DIFFERING PHILOSOPIES
The Industrial Revolution changed the structure of society, opening up a gap between rich and poor. New philosophies emerged regarding the role of the government in an industrialized society. One of the many things discussed was the government's role in the economy, Laissez-farie thinkers believed that the governments should stay out of business and economic affairs. These Ideas were based off of the economic system called Capitalism. On the other hand Reformers wanted the government to play an active role in bettering the conditions of the poor. These ideas were based of the economic system called Socialism. Adam Smith, wrote the Wealth of Nations (1776), argued that if individuals freely followed their own self-intrest, society would prosper. He believed that there was no need for the government to get involved in the economy. The idea has become known as laissez-faire. His ideas laid the foundation for modern Capitalism. Thomas Malthus was also a laissez-faire thinker and believed that the population grows too fast for for supply, and epidemics and war are good to control population because there are too many people, and that most people are poor. David Ricardo argued that a permanent underclass would always be poor. In a market system with many workers, labor would be cheap and wages low. Capitalism is based of the ideas of a free market, and businesses are privately owed. Prices, wages, etc. are determined by the law of supply and demand, not the government. People go into business with the idea of making a profit, and individuals/businesses compete in the open market place, the idea of unrestricted competition between people and businesses is considered good for development in technology and society. Adam Smith described competition as "the invisible hand" which kept the economy orderly and stable without the need for any "external designer" (i.e. the government). Reformers on the other hand argued for a new economic system they called socialism. In socialism, the factors of production are owed by the public and operated for the welfare of all. Socialist believed that the public ownership would help workers, who were at the mercy of the greedy employers. The role of the government under socialism was to plan the economy, control key industries, and promote equality between all people. Karl Marx was a German journalist who introduced the world to a radical type of socialism: Marxism. He believed that human history was a history of class struggle. He argued that human societies have always been divided into warring classes, the "Haves" or employers controlled the means of the production and ended up becoming rich. Where as the "Have-nots" or workers (proletariat) performed backbreaking labor under terrible conditions while being exploited by capitalist, and they remained poor. Marx believed that the workers would revolt and the workers revolution would result in the proletariat would seize control of power. Workers would produce what society needed, share profit, and bring about economic equality for all people. Workers would control the government in a "dictatorship of the proletariat." State would eventually "wither away" as a classless society would form. Marx called this final phase communism. In communism all means of production would be owned by the people, private property would cease to exist. All goods and services would be shared equally, and everyone would work for the benefit of the community. Most of Marx's predictions never occurred proving that society isn't controlled by economic forces alone, but religion, nationalism, and other political forces as well. Communism played a huge part in the Russian Revolution because it was the resulting government economic system at the end of the revolution.