Capitalism is an economic system where money is invested in business ventures to make a profit, while communism is a form of socialism where the means of production are owned by all people. While capitalism fueled the Industrial Revolution and increased standards of living for some, it also led to poor working conditions and unequal wealth distribution. This dissatisfaction gave rise to economic philosophies like socialism and communism advocated by thinkers like Karl Marx, which called for public ownership and redistribution of wealth.

1. Economic Philosophies
Capitalism and Communism

2. What is Capitalism?
A)“..An economic system in which
money is invested in business
ventures with the goal of making a
profit”

3. • B) Role of market competition
and entrepreneurial abilities
• C)Principles of laissez faire “let
people do as they please”

4. Capitalism and its Impacts
A)• The Wealth of Nations Adam Smith-
defended free economy, claimed that
government need not interfere in the
economy.
B)• Role of market competition and
entrepreneurial abilities

5. Adam Smith – Wealth of Nations

6. C)• Impact on standard of living and the
growth of the middle class
D)• Dissatisfaction with poor working
conditions and the unequal distribution of
wealth in society
•

7. Stereotype of the Factory
Owner

8. • What were some theories opposed to
capitalism?

9. • Tocqueville – French Philosopher
• Consider what is happening among the
working classes. Do you not see
spreading among them……. Ideas not
only to overturn gov’t, but society itself?

10.  starter activity
‘The Silent Highwayman’, Punch magazine, 1858. What
is the artist trying to say about living conditions in
Victorian London?

11. • Socialism and communism
A)• Karl Marx’s Communist Manifesto
(written with Friedrich Engels) and Das
Capital
•

12. B)• Response to the injustices of
capitalism
C)• Importance of redistribution of wealth
to the communists

13. The Socialists:
Utopians & Marxists
 People as a society would operate and own the
means of production, not individuals.
 Their goal was a society that benefited
everyone, not just a rich, well-connected few.
 Tried to build perfect communities [utopias].

14. Socialism
A)Factors of production are
owned by the public and
operate for the welfare of all.
B)Grew out of optimistic view of
human nature and response to
capitalism

15. Communism
• A form of complete socialism in
which the means of
production—all land, mines,
factories, railroads, and
businesses—would be owned
by all people.

16. • Communist Manifesto
• Karl Marx-Marxism,
• employers=“haves”=bourgeoisie;
employees=“have-nots”=proletariat;
• “Workingmen of all countries, unite.”
• “The Proletariat has nothing to lose but their
chains”
• Distribute wealth back out to communist

17. Understanding 1
• Capitalism and market competition
fueled the Industrial Revolution.
Wealth increased the standard of
living for some.

18. Understanding 2
• Social dislocations associated with
capitalism produced a range of
economic and political ideas,
including socialism and
communism.

19. Exit Quiz
• 1. Who was the author of “The
Wealth of Nations”?
• 2. It stated that the government
should not ______ with the
economy.
• 3. Karl Marx authored The
_________ _________.

20. 4. Name two theories that opposed
capitalism
• 5. Socialism was a philosophy that
responded to the ___________ or wrong
doings of capitalism.
• 6. The form of socialism in which the
means of production of would controlled
by the people.

21. • 7. Capitalism and market competition
fueled the ________ ___________.
• 8. ________ is an economic
philosophy that uses the principles
of laissez-faire.

22. • 9. From what you have learned today, and
the economic situation the U.S. has been
going through, would the U.S., be better
off as a Capitalist country, or a Socialist
country?

23. From Industrial Rev. Quiz
• 1. Which leader used guerrilla warfare to
unite southern Italian states before
turning them over to the king?
A) Napoleon III
B) Otto von Bismarck
C) Count Cavour
D) Giuseppe Garibaldi

24. • 2. Otto von Bismarck’s actions in unifying Germany
were seen as an example of this strategy, which
justifies all means to achieve and hold power.
A) laissez-faire
B) Manifest Destiny
C) guerrilla warfare
D) Realpolitik
3. The final stage in German unification was:
A) the Seven Weeks War.
B) the Danish Rebellion.
C) World War I.
D) the Franco-Prussian War.

25. 4) All of these are reason why the Industrial
Revolution began in England except?
• A) Land
• B) Money
• C) Socialism
• D) Population
• 5. How did the Enclosure movement lead to
industrialization?
• A) Improved the output on farms
• B) Land owners sold land to Factory owners for
profit
• C) Enclosed land forced many people to move from
rural areas to the city looking for work
• D) Gave more people free time to invent new
machinery

26. • 6. What did Otto Van Bismarck policy of
“realpolitik” state?
• A) A leader should listen to the will of the people
• B) Candidates for office should tell the truth
• C) Military power should be used as a last resort
• D) Justify all means to achieve and hold power
• 7. During the unification of Italy the Papal
States were
• A) Replacing one pope and voting in another pope
• B) join willingly from the beginning
• C) The last to join
• D) Fighting a violent revolt against the Italian states

27. 8. Adam Smith’s Wealth Of Nations supported the idea
of a
• A) State controlled economy
• B) Free market economy
• C) Communist takeover of Farming
• D) Retarding of the Entrepreneur spirit
9. What is laissez- faire economics?
A) No gov’t interference in the economy
B) Some industries should be owned by the state
C) Economy should be controlled by the gov’t
D) Bourgeoisie should be controlled at a higher rate

28. 10. The Communist Manifesto was written by
A) Adam Smith
B) John Locke
C) Karl Marx
D) Vladimir Lenin
11. All of these are parts of Communism except
A) Rise of Proletariat
B) Redistribution of wealth to the poor
C) Gov’t control of the economy
D) Laissez – Faire economy

29. • 12. Who helped Karl Marx write the “Communist
Manifesto”?
• A) Adam Smith
• B) Frederick Engels
• C) John Locke
• D) Thomas Hobbes
13. One negative consequence of Capitalism was
A) Radical governments taking over
B) Formation of Communism in Europe
C) Unequal distribution of wealth
D) Movement of jobs to the city

30. 14. Socialism and Communism believes the economy
is best managed by
A) A gov’t controlled by the workers
B) The market
C) A gov’t controlled by factory workers
D) Bankers
15. How did the Industrial Revolution influence
Imperialism?
A) Europeans felt sorry for their “Little Brothers”
B) Europeans wanted a better environment
C) It created a need for new land
D) It created a need for raw materials