The 1800’s: Four Ways Classical Liberalism Impacted 19th Century Society

1.  Laissez-Faire Capitalism: 

• Laissez-faire is a French term for “let it be”; in this case it refers to an economy that is run by the individual without a lot of government involvement.

• It emerged from physiocratic theories, which were critical of mercantilism

• One of the most well-known supporters of this type of economy was Adam Smith

• This economic system, involving a free market and a limited government role, is the economic system associated with classical liberalism as it spread around the world after the Industrial Revolution began.

2. Industrial Revolution -- Needs for Industrialization (Reasons industrialization happened in Great Britain First)

• Britain was (somewhat) stable -- slow progression towards democracy

• Britain was not physically affected by the Napoleonic Wars

• Access to Water - As an island nation it was easy to ship goods

• Access to capital - Britain had lots of aristocrats and middle-class people looking for places to invest money.

• New Markets - Britain had the largest empire in the world

• A large workforce that would work cheap - The Enclosure Act ensured lots of peasants would do the work.  Enclosure led to rapid urbanization.

  • The Enclosure Act took land that was common to many farmers and made it private

• Circa 1750 in Britain -- cotton replaced wool as the material used to make clothing

• This led to major changes in methods of production: the factory system replaced the domestic system as the demand for goods increased and the new idea of mass production took hold 

  • The Factory system is manufacturing using machinery and division of labor.

• Industry soon took over from agriculture as the major resource in Britain, and the move from a traditional economy to that of a capitalist one began.

3. Class systems

• Class Structure is the division of a society  into different classes of people, usually based on income or wealth

• Prior to the industrial revolution, wealth was attained by owning land, and wealth meant power and prestige

• Therefore, the aristocrats who owned land had all of the power prestige.

• The nouveau riche were born in the industrial revolution and they began to challenge the aristocracy for a place in society.  They detested any form of the older mercantile system.

Consequences for the Average person: While the nouveau riche and the aristocracy fared well in the Industrial Revolution, the laborers at the time faced horrendous living and working conditions in the slums and factories.

• These conditions were due to rapid urbanization and mechanization.

4. Limited government involvement

• The factory owners during the Industrial Revolution believed that government interference in their businesses would hamper their levels of production.

• Because these people tended to be the most powerful people in society, they were able to influence the government, and limited government involvement predominated the era.

• By the late 1800s, public opinion had started to shift and the government did get more involved in business in terms of workers’ rights, etc.