America’s Industrial Revolution made her the world’s greatest economic power BUT…….what was “ The Industrial Revolution”? WHY did it happen ? WHAT were the effects ?
Alvin Toffler The Three Waves Wave Theory of Civilization FIRST WAVE: Agricultural Revolution 10,000 BC “Traditional Economy” SECOND WAVE: Industrial Revolution 1750 AD “Free Market Capitalism Economy” “ Socialist Command Economy” THIRD WAVE : Information Revolution 1950 AD
THE WEALTH OF NATIONS Adam Smith Published: 1776 <ul><li>First of the Classical Economists </li></ul><ul><li>Division of Labor “ Pin Factory” Example </li></ul><ul><li>“ Invisible Hand” of the Free Market </li></ul><ul><li>Sets Prices </li></ul><ul><li>Allocates goods </li></ul><ul><li>Free Trade not Mercantilism is best </li></ul><ul><li>Individuals acting in self-interest promotes the general welfare </li></ul><ul><li>Established the study of Economics as separate from Philosophy </li></ul>
ECONOMICS: The Dismal Science Macroeconomics: National or Global markets Microeconomics: Economic behavior of people and companies Study of how societies allocate scarce resources to meet unlimited needs
THE INDUSTRIAL REVOLUTION WAS BASED ON NEW TECHNOLOGIES AND ORGANIZATIONAL TECHNIQUES Factories Steam Power - later gas, electricity Wage Labor - workers not craftsmen Division of Labor - Specialization Mass production Uniformity Time orientation not task Competition drove down prices Monopolies
EFFECTS GOOD BAD Massive GDP growth Pollution Urbanization Slums Cultural Revolution Social Unrest Science Crime Social Progress Loss of Old Values Wealth Inequality Immigration Corruption
Why in Britain and America ? Liberty - small government Social Mobility - less restrictions High rates of Literacy Access to natural resources – coal, oil, water Free Trade ideology Respect for property and right of contract Functioning legal system Patents reward inventors - but not too much Scientific Revolution & The Enlightenment