World History - New ways of thinking

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  • 1. New Ways of ThinkingNew Ways of ThinkingNew Ways of ThinkingNew Ways of Thinking A Look atA Look at Different Economic TheoriesDifferent Economic Theories A Look atA Look at Different Economic TheoriesDifferent Economic Theories

2. Adam SmithAdam SmithAdam SmithAdam Smith Believed in Laissez Faire EconomicsBelieved in Laissez Faire Economics Government should not interfere in businessGovernment should not interfere in business hands - off approachhands - off approach Wrote, The Wealth of Nations.Wrote, The Wealth of Nations. The free market would produce goods at lowerThe free market would produce goods at lower prices, making the affordable to everyone becauseprices, making the affordable to everyone because of competitionof competition Growing economy would encourage capitalists tiGrowing economy would encourage capitalists ti invest in new projectsinvest in new projects Believed in Laissez Faire EconomicsBelieved in Laissez Faire Economics Government should not interfere in businessGovernment should not interfere in business hands - off approachhands - off approach Wrote, The Wealth of Nations.Wrote, The Wealth of Nations. The free market would produce goods at lowerThe free market would produce goods at lower prices, making the affordable to everyone becauseprices, making the affordable to everyone because of competitionof competition Growing economy would encourage capitalists tiGrowing economy would encourage capitalists ti invest in new projectsinvest in new projects 3. Thomas MalthusThomas MalthusThomas MalthusThomas Malthus Saw the effects of population explosionSaw the effects of population explosion Crowded slums, hungry families, unemploymentCrowded slums, hungry families, unemployment WroteWrote An Essay on the Principle of Population.An Essay on the Principle of Population. Concluded that poverty was unavoidable becauseConcluded that poverty was unavoidable because the population was increasing faster than foodthe population was increasing faster than food supplysupply Saw the effects of population explosionSaw the effects of population explosion Crowded slums, hungry families, unemploymentCrowded slums, hungry families, unemployment WroteWrote An Essay on the Principle of Population.An Essay on the Principle of Population. Concluded that poverty was unavoidable becauseConcluded that poverty was unavoidable because the population was increasing faster than foodthe population was increasing faster than food supplysupply 4. Thomas MalthusThomas MalthusThomas MalthusThomas Malthus Also a laissez faire believer who said that theAlso a laissez faire believer who said that the only check on population growth would beonly check on population growth would be natural methods of war, disease and faminenatural methods of war, disease and famine Said as long as population kept increasing theSaid as long as population kept increasing the poor would sufferpoor would suffer Urged families to have fewer children andUrged families to have fewer children and discouraged charity and vaccinationsdiscouraged charity and vaccinations Also a laissez faire believer who said that theAlso a laissez faire believer who said that the only check on population growth would beonly check on population growth would be natural methods of war, disease and faminenatural methods of war, disease and famine Said as long as population kept increasing theSaid as long as population kept increasing the poor would sufferpoor would suffer Urged families to have fewer children andUrged families to have fewer children and discouraged charity and vaccinationsdiscouraged charity and vaccinations 5. Thomas MalthusThomas MalthusThomas MalthusThomas Malthus Malthus was wrong because the food supplyMalthus was wrong because the food supply began to grow as fast as the population andbegan to grow as fast as the population and living conditions slowly improved in the Westliving conditions slowly improved in the West However this would now become a problemHowever this would now become a problem in other parts of the worldin other parts of the world Malthus was wrong because the food supplyMalthus was wrong because the food supply began to grow as fast as the population andbegan to grow as fast as the population and living conditions slowly improved in the Westliving conditions slowly improved in the West However this would now become a problemHowever this would now become a problem in other parts of the worldin other parts of the world 6. David RicardoDavid RicardoDavid RicardoDavid Ricardo Also a laissez faire economistAlso a laissez faire economist Thought there was no hope for the workingThought there was no hope for the working class to escape povertyclass to escape poverty Wrote, Iron Law of Wages.Wrote, Iron Law of Wages. Wage increases were no use because they wouldWage increases were no use because they would only cover the cost of necessities because whenonly cover the cost of necessities because when wages were high families had more childrenwages were high families had more children Also a laissez faire economistAlso a laissez faire economist Thought there was no hope for the workingThought there was no hope for the working class to escape povertyclass to escape poverty Wrote, Iron Law of Wages.Wrote, Iron Law of Wages. Wage increases were no use because they wouldWage increases were no use because they would only cover the cost of necessities because whenonly cover the cost of necessities because when wages were high families had more childrenwages were high families had more children 7. What Should Government DoWhat Should Government DoWhat Should Government DoWhat Should Government Do Smith, Malthus and Ricardo all believed thatSmith, Malthus and Ricardo all believed that government should not help the poorgovernment should not help the poor Thought the best cure for poverty was notThought the best cure for poverty was not government help but the unrestricted freegovernment help but the unrestricted free market where individual would improve theirmarket where individual would improve their lives through hard work and by limiting thelives through hard work and by limiting the size of their families.size of their families. Smith, Malthus and Ricardo all believed thatSmith, Malthus and Ricardo all believed that government should not help the poorgovernment should not help the poor Thought the best cure for poverty was notThought the best cure for poverty was not government help but the unrestricted freegovernment help but the unrestricted free market where individual would improve theirmarket where individual would improve their lives through hard work and by limiting thelives through hard work and by limiting the size of their families.size of their families. Summarize the views of Laissez Faire Economists Smith, Malthus & Ricardo 8. UtilitarianismUtilitarianismUtilitarianismUtilitarianism Advocated by Jeremy BenthamAdvocated by Jeremy Bentham Goal should be the greatest happiness for theGoal should be the greatest happiness for the greatest numbergreatest number Laws should be judged on whether they provideLaws should be judged on whether they provide more happiness or painmore happiness or pain Supported individual freedom and thought thatSupported individual freedom and thought that some government aid was necessarysome government aid was necessary Advocated by Jeremy BenthamAdvocated by Jeremy Bentham Goal should be the greatest happiness for theGoal should be the greatest happiness for the greatest numbergreatest number Laws should be judged on whether they provideLaws should be judged on whether they provide more happiness or painmore happiness or pain Supported individual freedom and thought thatSupported individual freedom and thought that some government aid was necessarysome government aid was necessary 9. UtilitarianismUtilitarianismUtilitarianismUtilitarianism John Start MillJohn Start Mill Wanted the government to step in and improveWanted the government to step in and improve the hard lives of the working classthe hard lives of the working class Said middle class business owners were entitled toSaid middle class business owners were entitled to increase their own happiness but should not do soincrease their own happiness but should not do so at the expense of the workersat the expense of the workers Called for giving women and workers the right toCalled for giving women and workers the right to vote so they could use their political power tovote so they could use their political power to bring reformsbring reforms John Start MillJohn Start Mill Wanted the government to step in and improveWanted the government to step in and improve the hard lives of the working classthe hard lives of the working class Said middle class business owners were entitled toSaid middle class business owners were entitled to increase their own happiness but should not do soincrease their own happiness but should not do so at the expense of the workersat the expense of the workers Called for giving women and workers the right toCalled for giving women and workers the right to vote so they could use their political power tovote so they could use their political power to bring reformsbring reforms What did utilitarians believe the role of government should be? 10. Socialism and Karl MarxSocialism and Karl MarxSocialism and Karl MarxSocialism and Karl Marx Condemned the evils of industrial capitalismCondemned the evils of industrial capitalism which they believed had created a gapwhich they believed had created a gap between the rich and the poorbetween the rich and the poor SocialismSocialism Solution to problems of capitalismSolution to problems of capitalism People as a whole would own and operate thePeople as a whole would own and operate the means of production (factories, goods, money)means of production (factories, goods, money) Condemned the evils of industrial capitalismCondemned