Solutions to the Problems of Industrialization

1. Solutions to the Problems of Industrialization Capitalism vs. Socialism

2. Capitalism – What is it? • Basic meaning: An economic system where there is freedom for the private individual • Under Capitalism, economic exchanges are essentially a private matter between persons pursuing profits. • Philosophy – the best way to promote the good of society as a whole is to let people pursue their private interests. • Government is Laissez Faire • Hands off • No involvement • No regulation

3. The Roots of Capitalism • Began as Mercantilism • Capitalism grew to be the predominate economic system in the Western World • Religions at the time did not like the emphasis on private gain, the 1700s emphasized the idea that people ought to be free to pursue their private interests, including economic interests. • Adam Smith'sThe Wealth of Nations (1776) -recommended leaving economic decisions to the free play of self-regulating market forces. • AKA No Government Involvement

4. Capitalism - Pros • Minimal government intrusion into the public arena. • People are more mobile in the social hierarchy, equal opportunity • Rewards merit, ability and achievement, regardless of birth station • Freedom to experiment, invent and produce • Wealth has an unlimited growth potential • Very Efficient

5. Capitalism - Cons • Corruption, cold-heartedness, callous, exploitative, dehumanizing, alienating, and ultimately enslaving. • Creates Class Divisions • Economic Inequalities • Unequal life-chances • Creates alienation of people from their work and other people

6. Socialism – What is it? • Definition: An economic or political system that features gov. control of business and property and equal distribution of wealth. • Theory: Private property is the source of the class divisions that place some people in positions of power and privilege, while condemning others to poverty and powerlessness. • BUT Socialist feel that Everything people produce, is in some sense a social product, and everyone who participates in producing a good is entitled to share in it. SO IN SOCIALISM • Society as a whole, not the private individual, should own and control property for the benefit of all.

7. The Roots of Socialism Karl Marx • In an industrial capitalist society there were 2 classes: • the Bourgeoisie and the Wage Laborers (Proletariat) • Marx felt capitalism was a progressive good but that Capitalism has outlived itself. Need a new type of society to continue the progression to human betterment • ie. a classless society. • true freedom (which is freedom from exploitation and alienation, the freedom to develop one’s human powers to their fullest) can flourish only in a classless society. • Basically, the Proletariat, needs to start a revolution to overthrow capitalism and create a classless socialist/communist society.

8. Socialism - Pros • Small gap between wealthy and poor • Equality • Workers have more ownership • No competition = kinder to each other

9. Socialism - Cons • Less motivation to work hard – rewards laziness • Less Efficiency • Money taken from those who have earned it through hard work • No motivation to invent