Download File - Ms. halty`s class

February 25, 2016
Get out reading-T Chart from yesterday
Industrial Revolutions sparks new ways of thinking
• Business leaders wanted less government intervention
• Workers wanted more rights
• Reformers wanted more government regulation
Capitalism
• Capitalism:
– factors of production are privately owned
– Goal is to make a profit
– Don’t believe in helping poor workers because it would hurt the free
market
Capitalism
• Based on laissez-faire
economics
– “let people do as they please”
– Natural laws would promote
economic growth
• Adam Smith
– Believed in free markets and free
economy
– Wrote “The Wealth of Nations”
– Based beliefs on three natural
laws
Three Natural Laws
• Law of self-interest
– People work for their own good
• Law of competition
– Competition forces people to make a better product
• Law of the “invisible hand”
– Everyone working in own self interest will promote efficiency
– Enough goods will be produced at the lowest price possible to meet
demand in a market economy
Socialism
• Socialism:
– Born out of resentment of workers of growing class and wealth divide
– Workers revolt and take over factors of production
– Creates government whose goal is to benefit all
• Govt. intervention in economy
– Opposed to laissez-faire
Marxism
• Radical form of socialism
• Coined by Karl Marx and
Friedrich Engels in 1848
• Argued the Industrial
Revolution had enriched the
wealthy and impoverished
the poor
• Society was divided into
“warring classes” of “haves”
and “have nots”
Communist Manifesto
• Pamphlet written by Marx and
Engels
• Wealthy controlled the means
of production while workers
performed the labor
• They argued the
workers(proletariat) will unite
and overthrow the wealth
factory owners (bourgeoisie)
Communist Manifesto
• Prediction:
– Large corporations would buy up small factories
and control all the wealth
– Workers would revolt, seize factories, and produce
necessary goods
– Workers would spread wealth equally (beginnings
of socialism)
– Workers would control the government
– Government would slowly diminish
– The country would be ruled by a classless society
– Finally, communism
Problems?
1) Misunderstand human motives and
unrealistic
2) Revolution never happens
2) Totalitarian one party rule emerge
instead
3) Command Economies fail
• lacks incentive and competition