REFORMING THE INDUSTRIAL WORLD

Section 4Ch. 25

CAPITALISM

• Laissez faire refers to the economic policy of letting owners of industry and business set working conditions without interference

• Adam Smith wrote in his book The Wealth of Nations that economic liberty guaranteed economic progress

• Smith’s three laws of economics were• the law of self-interest• the law of competition• the law of supply and demand

CAPITALISM

• Smith’s ideas supported capitalism- the economic system in which the factors of production are privately owned and money is invested in business ventures to make profit

• Smith and other laissez-faire thinkers opposed government efforts to help poor workers

• They believed that a minimum wage and better working conditions would upset the free market system

UTILITARIANISM

• Utilitarianism was a philosophy that supported government intervention.

• The main idea of this philosophy was that people should judge ideas, institutions, and actions based on their utility, or usefulness.

• Governments should try to promote the greatest good for the greatest number of people.

THE RISE OF SOCIALISM

• Socialism is an economic system in which the factors of production are owned by the public and operate for the welfare of all

• Karl Marx was a German journalist introduced a radical type of socialism called Marxism

• Marx believed that human society has always been divided into warring classes

• The final phase of socialism is pure communism in which private property and governments cease to exist

UNIONIZATION

• To press for labor reforms, workers joined voluntary associations called unions

• Unions would engage in collective bargaining, negotiations between the workers and their employers

• If factory owners refused the demands, the workers would strike

UNIONIZATION

• Unions were outlawed by the British Combinations Acts of 1799 and 1800

• Workers ignored them and by 1824 the government repealed the acts

• By 1875, British unions had about 1 million members• In the U.S. the largest labor union was the American Federation of

Labor (AFL), which was formed in 1886 by several unions

REFORM LAWS

• In Britain, Parliament passed the Factory Act of 1833, with the following provisions

• Illegal to hire children under age 9• Children 9-12 could work no more than 8 hrs• Young adults 13-17, no more than 12 hrs

• In 1919, the U.S. Supreme Court ruled against a child labor law, arguing it would interfere with state’s rights to regulate labor

THE ABOLITION OF SLAVERY

• From 1807 to 1833, Britain slowly worked to end its slave trade

• Some members of Parliament argued against slavery for moral reasons, others for economic reasons

• Slavery ended in the U.S. in 1865, Puerto Rico-1873, Cuba-1886, and Brazil-1888