CHAPTER 13 Section 1:Origins of the Industrial Revolution Section 2:The Factory System Section 3:New Methods and Business Organizations Section 4: Living.

CHAPTER 13

Section 1: Origins of the Industrial Revolution

Section 2: The Factory System

Section 3: New Methods and Business Organizations

Section 4: Living and Working Conditions

Section 5: Socialism

The Industrial Revolution

SECTION 4

13.4 Bell Ringer:What were the theories of economists and philosophers during the Industrial Revolution?(see next slide for chart)

Living and Working Conditions

SECTION 4Living and Working Conditions

Economist Theories

Adam Smith

Thomas Malthus

David Ricardo

Jeremy Bentham

John Stuart Mill

SECTION 4Living and Working Conditions

REVIEW!What is mercantilism?

Physiocrats

-believed that the wealth of nations was derived solely from the value of land agriculture or land development.

-denied that commerce and manufacturing produce riches. -advocates of free trade, rejecting the "balance of trade" theory

Remember the Philosophes

in the Enlightenment? We’re the guys that

liked to talk about

economics.

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Adam SmithThe Wealth of Nations 1776

Considered the founder ofclassical economics

Two natural laws govern all business & economic activity:

1. Law of Supply & Demand

2. Law of Competition

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Supply and DemandIf an item is scarce and EVERYONE wants it . . . .

People will pay a high price for it and profits do what?

$299 32GB

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CompetitionAs manufacturers compete – they MUST reduce their prices …

BUT if they cut prices too much … what could happen?

Supply would then decrease … and prices would do what?

What’s the lesson here?

You MUST be efficient -

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Free EnterpriseMercantilist laws & regulations hinder natural economic forces.

Competition should be unrestricted by laws, regulations, or government controls.

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Other economists ….

Thomas Malthus David Ricardo

The Principle of Population1798

“iron law of wages”1817

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Principle of PopulationDespite famines, epidemics, and wars, people still multiplyfaster than the food supply increases.

Malthus believed that human misery and poverty is inevitable…

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“iron law of wages”

Supply and demand of labor determine wages ….

When there is a surplus of labor (population growth), wages go down.

When there is a shortage, wages go up.

Working class poverty is inevitable.

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These theories supported EMPLOYERS – they want labor asCHEAP as possible ….

But they also didn’t want what?Gov’t interference!

Laissez-faire“Let it be”

“Leave things alone”

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From the Middle Ages until well into the 1800s,craft and merchant guilds regulated quality andprices of goods along with working hours andwages.

In the early 1800s, trade became almostcompletely unregulated …..

Laissez-faire!

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Reformers ARISE!

People argued that business could NOT beleft entirely alone to do as it pleased.

Humanitarians are people who work toImprove the conditions of others - urged reforms.Ministers preached against the selfishpractices of businesses.

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Charles Dickens wrote

David Copperfield

Oliver Twist

Used his novels to attack greedy employers.David Copperfield – described his own childhood.

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Jeremy Bentham –social reformer

utilitarianismA law was useful, therefore good, if it led to “the greatest happiness of the greatest number” of people.

People should educate themselves.

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John Stuart Mill

Government should work for the good of all citizens. Governments should protect working children and improve housing and factory conditions.On the Subjection of Women 1869

…support for women’s rights.

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Early Reform LawsFactory Act of 1802

shortened hours and improved conditions for children in cotton mills

Factory Act of 1833Established paid inspectors to inspect factories on child labor

Ten Hours Bill 1847Limited working hours to 10 per day for women and children Factory owners will extend the 10-hour day to all employees

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To improve their lives and working conditions, workers banded together to demand reforms…

Known as collective action

strikes

unions

When a large group of workers refuse to work, until their demands are met.

When workers organize and form associations

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SECTION 4Living and Working Conditions

Workers’ Associations (unions) were illegal in many countries.

Workers who united to fight for higher wages, shorter hours,and better working conditions could be imprisoned!

1870s Parliament passed laws legalizing strikes.