Reforming the industrial world

1. Reforming the industrial world Chapter 9: Section 4

2. Setting the Stage • The IR widened the gap between rich & poor in industrialized nations • Business leaders believed govs should stay out of business & economics. • Reformers felt govs needed to play a more active role to improve conditions for the poor. • Workers also demanded more rights & formed unions to protect their interests

3. Laissez faire economics • This refers to the econ policy of letting owners of industry & business set working conditions w/o interference. • The policy favors a “free market unregulated by gov” • Laissez fair econs arose with the philosophers of the Enlightenment. • They criticized mercantilism or the idea that a nation grew wealthy by placing heavy tariffs on f/good.

4. Laissez faire economics cont. • They argued that gov regulation only interfered with the production of wealth. • They argued that if gov allowed free trade – the flow of commerce in the world market w/o gov regulation- the econ would prosper

5. Adam Smith • Laissez faire economist • Wrote Wealth of Nations in 1776 • He believed that “econ liberty guaranteed econ progress” and as a result gov should not interfere. • His theory rested on what he called the 3 natural laws of economics • The law of self-interest – people work for their own good • The law of competition – competition forces people to make better products • The law of supply & demand –enough goods will be produced at the lowest possible price to meet demand

6. What is capitalism? • An economic system in which the means of production are privately owned and money is invested in business ventures to make a profit. • Must see chart on page 303 which shows the nexus between Adam Smith and Capitalism.

7. Thomas Malthus • He wrote Essay on the Principle of Population • Predicted pop would outpace food production • Without checks on pop (war, epidemics…) poverty would increase • Urged pop control and non interference by gov • His predictions seemed to be coming true in the 1840s but never materialized • Food supply increased • Living conditions improved • Fewer children

9. David Ricardo • Agreed that poor were having too many children & when wages were high families had more children • More children increased the supply of workers which led to lower wages & higher employment • Held out no hope for escape from poverty • “Dismal science” • Both Malthus & Ricardo opposed gov assistance • Best cure for poverty was “unrestricted laws of the free market” • Individuals had to work hard & limit family size

10. Opposed to Gov Intervention • Smith, Malthus & Ricardo all supported laissez faire capitalism and opposed gov efforts to help workers. • They believed that creating minimum wages & better working conditions would upset the free market system, lower profits and undermine the production of wealth in society.

11. Support of Gov Intervention • In contrast to laissez faire philosophy which advised govs to leave business alone, other theorists believed that gov should intervene • They believed that gov must take action to improve people’s lives.

12. Utilitarians • Jeremy Bentham – 1700s • Role of gov was to promote the greatest good for the greatest number of people • Urged gov involvement • Ideas should be based on their “utility” • John Stuart Mill 1800s • Questioned unregulated capitalism – wrong for workers to live such deprives lives • Believed in more equal division of profits • Pushed for legal and prison reforms

13. Utopians – Robert Owen • British factory owner & reformer • New Lanark • Built houses for workers • Prohibited child labor under age of 10 • Provided schooling • New Harmony – supposed to be a utopia

14. Socialism • In socialism the means of production are owned by the public and operate for the welfare of all. • Socialists argue that gov should plan the economy rather than depend on free market capitalism to do the job • They argue that gov control of factories, mines, rrs, & other key industries would end poverty and promote equality. • Charles Fourier, Saint Simon & Louis Blanc were all socialists

15. Marxism: Radical Socialism • Communist Manifesto 1848 • History is conflict between “haves” and “have nots” • History goes through cycles determined by economics • “Haves” own all the means of production • The oppressed proletariat will eventually violently overthrow the bourgeoisie • See excerpt p. 302

16. Communism • After violent revolution a “dictatorship of the proletariat” would be formed • After abolition of economic differences a “classless society” would form. This is communism • The state (a tool of the bourgeoisie) would then “wither away”. • No government would be necessary

17. Revisionists • Marx believed that econ forces alone dominated society. • Time has shown that religion, nationalism, ethnic loyalties and a desire for democ reforms may be as strong as influences on history as econ forces. • Non Marxists socialists believed that by winning the right to vote socialist goals would be achieved gradually by working within the system. • Workers did win many reforms such as: • Better working conditions • Shorter hours • Higher pay • Workman’s compensation

18. Labor Unions • To press for reforms workers joined unions • Unions engaged in collective bargaining • They bargained for better pay and working conditions and if refused they could strike • Skilled workers led the way in forming unions because their special skills gave them extra bargaining power. • Management would have difficulty replacing skilled workers

19. Union Evolution in Britain • For years the British gov denied workers the right to unionize • The Combination Acts of 1799 and 1800 outlawed unions and strikes • Workers joined anyways • Parliament eventually repealed the Combination Acts in 1824 • By 1875 British unions had won the right to strike • Built up membership of over a million

20. The American Federation of Labor • In the US skilled workers had belonged to unions since the early 1800s. • In 1886 several unions joined together to form the organization that would become the AFL. • A series of strikes won the AFL higher wages & shorter hours

21. Reform Laws in Britain • Eventually reformers and unions forced political leaders to look into the abuses caused by industrialization. • New laws reformed some of the worst abuses: • Factory Act of 1833 • The Mines Act 1842 • The Ten Hours Act 1847

22. Progressive Reforms in the US • The National Child Labor Committee was organized in 1904 to end child labor • Union members supported ban on child labor because they argued that it lowered wages for all workers • Supreme Ct struck down fed’l law that banned child labor bc it interfered with states rights to regulate labor but eventually states themselves outlawed child labor

23. British Abolition • Wm. Wilberforce was a religious member of Parliament who fought for abolition • Slave trade ended in 1807 and slavery ended in 1833 in British empire. • Antislavery activists had mixed motives. • Moral reasons • Cheap vs. slave labor became more economical

24. Fight for Women’s Rights • Women paid less than men • Formed women’s unions in the trades in which they dominated (e.g. garment industry) • Became safety inspectors in factories where other women worked • Jane Addams ran settlement houses in poor areas • Worked for abolition • Women’s movement in US began 1848 Seneca Falls • Internat’l Council for Women in 1888 had delegates from 27 countries for 1889 meeting.

25. Reforms cont • Public edu and prison reform ranked high • Horace Mann favored free edu • He believed edu was essential to prepare good citizenry and that republic depended on educated masses • Prison reform involved emphasizing “rehabilitation”