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What economic theories developed from the industrial revolut

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Marisa Michealson

on 30 October 2013

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Transcript of What economic theories developed from the industrial revolut

What economic theories developed from the Industrial Revolution?

Before the Industrial Revolution
There was no major economic change
Class systems still controlled the society
Centrally planned economy
Government controls all production
common ownership - no competition
No supply and demand
Economic equality
Similar to Socialism
Instead of Government control, people control (working class overthrow the ruling class)
Created by Carl Marx (known as Marxism
"From each according to his ability, to each according to his need."
Free Market
People can own their own property or business without government intervention
supply and demand
During the Industrial Revolution
This was a time of economic growth
Industry was booming but needed to be managed in some way
Economic Theories
Definition of Economy: The process or system by which goods and services are produced, sold, and bought in a country or region (Merriam Webster Dictionary).
The U.S. and Britain both have mixed market economies which means they have a mix of three economies though both have adopted many free market principles.
The Industrial Revolution was the first time that there was ever real concern for the economy. Before, people were self-reliant. During the Industrial Revolution and after people were dependent on each other for trade.
Europe and The United States were primarily agricultural societies.
There was not a lot of industry
All of the political power was in the hands of aristocracy
Class systems defined how much power you had
The world hadn't yet experienced any major economic growth until the Industrial Revolution
The economy had been in stagnation until the new industries and innovations
People were no longer as self-reliant, they worked to earn money
Money became more and more important to the average person
Innovation caused fluctuations in the economy unlike agriculture
People were forced to find jobs
Consumerism became very important to companies
Economic growth
People relied on industries to provide them with products
Several economic theories were created to help companies manage this new economic change
An economy is supposed to make the management of production and distribution of goods easier
A good economy should benefit the people by making sure goods are cheap and of good quality
Population size, structure of the population, geographical and sociocultural factors will effect the demand
Factors like the amount of labor, capital, and natural resources as well as organization are going to effect how a company is able to supply
Government would theoretically distribute funds equally (economic equality) which would diminish class system, get rid of poverty, and reduce the need for money
Focuses on cooperation rather than competition
Government might not understand and meet the demands of the people as well as individual businesses could
With no competition, price could go up and quality could go down
People control the Government, less rebellion
Equality, good working conditions, housing
People own all the companies
Again, no competition lowers quality, increases price
If everyone is equal and there is not a huge difference between rich and poor, there is less incentive to work
Competition means that goods will be cheaper and better quality
People can own property and government will protect their rights
Supply and demand means that people will have just as much of a product as they need
People might abuse the freedoms that capitalism provides (monopoly)
Class division, poverty becomes a huge problem
Government has some control over the adverse effects of a free market economy but there is still competition between companies so we still have the benefits of capitalism
Some believe that the government has too much control
Class division is out of proportion especially in the U.S.
Based on Jim Harvey's speech structures
Full transcript