Capitalism & Socialism

laissez-faire

the policy of letting businesses and the economy run itself without government interference

capitalism

an economic system where the means of production are privately owned and money is invested to make a profit

Adam Smith

promoted laissez-faire and defended free markets in his book The Wealth of Nations (1776)

3 main ideas presented in The Wealth of Nations (1776)

1. people work for their own good

2. competition forces people to make better products

3. enough goods would be produced at the lowest price to meet demand

Thomas Malthus

wrote An Essay on the Principle of Population (1798), argued that population increased faster than food supply

David Ricardo

wrote Principles of Political Economy and Taxation (1817), argued that there would always be a poor underclass

utilitarianism

introduced by Jeremy Bentham, stated that the government should try to promote the greatest good for the greatest number of people

unions

voluntary associations of workers that fought for reforms and negotiated with employers to improve working conditions and increase wages

strike

refusal to work if employers didn’t meet the workers’ demands

John Stuart Mill

leader of utilitarianism who fought for policies to improve workers’ lives and favored women’s rights

Robert Owen

utopian socialist who created model communities in Scotland and Indiana

socialism

economic system where there is limited private ownership, means of production are owned by individuals and businesses and is used for everyone’s welfare

a planned system of economy

argued for government control in industries to promote equality and help workers

utopian socialism

form of socialism where socialists created experimental communities to create a utopia, or a perfect society

Karl Marx

wrote The Communist Manifesto with Friedrich Engels, challenged capitalism as he believed it exploited the proletariat, native country was Germany but lived in London in exile from 1843 for the rest of his life

Jane Addams

college-educated woman who ran a settlement house in Chicago to improve the lives of poor slum residents

William Wilberforce

member of Parliament who led the fight for abolition of slavery throughout the British Empire

proletariat

members of working class, Marx believed the capitalist system exploited them

communism

extreme form of socialism with NO private ownership, all means of production owned by the people, all goods and services are shared equally

favored proletariat but was led under totalitarian rule and restricted basic rights

4 basic premises of socialism

1. capitalism was unfair to the working class as owners exploited the workers by enjoying the wealth earned at their expense

2. instead of private ownership, there should be some collective ownership where all workers own the means or the state owns and operates it in “best interests” of the citizens

3. wealth of society should be equally distributed based on a predetermined plan

4. socialist economic system would change human nature for the better

steps for a successful Communist revolution

1. organize the proletariat into a unified class

2. make the proletariat the ruling class - win the battle of democracy and overthrow the bourgeoisie

3. establish the Dictatorship of the Proletariat

4. eliminate the bourgeoisie and all elements of capitalism

5. centralize all means of production (owned by govt or state)

6. classless society will emerge - D of P will disappear & everyone will be “equal”

bourgeoisie

the class that owned the wealth in a society as a result of the Industrial Revolution

Horace Mann

favored free public education for all children, based in Massachusetts

Saint-Simon

first to propose equality of opportunity based on ability

Charles Fourier

proposed a formula for distributing wealth in a community

scientific socialism

applying historical trends to the development of socialism