Results of the Industrial Revolution

Law of Economics

Adam Smith: considered founder of laissez-faire economics

Author The Wealth of Nations

Laissez-Faire Capitalism: belief that business should operate with little/no government interference

“The Invisible Hand”

Smith believed two laws govern economics:

1.Supply and Demand2. Competition

Thomas Malthus: Believed that population growth causes problems and poverty becomes unavoidable, endless cycle

David Ricardo: Believed that supply & demand determine wages, “Iron Law of Wages”

Utilitarianism

Utilitarianism: Belief that goal of society should be to provide greatest good for greatest number of people

John Stuart Mill: actions were right if they promote happiness and wrong if they cause pain Government’s role to “Prevent harm to

others”

Socialism

Socialism: political & economic system in which governments own the means of production and operate them for the benefit of all the people

Two Types:1. Utopian Socialists: idea that people can

live with each other in cooperative settlements owning all means of production and sharing all• Ex. Robert Owen

2. Communism: economic & political system in which governments own the means of production and control all economic planning

A. Karl Marx: German philosopher, along with Friedrich Engels wrote The Communist Manifesto

Marx’s Beliefs

Struggle between “haves” and “have-nots” “Haves” were the bourgeoisie (Owners) “Have-nots” were the proletariat

(Working Class)

Eventually proletariat would take control of means of production Set up classless society