The document discusses the rise of new economic and political ideas in response to capitalism and laissez-faire economics in the 18th-19th centuries. It describes laissez-faire economics and how Adam Smith's ideas influenced capitalism. As populations and inequality grew, socialists advocated public ownership and greater protections for workers. Utilitarianism aimed to maximize welfare, while Marx argued capitalism divided society into the bourgeoisie and proletariat, and would be overthrown by communism as inequality increased further. Communism entailed complete public ownership with no private property and equal sharing of goods.

1. New ideas and the rise of socialism

2. Laissez faire economics Laissez faire is the idea of letting owners of industry and business set working conditions without interfering. This means a free market that is unregulated by government. Laissez faire ideas came from the French during the Enlightenment. They didn’t think that nations could become wealthy if they had to pay heavy taxes on goods. They said government regulation only hurt the growth of wealth rather than helping it. Adam Smith a professor wrote a book called The Wealth of Nations in which he said economic freedom meant prosperity.

3. capitalism Capitalism is an economic system in which money is invested in business ventures with the goal of making a profit. This idea originated from Adam Smith and the Industrial Revolution was based off this idea. Thomas Malthus and David Ricardo supported Adam Smith’s ideas. Malthus believed that as the population increased if there were no wars or epidemics to kill of people that there would always be a large poor population. Ricardo believed Malthus’s idea that there would always be a poor underclass. He said as population increases there will be more unskilled workers available and that would drive prices down. He didn’t believe in things like a minimum wage or better working conditions.

4. Socialism While some people supported capitalist ideas others thought wealthy people or the government should step in to help those people who are struggling. Socialism is when the factors of production are owned by the public and operate for the welfare of all. There are many ideas that fall under the umbrella of socialism.

5. Utilitarianism An English philosopher named Jeremy Bentham modified the ideas of Adam Smith and turned it into utilitarianism. Utilitarianism is the belief that the government should try and promote the greatest good for the greatest number of people. John Stuart Mill picked up on Jeremy Bentham’s ideas later on. He promoted things such as change in education and more rights for women. He thought capitalism should be regulated.

6. Communist manifesto Karl Marx was a German journalist who introduced a radical new type of socialism. Marx, along with Friedrich Engels wrote their ideas in a pamphlet called The Communist Manifesto. His main argument was that human society has always been divided into two classes, the “haves” and the “have nots.” Bourgeoisie were the middle class and wealthy. They controlled the factors of production, and were the “haves.” Proletariats were the poor workers, who had no way to escape from the system, they were the “have nots.” Marx and Engels said the Industrial Revolution made the divide between the bourgeoisie and the proletariats even greater and this would eventually result in the proletariats overthrowing the government.

7. Communism Marx called his idea communism. Communism is a form of complete socialism in which the means of production (all land, mines, businesses, factory, etc) would be owned by the people. There would be no more private property. All goods and services would be shared equally.