Classical Economic Theories and Industrial Social Change

Classical Economic Theories and Social Change

Malthusian Theory of Population Growth

Thomas Malthus theorized that population grows at a geometric rate (e.g., 2, 4, 8, 16...), while food increases at an arithmetic rate (e.g., 1, 2, 3, 4...). Eventually, the population will exceed the capacity of food production. Population will rise until a limit to growth is reached. Once this happens, people will fight for resources.

David Ricardo and the Iron Law of Wages

David Ricardo argued that population affects the economy. Wages are determined by supply and demand: high labor supply leads to low wages; low labor supply leads to high wages.

Humanitarianism and Utilitarian Philosophy

• Humanitarianism: People who seek to help others.
• Jeremy Bentham (Utilitarianism): The purpose of government is to create the greatest happiness for the greatest number of people.
• John Stuart Mill: Government must protect children and improve working and living conditions.

Contrasting Economic Systems

Capitalism

Private ownership of industry. Freedom of competition results in unequal economic classes.

Socialism

Government intervention in industry. The goal is to bring economic equality, aiming for a classless society.

Communism

Government control of industry. The goal is to eliminate economic inequality, aiming for a classless society with weapons.

The Social Impact of the Industrial Revolution

The Factory System and Working Conditions

The factory system was a major change for European workers.

• Factory work became less skilled.
• Factory conditions were dirty, dangerous, and unhealthy.
• Workers worked long hours (12–16 hours per day).
• Factory workers were not paid well; women and children were paid less than men.
• Owners required workers to “clock in” and limited their breaks to increase production.

The Rise of Coal Mining

The invention of the steam engine increased demand for coal. Coal production grew from 5 million tons in 1750 to 23 million tons in 1830.

Men, women, and children were used in mines. Mines were unhealthy and dangerous:

• Common risks for workers included lung disease, poison gas, drowning, explosions, and cave-ins.

Child Labor During Industrialization

The Industrial Revolution profoundly changed the lives of many children:

• Many children in the cities worked in factories, brickyards, or mines.
• Living in cities was expensive; poor families needed their children to work.
• Child workers earned only 10% of an adult wage and were often beaten.

Urbanization and Slum Conditions

Urbanization increased dramatically. The increase in population and the enclosure of farms forced people to move to cities.

• Poor families lived in poorly constructed apartments built by factory owners called tenements in neighborhoods called slums.
• Many families shared cramped apartments that lacked running water or sanitation.
• Hard factory jobs and disease led to short life expectancies for urban workers.