Unit 2 Notes 4:

Economic Effects of the Industrial

Revolution
After England, what other countries were next to
become industrialized?
United States
Netherlands (The Dutch)
France
Germany
What long term effect did industrialization have
on Germany?
Germany became an industrial and military
giant.
Why did many countries in Europe have trouble
industrializing?
Social structure and geography
The United States industrialization began in
what industry?
The textile industry
What contributed to urbanization in the United
States?
The development of the railroad system
Explain the importance of the railroads.
Allowed cities like Chicago and Minneapolis to
prosper by selling their products to the rest of
the country
What was the economic system that caused the
Industrial Revolution?

Capitalism: An economic and political system
in which a country's trade and industry are
controlled by private owners for profit.
According to Smith, economic liberty
guaranteed economic progress. Smith was a
major proponent of capitalism and laissez-faire
economics.
Explain Laissez-Faire economics
The economic policy of letting owners of
industry and business set working conditions
with out government interference.
This is also known as a Market or Free Market
economy.
Smiths views on the working poor
He believed that a permanent underclass would
always be poor.
In a market system, if there are many workers
and abundant resources, then labor and
resources are cheap.
If there are few workers and few resources, then
they are expensive. Smith believed that wages
would be forced down as population increased.
What types of economies were created in reaction to the
negative working and living conditions of the Industrial
Revolution?

Utilitarianism
Utopianism
Socialism
Communism
Utilitarianism
Created by Jeremy Bentham, the idea that
government should try to do the greatest good
for the greatest amount of people

Utopianism
An economic system which aims to
create a perfect society for all people
Socialism
The factors of production (land, labor, capital)
are owned by the public (government) and
operate for the welfare of all.
Socialist philosophy
The government should actively plan the
economy rather than depending on free market
capitalism to do the job.
Public ownership would promote equality and
help the workers.
Pure communism
The workers would control the government and
after a period of communal living and
education, the government would go away as a
classless society developed.
Karl Marx
Creator of Marxism (later
referred to a Communism).
Believed the workers would
eventually overthrow the
owners. The [workers] have
nothing to lose but their
chains.- Karl Marx
Who are the bourgeoisie? Who are the
proletariat?
The middle class (employers). Haves




The working class. Have nots
What did Marx predict for the future of
capitalism?
The capitalist system would eventually destroy
itself. Large factories would drive smaller ones
out of business leaving a small number of
manufacturers in control of all the wealth.
Why Marxs predictions have yet to happen
Believed economic forces alone dominated
society
Did not factor the forces of nationalism,
religion, ethnic loyalties, and the desire for
democracy
The gap between the rich and the poor never
grew as large as Marx predicted