Economic Philosophies of the Industrial Revolution
Key Economic Concepts and Thinkers
- Laissez-faire
- Refers to the economic policy of letting owners of industry and business set working conditions without interference.
- Adam Smith
- A professor at the University of Glasgow, Scotland, who defended the idea of a free economy, or free market.
- Capitalism
- An economic system in which money is invested in business ventures with the goal of making a profit.
- Utilitarianism
- The theory proposed by Jeremy Bentham in the late 1700s, stating that government actions are useful only if they promote the greatest good for the greatest number of people.
- Socialism
- An economic system where the factors of production are owned by the public and operated for the welfare of all.
- Karl Marx
- Introduced the world to a radical type of socialism called Marxism.
- Communism
- A form of complete socialism in which the means of production—all land, mines, factories, railroads, and businesses—would be owned by the people.
Philosophers of Industrialization
Key philosophers included Adam Smith, Thomas Malthus, David Ricardo, and Karl Marx. Smith, Malthus, and Ricardo generally supported free-market ideas.
Economic Systems Compared
Capitalism
- Advocates that government should not put limits on people’s businesses.
- Believes this system helps the economy grow and improve.
- Involves people investing their money to make a profit from businesses.
- Proposes that society, as a whole, will benefit from this system.
Socialism
- Challenged the principles of capitalism.
- Influenced by ideas such as Utilitarianism.
- Advocated for society as a whole, or the state, to run businesses.
- Aimed for all people to benefit from the increase in production.
- Focused on progress, social justice, and the welfare of workers and farmers.
Labor and Reform Movements
Labor Unions and Reform Laws
- Workers formed unions to bargain collectively for better pay and improved working conditions.
- Reform laws were enacted, often limiting working hours, especially for women and children.
Spread of the Reform Movement
The broader reform movement advocated for various social changes, including:
- Greater equality between men and women.
- Improvements in public education.
- The abolition of slavery.
- Better conditions in prisons.