?

c. Predict How do you think the idea of separate spheres affected the children of middle-class families?

Critical Thinking

4. Compare and Contrast How did each of the major economic theories propose to change or benefit society? Fill in a table like the one below with as many changes as you can.

5. Description Imagine that you belong to a middle-class family in the late 1800s. Write a conversation that you have with your great-grandfather about the changes that your family has experienced over the years.

Keyword: SHL IND HP

Online Quizgo.hrw.com

Theory Proposed Social Change

Capitalism

Utopianism

Socialism

Communism