World History / Unit 9: Industrialization and Imperialism
9.4 New Economic Ideas
Notes
Thinkers disagreed about how to deal with the problems of industrial society.
- Capitalism: private individuals own businesses and the means of production and compete for profit. Adam Smith argued for laissez-faire (little government interference).
- Thomas Malthus warned that population would grow faster than the food supply.
- Utilitarianism (Jeremy Bentham, John Stuart Mill): laws should promote the greatest good for the greatest number; Mill supported some government action to help workers and women's rights.
- Socialism: society or the government should own major industries so that wealth is shared more equally.
- Karl Marx and Friedrich Engels wrote The Communist Manifesto (1848). They argued that history is a struggle between classes, that workers (the proletariat) would overthrow owners (the bourgeoisie), and that a classless communist society would follow.
| System | Who owns business | Main goal |
|---|---|---|
| Capitalism | Private individuals | Profit through competition |
| Socialism | Society or government | Fair distribution of wealth |
| Communism (Marx) | All people, no classes | End class struggle |
Practice
Read the excerpt from The Communist Manifesto (Samuel Moore translation, 1888): "The history of all hitherto existing society is the history of class struggles." Marx and Engels believed that:
They predicted workers would overthrow the owners of industry.
A factory owner argues the government should not regulate wages or prices. This owner supports:
Laissez-faire means leaving the economy alone.
Under socialism, major industries would be:
Socialists wanted shared ownership to reduce inequality.
Ready for more? Take the Unit 9 test.