Effects of the Industrial Revolution

Daily Learning Goal: I can explain the meaning of and difference between the ideas

of capitalism, utilitarianism and socialism.

Review: Changes of the Industrial Revolution

Working Class• Long hours for workers• Dangerous conditions• Low – moderate wages• Cities grew quickly• Tenement housing• Most stuck in lower

class

Upper Class• Factories produced large

quantities of goods• Factory owners and business

moguls / barons• Consolidated industries by buying

out their competition or forcing them out by lowering prices and giving deals.

• Made tons of money from the cheap production of goods.

• Increased percentage of wealth they controlled

Non-industrialized nations

• Not all nations were able to industrialize• Rich, industrialized nations looked to other

places to acquire key natural resources (iron, oil, copper, etc).

• Industrialized nations looked to sell their goods to these smaller countries

• These countries fell farther behind the industrialized nations

Philosophical Responses to the Industrial Revolution

• Capitalism – The economic idea that production decisions and methods should be owned and made by private individuals.

• Utilitarianism – theory that the goal of all actions should be to positively affecting the MOST people in mind.

• Socialism – The economic idea that to prevent inequality, production decisions and methods should be owned and made by the government.

• Communism – The economic idea that in order to prevent greed and inequality, production decisions and methods should be owned and made by the government and that no all property should be shared.

Capitalism – Key features• Adam Smith – one of “founding” philosophers. Wealth of Nations

– People do things in their own self interest• Free Enterprise – people can create whatever business they want• Supply and Demand – if people want a product, someone will create and sell it.

The result is the lowest price in the market.• Free Competition – different companies work to create the product that the

most people want. – Do what’s necessary to get best product

• Role of Government is limited to protecting individual rights:– Laissez Faire – let it be– Right to private property

• Goal of Capitalism is PROFIT – for owners and investors of companies• David Ricardo – Principles of Political Economy and Taxation: There will always be

a poor working class because labor is cheap and the more workers there are, the lower the wages.

Supply and Demand of Workers

• During the Industrial Revolution, living conditions improved, which meant people lived longer.

• Populations grew meaning there were more available workers (supply).

• Because there was a higher supply of workers, this meant business owners could pay workers less.

Review

1. Identify 2 details of workers in industrialized countries

2. Identify 2 details of upper class in industrialized nations

3. Give 1 reason why non-industrialized countries “fell behind”

4. Name 2 principles of Capitalism5. Why did the increase in population keep wages

from increasing?

Capitalism

Vocabulary 4-Square

Characteristics(General)

----

Definition

Non-Examples (specifics)

----

Examples(specifics)

----

Warm up: What are the 4 principles of Capitalism?

Daily Learning Goal: I can explain the meaning of and difference between the ideas

of capitalism, utilitarianism and socialism.

“Consider what is happening among the working classes… Do you not see spreading among them, little by little, opinions and ideas that aim not to overturn such and such a ministry or such laws, or such a government, but society itself, to shake it to the foundations upon which it now rests?”

- Alexis De Tocqueville 1848

Discussion: 1. What group does Tocqueville support? 2. What kind of change is Tocqueville advocating?3. Based on your understanding of Capitalism, why does he think such change is needed?

Utilitarianism

• Philosophy of Jeremy Bentham and John Stuart Mill.• Bentham:

– “What is the use of it?”– Ideas, institutions and actions should be judged on the basis

of usefulness– “Greatest happiness for the greatest number”

• Mill: – Unregulated capitalism hurts workers and leads to poor lives.– Wanted policies that led to more even distribution of income.– Cooperative systems of production lead to equality.

Outcomes of Utilitarianism1. Labor Unions – workers organized to form

unions -better pay -safer working

conditions-fewer working hours -child labor laws-worker strikes to leverage employers

2. Increased focus on education

Utilitarianism

Vocabulary 4-Square

Characteristics----

Definition

Non-Examples----

Examples----

Solving the problems of Capitalism

• “Founding Fathers” Karl Marks and Friedrich Engels wrote The Communist Manifesto in 1848.

• Wanted a solution for the “Problems” of Capitalism.– Capitalism creates greed. People must take advantage

of others to get ahead. – In order for businesses to succeed, they must take out

their competition.– Under capitalism the rich get richer, and the poor stay

poor.

A communal approach

• No private property– Property is shared

• People work together to run the economy• Requires a revolution or forcible takeover of

existing Capitalist government.• Government manages the economy for the

people during the ‘transition period’

Communism

Vocabulary 4-Square

Characteristics----

Definition

Non-Examples----

Examples----

Warm up: Review• Name the 4 principles of

Capitalism• Name 2 problems with Capitalism• What’s the main question asked by

Utilitarianism?• Name 2 outcomes of Utilitarianism• What are two principles of

Communism?

Daily Learning Goal: I can describe and explain connections and differences between the different economic philosophies of the Industrial Revolution

HomeworkChoose 2 economic ideologies from the Industrial Revolution and write a compare/contrast paragraph using sentence frames. • Min. 6 sentences. • Blue/Black ink.• Underline sentence

frames.

The “Wage” issue

P ($$)

Quantity

D

S

“Equilibrium”In a model capitalist world, the supply of workers and the demand for labor meet at an equilibrium point. This point is where the market balances itself with the number of workers available (supply) and number of workers desired (demand) This point is where the most workers (based on skill set) will be employed.

Productivity of Workers – Free Market

P ($$)

Quantity

D -M

S - N

“Maximizing Productivity”

Supply of Maximum Productivity

Businesses learned that workers are capable of producing a maximum level that increases the wage they earn because fewer workers are required to complete a job. Under this scenario, each worker does more work, but is also paid more for this work.

Businesses maximize profits

P ($$)

Quantity

D

S

“The Monopoly Scenario”

In a Monopoly scenario, there is no competition between businesses. This was common during the Industrial Revolution. In this scenario, business owners are aware that their workers are able to produce at a higher level. Rather than pay the workers the market price, they pay workers a reduced price in order to maximize their profits. The red circle is the wage that is paid and the green box represents the additional profits made by companies as a result of paying workers less to do more work.

Review / Forming Opinion• What does equilibrium

represent?• What happens when

workers can work more efficiently in a Free-Market system?

• What do monopoly businesses often do to their workers?

Determine whether you agree or disagree with each statement:

1. It’s wrong to pay workers less to do more.

2. A company should do whatever it needs to be successful.

3. A business’ freedom is more important than creating equality for its workers.

Moving from Utilitarianism to Socialism

Socialism• Workers Right• Better pay• Laws to protect workers

rights• Government owns and

operates most factors of production to ensure workers rights are ensured.

• Goals: end poverty and promote equality. All people’s needs should be met.

Utilitarianism• Workers Right• Better pay• Laws to protect rights• Private ownership is

ok as long as all decisions help the majority of people.

• Goals: promote the common good of all people.

Socialism

• Belief: Capitalism leads to the rich taking advantage of the poor. Inequality is unfair and should be corrected.

• Governments of the people should protect these rights to equality (NO Government overthrow required)

• Laws put in place to make methods of production (natural resources and factories) the property of the people (publicly owned)

• Social Justice – a concern for the well-being of all people, no matter where they are or what their current condition is.

Examples of social programs

• Social Security – all people pay a ‘tax’ which then gives people who have worked for a significant portion of their lives a salary to live on.

• Public Education – creates a higher possibility for vertical movement between social classes.

• Universal Health Care – allows all citizens the opportunity to seek medical attention when needed, regardless of how much money they have.

Socialism

Vocabulary 4-Square

Characteristics----

Definition

Non-Examples----

Examples----

Daily Learning Goal: I can use explain and describe language to construct a 2 paragraph response that identifies 2 key ideas of the Industrial Revolution.

Review• What is the main question asked

in Utilitarianism?• What are 2 utilitarian reforms?• Name 2 problems with

capitalism• What are 2 requirements of

Communism?• Name 2 types of social programs• What are the major differences

between socialism and communism?

Homework: Complete Vocabulary 4-squares (in journal) for each of the philosophies of the Industrial Revolution we have discussed this week. I will collect your journals on Friday to grade them.