Who is considered the father of classical economics, Capitalism, and the concept of Laissez-Faire?
Adam Smith, a product of the Scottish Enlightenment, gave birth to classical economic theory by publishing The Wealth of Nations in 1776.
The Wealth of Nations introduced the concept of "Laissez-Faire" which emphasized that a governmental hands-off approach towards regulating the economy is best.
By allowing individuals to pursue their own self-interest, the market will be balanced and efficient.
Identify the technological developments that led to the Agrarian Revolution and their long term impact.
The seed drill, fertilizer, and the Enclosure movement led to a surplus of food. This stabilized and increased the population. Since fewer workers were required to farm, individuals sought work elsewhere. The increased workforce was a necessary precurses to the Industrial Revolution.
According to Marx and later thinkers, the bourgeois was the class who owned the means of production and controlled capital. According to Marx, the bourgeois took advantage of the hard work of the proletariat.
During the first half of the 19th century, inland transportation costs for British manufactured and agricultural goods plummeted, lowering their cost for both British and overseas buyers. Why?
By 1850, Britain had more than 6,000 miles of railroads, powered by steam-driven locomotives. Shipping goods via railroad was inexpensive, and the lower cost of British products allowed industrialists to compete successfully in international markets.
An economic system initially described by Adam Smith in which businesses and industries are owned privately by individuals in pursuit of profits, rather than being owned by the state. The United States economy is mostly capitalist and the benchmark for such a system.
What mineral powered the early steam engines?
Early steam engines were powered by coal. Britain possessed an abundance of coal, providing the country with cheap fuel with which to ignite the Industrial Revolution.
Coal is notoriously dirty, and few environmental safeguards existed in 19th-century Britain. Rivers and streams were polluted, and in the new industrial cities like Manchester and Birmingham, the air was filled with smoke. Even the famed London fog was primarily an outgrowth of the smoke-filled air, as moisture linked itself to coal dust.
Communism refers to a system of government in which the government owns the means of production.
Under a pure communist system, the government owns all land and factories, as opposed to a pure capitalist system, in which individuals own the means of production.
Resources and materials are divided and distributed evenly amongst the population. Competition is discouraged, instead, individuals are productive so they can contribute towards the greater good of society as a whole.
Who wrote The Communist Manifesto in 1848?
In 1848, Karl Marx and Friedrich Engels wrote and published The Communist Manifesto.
The Communist Manifesto laid out how the capitalist system would be replaced by socialism and eventually communism. Marx and Engels emphasized that history was a series of class struggles. They encourage "workers of the world to unite" and overthrow the oppressive bourgeois.
Explain how the enclosure movement enhanced farming production.
A movement in Great Britain from 1750-1860 where individuals fenced off and enclosed plots of land to enhance agricultural production.
Prior to the enclosure movement, farmland was only utilized during the growing season and was used for animal grazing during offseason months. By enclosing land, farmers could own plots and ensure that they were nutrient rich and ready for cultivation.
Drawn by the prevalence of jobs, British cities experienced exponential growth in population during the Industrial Revolution. What was the effect of rapid urbanization on living conditions in the cities?
Cities became increasingly crowded, and neither regulation nor construction could keep pace. The new urban areas lacked proper sanitation and housing, and the prevalence of coal dust and smoke coated everything in a constant state of filth and contributed to lung diseases.
Explain the Impact of the Industrial Revolution.
- The factory system is born
- Mass production and division of labor increases productivity
- Laissez Faire economic theory introduced
- The Middle Class is born
- Urbanization occurs
- Poor working conditions in factories
- A lack of government regulation led to the birth of Labor Unions.
Identify and explain the factors that caused the Industrial Revolution.
The industrial revolution occurred when the steam engine was invented. However, the mass production of products and the success of the factory system could only happen after the Agrarian Revolution created a surplus of people and food in Great Britain. In addition, the British had desirable geographic conditions and easy access to waterways, a large middle class, money to invest, and most importantly an abundance of raw materials, mainly coal.
An economic system in which the government is hands off the economy. First introduced by Adam Smith in his book The Wealth of Nations, Smith believed that allowing individuals to pursue personal profits would benefit the larger economic market.
What is mercantilism?
Mercantilism is an economic theory, which claims that because the world's wealth is limited, trade is a "zero-sum" game, i.e. that the balance of trade in one nation's favor is another nation's loss. Mercantilists believed that trade created wealth.
Mercantilism dominated European economic thought from the Renaissance until the late 1700s and was practiced by all the major European powers.
What is a nation-state?
A nation-state is a form of political society that usually possesses three characteristics:
- Geographic boundaries
- Common culture and language
According to Marx and later thinkers, the proletariat was the working class -- those who worked in the factories and contributed their labor in a capitalist society.
Socialism is an economic and political theory in which the means of production is owned by the community as a whole.
A socialist society is a blend of Capitalism and Communism. The government owns and controls some economic factors while others are owned by the public. Marx viewed it as a transitional government that would eventually fully convert to communist principals.
What 1769 invention displaced rivers and streams as the main power source for British factories?
In 1769, James Watt patented an improved steam engine, which replaced the rivers and streams which had served as the main power source for British textile factories.
British textile production, no longer hampered by the speed of water, skyrocketed to 2 billion yards of cotton fiber per year in the 1850s. In addition to textile manufacturing, the steam engine had all sorts of other applications ranging from mining to shipping.
The right to vote in a political election.
Explain the views of Thomas Malthus on population.
Malthus was an English economist who theorized that war, famine, and disease were necessary and natural checks on the population. Malthus believed without these checks, there would be too many people and as a result, resources would be depleted, leading to chaos and extreme conflict.
How did Adam Smith view the government's role in the economy?
In The Wealth of Nations, Adam Smith argued that the government's only role was to defend the state from external enemies, protect the citizens' property, and enforce contracts.
In advocating a laissez-faire ("hands-off" or "let it be") economic approach, Smith argued that government interference in the market hurt trade.