The Making of the Modern World
Capitalism
★ Based on the creation of wealth
★ Profit for a few
★ Laissez Faire: free interaction between private individual corporations (no
government intervention)
★ People work for wages
★ Goods and services are sold for a profit
★ Competition between those who are providing goods and services. The means for
creating those goods are privately owned.
★ Unequal social classes
○ Class struggle
★ Evolved from the Industrial Revolution
★ FEUDALISM became obsolete because there was no need to be a landowning noble to
gain wealth in this area.
○ Allowed people from different backgrounds (or classes) to become wealthy
○ Anyone who could raise enough capital could set themselves up in business
○ Called “entrepreneurs”
○ System of economics in most countries
★ THE INVISIBLE HAND:
○ Keeps market fair
■ Example: if a product is too expensive, another alternative would enter
the market as the former would not sell
■ If a worker was not paid enough or well, he would find another job that
paid more
■ Gives customer or employee the opportunity to move elsewhere if they
were not happy
Socialism
★ Idea that all people in society should have equal opportunity to share in the wealth that is
created in the economy
★ The state (or government) manages and allocates resources so that they are distributed
equally among citizens
○ E.g. China
★ Government owns/operates the means of production
○ E.g. factories/land
★ The first socialist government: Australia
○ Worked to protect worker’s rights
○ Minimum wage/state hospitals/ state schools
★ Equal distribution of wealth
★ Inequality spread because of capitalism >
, ★ TRADE UNIONS:
★ KARL MAX:
○ German philosopher
○ Thought of socialism (but wanted it to develop to communism)
○ Made note of the divide between social classes
■ betwwend individual/employer and employee
Capitalism vs Socialism
Capitalism Socialism
★ Did not need to become noble to ★ First used in 1827 by Robert Owen to
become wealthy describe a system that could improve
○ But did have disparities the appalling living and working
(inequalities) between the conditions of the Industrial Revolution.
wealth of classes ★ Production are controlled by the state
○ Overproduction and ★ Motivation: wealth for all
exploitation of workers ★ PROS:
★ Production is controlled by private ○ Citizens receive only what they
individual or private companies need but earn a wage
★ Motivation: profit for few. ○ Elimination of social classes
★ PROS: ★ CONS:
○ Competition between ○ Does not reward individual for
manufacturers work
↓ ○ Does not encourage to think out
of the box
○ Generate more wealth and
advancements for society ↓
○ No inspiration to generate more
advancements
↓
○ No more wealth
↓
○ Low production
↓
○ Poverty
★
Capitalism
★ Based on the creation of wealth
★ Profit for a few
★ Laissez Faire: free interaction between private individual corporations (no
government intervention)
★ People work for wages
★ Goods and services are sold for a profit
★ Competition between those who are providing goods and services. The means for
creating those goods are privately owned.
★ Unequal social classes
○ Class struggle
★ Evolved from the Industrial Revolution
★ FEUDALISM became obsolete because there was no need to be a landowning noble to
gain wealth in this area.
○ Allowed people from different backgrounds (or classes) to become wealthy
○ Anyone who could raise enough capital could set themselves up in business
○ Called “entrepreneurs”
○ System of economics in most countries
★ THE INVISIBLE HAND:
○ Keeps market fair
■ Example: if a product is too expensive, another alternative would enter
the market as the former would not sell
■ If a worker was not paid enough or well, he would find another job that
paid more
■ Gives customer or employee the opportunity to move elsewhere if they
were not happy
Socialism
★ Idea that all people in society should have equal opportunity to share in the wealth that is
created in the economy
★ The state (or government) manages and allocates resources so that they are distributed
equally among citizens
○ E.g. China
★ Government owns/operates the means of production
○ E.g. factories/land
★ The first socialist government: Australia
○ Worked to protect worker’s rights
○ Minimum wage/state hospitals/ state schools
★ Equal distribution of wealth
★ Inequality spread because of capitalism >
, ★ TRADE UNIONS:
★ KARL MAX:
○ German philosopher
○ Thought of socialism (but wanted it to develop to communism)
○ Made note of the divide between social classes
■ betwwend individual/employer and employee
Capitalism vs Socialism
Capitalism Socialism
★ Did not need to become noble to ★ First used in 1827 by Robert Owen to
become wealthy describe a system that could improve
○ But did have disparities the appalling living and working
(inequalities) between the conditions of the Industrial Revolution.
wealth of classes ★ Production are controlled by the state
○ Overproduction and ★ Motivation: wealth for all
exploitation of workers ★ PROS:
★ Production is controlled by private ○ Citizens receive only what they
individual or private companies need but earn a wage
★ Motivation: profit for few. ○ Elimination of social classes
★ PROS: ★ CONS:
○ Competition between ○ Does not reward individual for
manufacturers work
↓ ○ Does not encourage to think out
of the box
○ Generate more wealth and
advancements for society ↓
○ No inspiration to generate more
advancements
↓
○ No more wealth
↓
○ Low production
↓
○ Poverty
★
