Changing the Industrial Changing the Industrial WorldWorld

Why did Capitalism cause reform movements?

Laissez-Faire Economics/CapitalismLaissez-Faire Economics/Capitalism•Laissez-Faire is an economic philosophy that allowed owners to set working conditions without interference from the government•Adam Smith defended Laissez-Faire in his book The Wealth of Nations

Adam Smith

Capitalist

• Smith argued a free-market, with private ownership & no govt regulation would create competition, causing better products & wages

• Prices would be regulated by supply & demand

• Smith’s ideas become known as capitalism• Many argue unregulated capitalism will not protect workers & encourages greed

Rich Owners

Poor workers

UtilitarianismUtilitarianism Utilitarians founded by Jeremy Bentham, argued people should judge ideas on usefulness, creating greatest good for greatest num.Utilitarians argue Capitalism did not benefit the greatest number of people, so the govt should regulate it1830s: John Stuart Mill now takes over Utilitarian movement

John Stuart Mill

Mill writes unregulated capitalism is not creating happiness but harm to the workers

To fix the problem, Mill felt the government should create an equal division of profits

Mill also favored Women’s rights, education reform & prison reforms

Mill writes about happiness & harm principle, gov should promote things that create greatest happiness and regulate harmful things

UtopianismUtopianismBritish factory owner Robert Owen was shocked by the misery and poverty of the working class Owen built houses near his factory in Scotland and rented them out to his workers for low ratesOwen prohibited children under 10 from working in the factories and provided free schooling1824: Owen traveled to the US and tried to set up a Utopian system in New Harmony, Indiana but it only lasted three years

Robert Owen

Utopian