Chapter 25
25.3
25.4
During the War of 1812, Britain blockaded the United States, trying to keep it from engaging in international trade. This blockade forced the young country to use its own resources to develop independent industries. Those industries would
manufacture the goods the United States could no longer import.
The term laissez faire refers to the economic policy of letting owners of industry and business set working conditions without interference. Adam Smith, a professor at the University of Glasgow, Scotland, defended the idea of a free economy, or free markets, in his 1776 book The Wealth of Nations. Capitalism is an economic system in which the factors of production are privately owned and money is invested in business ventures to make a profit.
Utilitarianism English philosopher Jeremy Bentham modified the ideas of Adam Smith. In the late 1700s, Bentham introduced the philosophy of utilitarianism.
Marx called this final phase pure communism. Marx described communism as a form of complete socialism in which the means of production—all land, mines, factories, railroads, and businesses would be owned by the people. The Future According to Marx Marx believed that the capitalist system, which produced the Industrial Revolution, would eventually destroy itself
In socialism, the factors of production are
owned by the public and operate for the welfare of all. The writings of a German journalist named Karl Marx introduced the world to a radical type of socialism called Marxism.
In 1813, Francis Cabot Lowell of Boston
and four other investors revolutionized the American textile industry. They mechanized every stage in the manufacture of cloth.
Elements of a modern economic system developed during the Industrial Revolution. Building large businesses like railroads required a great deal of money. To raise the money, entrepreneurs sold shares of stock, or certain rights of ownership.great deal of money.
A corporation is a business owned by
stockholders who share in its profits but are not personally responsible for its debts. Corporations were able to raise the large amounts of capital needed to invest in industrial equipment.
To press for reforms, workers joined together in voluntary
labor associations called unions. Unionization A union spoke for all the workers in a particular trade. If factory owners refused these demands, union members
could strike, or refuse to work.
European businesses yearned to adopt the “British miracle,” the result of Britain’s profitable new methods of manufacturing goods. But the troubles sparked by the French Revolution and the Napoleonic wars between 1789 and 1815 had halted trade, interrupted communication, and caused inflation in some parts of the continent
Belgium led Europe in adopting Britain’s new technology. It had rich deposits of iron ore and coal as well as fine waterways for transportation. As in the United States, British skilled workers played a key role in industrializing Belgium.
Germany was politically divided
in the early 1800s. Economic isolation and scattered resources hampered countrywide industrialization. Instead,
pockets of industrialization appeared, as in the coal rich Ruhr Valley of west central Germany.
Industrialization widened the wealth
gap between industrialized and nonindustrialized countries, even while it strengthened their economic ties.
Between 1700 and 1900, revolutions in agriculture,
production, transportation, and communication changed the lives of people in Western Europe and the United States.
Noah Calhoun and Nathan Barrilleaux