1. LEQ: What new ideas about economics
and society were fostered as a result of
the Industrial Revolution?

2. LEQ: What new ideas about economics
and society were fostered as a result of
the Industrial Revolution?

3. Thomas Malthus – British economist; wrote An Essay
on the Principles of Population warning that the
population would outgrow the food supply
Thomas Malthus was an English economist who
carefully studied the impact of the population
explosion in eighteenth-century Britain.
He concluded that poverty was unavoidable
because the population was growing faster than
the nation’s ability to grow food.

4. Malthus said He felt that Many agreed
that unless “natural events” with Malthus,
the working such as famine but he proved
class had or war were to be wrong.
fewer children, the only Food
they were mechanisms to production
doomed to maintain a rose quickly
remain in sustainable over the
poverty. population. next century.

5. Eighteenth-century thinkers such as Malthus
believed that natural laws govern the world
of business and economics.
They believed these laws This attitude of
should be allowed to keeping “hands
operate without any off” was called
government interference. “laissez-faire.”

6. Most famous among these thinkers was Adam
Smith. Most middle-class capitalists agreed with
his laissez-faire approach to capitalism.
Supporters of free-market capitalism saw the
success of the industrial age, in which government
played no part, as evidence for laissez-faire.

7. Another British laissez-faire economist
was David Ricardo.
Like Malthus, Ricardo opposed help
Ricardo saw no for the poor, contending
hope for the that this would only
working class to lead them to have
escape poverty. more children.
Malthus and Ricardo saw the best cure for poverty
as the “laws of the free market” and advised the poor
to be thrifty, work hard, and have fewer children.

8. Explain the response to laissez-faire
economics during the nineteenth
century.
Some supported the theory and felt it would
improve the economy; other economists, while
supporting laissez-faire, still felt poor families
would have a difficult time.

9. Jeremy Bentham – British philosopher and economist
who advocated utilitarianism
Other thinkers, such as Jeremy Bentham,
believed there should be some government
intervention in the economy.
Bentham believed that the Laws should
goal of society should be be judged
“the greatest happiness for by their utility
the greatest number of to benefit
citizens.” This idea was people.
called utilitarianism.

10. A follower of Bentham was John Stuart Mill.
• Like Bentham and Smith, Mill believed in
individual freedom.
• But he also believed, “The only purpose for which
power can be rightfully exercised over any
member of a civilized community, against his will,
is to prevent harm to others.”
• Mill saw capitalists harming workers. He called for
limiting their power to do so by giving workers the
right to vote.

11. means of production – farms, factories, railways,
mines, and other large businesses that produce and
distribute goods
The champions of laissez-faire economics
praised individual rights, whereas socialists
focused on the good of society in general.
Capitalism: Socialism:
Individuals should The people as
own and operate a whole should
the means of own and operate
production for the means of
profit. production for the
general good.

12. Robert Owen – a Utopian who set up a model community
at his cotton mill in Scotland
Socialists set up These early socialists
communities where were called Utopians.
work was shared The name implied
and property was impractical dreamers.
commonly owned.
Robert Owen set up a Utopian community
at his cotton mill in New Lanark, Scotland.

13. At New Lanark, Owen:
Owen’s model
community was • Raised wages
intended to • Provided schools
show that mill
owners could make • Refused to use child
a profit labor
and still offer
decent wages • Built homes for workers
and conditions. • Ran a profitable
business

14. What did early socialists believe?
Early socialists believed that all property and all
means of production should be owned by the
people as a whole.

15. Karl Marx – German philosopher who, with Frederick
Engels, published The Communist Manifesto predicting
class struggle
German philosopher Karl Marx condemned the
ideas of the Utopians as unrealistic idealism.
He formulated
a new theory
of “scientific
socialism.”

16. Along with Englishman Frederick Engels,
Marx published The Communist Manifesto
in 1848.
• He predicted a struggle between the social classes
that would lead to a classless society.
• The workers would take over all of the means of
production, such as the farms, factories, and
railways, and run them for the public good.

17. proletariat – society’s “have nots,” the
working class
• In industrialized Western
Marx theorized Europe, the “haves” were
that all of history the business owners or
was a struggle bourgeoisie.
between the
“haves” and • The “have-nots” were the
the “have-nots.” workers, or proletariat.
• In the end, the proletariat
would unite along class
lines, take control of the
means of production, and
end the struggle.

18. What did Marx predict was the future
of the
proletariat?
The proletariat would overthrow capitalism
through revolution, take control of the means of
production, and create a classless society.

19. social democracy – a political ideology favoring
gradual transition from capitalism to socialism
• In Germany, socialists
Marx called adapted Marx’s beliefs to
for workers form social democracy,
everywhere a political ideology
to unite and calling for a gradual
overthrow the transition from capitalism
capitalists. to socialism.
• Russian socialists
embraced Marx’s ideas
and set up a communist-
inspired government in
1917.

20. Revolutionaries But workers The later failures
around the worldwide of communist
world adapted never nations illustrated
Marx to their united as
local goals a class. flaws in Marx’s
and needs. theories.

21. LEQ: What new ideas about economics
and society were fostered as a result of
the Industrial Revolution?
laissez-faire economics, utilitarianism,
socialism, and communism (Marxism)