What Are We Learning Today?

1
What Are We Learning Today?

• 2.7 Analyze ideologies that developed in response
  to classical liberalism.

2
Ideologies Are Evolutionary

• Ideologies are evolutionary they adapt and
  change in response to the political, economic,
  and social conditions and pressures of the
  society in which they exist.
• What is one life rule that youve changed over
  time because of life experience?
• In this curriculum outcome we will look at
  ideologies that developed as a reaction to
  classical liberalism and then the ways that
  liberalism itself evolved in response to these
  critics.

3
The Spread of Classical Liberalism

• During the 19th century, (1800s), classical
  liberals achieved great success in implementing
  their ideas.
• Industrialization laissez-faire capitalism had
  transformed many Western societies, but not
  everyone benefitted equally from this
  transformation.

4
Classical Liberalism Inequality

• Classical liberalism and the Industrial
  Revolution transformed British society. What was
  once a society based on agriculture with an
  interventionist govt, became a society based on
  industry, with a laissez-faire govt.
• Though this new British society was richer than
  ever before, its primary concern lied with
  industrial efficiency and wealth accumulation. It
  did not care about equality.

5
Not Everyone is Amused

• Factories and businesses were designed to be
  efficient and profitable, and workers were viewed
  as just one component of production.
• Decent wages and working conditions did not lead
  to increased efficiency and/or profits, so they
  were not considered. Since the govt had no role
  in the economy they had no responsibility to
  change things.
• As a result, not everyone saw classical
  liberalism and the Industrial Revolution as a
  good thing. What transpired were a of new
  ideologies which opposed classical liberalism.

6
Socialism

• The term socialism generally refers to any
  ideology that believes that resources should be
  controlled by the public (govt) for the benefit
  of everyone in society and not by private
  interests for the benefit of private owners and
  investors.
• In order for their beliefs to be realized
  socialists advocate a high degree of state
  involvement in the control and direction of the
  economy. They believe that the govt should
  provide guaranteed employment living standards.
  They value co-operation over competition and
  economic equality for all.

7
Socialism Industrialization

• The great wealth produced by industrialization in
  the 19th century was seen by most as a wonderful
  achievement. What was lacking was a fair and just
  distribution of wealth to all who helped
  contribute, most notably the workers.
• The starting point for socialists was reform of
  the political, economic, and social structures of
  liberal society. Various movements arose that
  rejected the lack of humanitarianism and equality
  brought by classical liberalism but unlike many
  of these movements, socialism and various forms
  of it became actual ideologies.

8
What is a Utopia?

• The word utopia refers to any imaginary, perfect
  world meant to serve as a model for real life. It
  was brought up by Sir Thomas More, who in 1516
  wrote the book Utopia, which outlined his idea of
  a perfect society.
• In the 19th century (1800s), Utopian socialism
  was applied to a school of socialist thought that
  directly opposed classical liberalism.

9
Utopian Socialists

• Utopians were essentially humanitarians. They
  called for an end to the dreadful conditions that
  the average worker in industrial capitalist
  countries experienced at the time.
• Utopian socialists were idealistic rather than
  pragmatic (practical), and were not radical
  (extreme) in the sense that they did not want to
  overturn the basic political, economic, and
  social systems of the time. Instead, they
  believed that education and improved working
  conditions could peacefully eliminate the worst
  aspects of capitalism and lead to an ideal
  socialist society where everyone was happy.

10
If you were to create your perfect utopian
community, where everyone was happy, what would
it look like?
11
Robert Owen (1771-1858)

• Was a prominent utopian socialist who believed
  that the harshness of life under laissez-faire
  capitalism corrupted human nature.
• He wanted to put his beliefs of utopian socialism
  into practice and was able to do so by co-owning
  the largest cotton-spinning business in Britain.
  He used his community of New Lanark to
  demonstrate his utopian principles.
• 2nd half pg. 134

12
Education!

• Owen was a big believer in education. He
  established an education centre in his community
  where infants were cared for while the parents
  worked and children attended school until the age
  of 10 (rather than 5 or 6 which was the usual).
• Once done school these children worked 10-hour
  days rather than the usual 13, which left time
  for them to continue their education in the
  evening. Adult education was available and his
  community centre also sponsored free medical
  care, concerts, and dancing.

13
Improved Living Conditions

• Owen also believed in improving the living
  conditions of his workers
• Houses were renovated that were constructed for
  comfort rather than affordability.
• Streets were paved and cleaned.
• Company shops with fair prices replaced private
  ones that had charged higher prices.
• Villages were landscaped and outdoor activities
  were encouraged during leisure time.
• Fines were imposed for disruptive social
  behaviour (drunkenness).

14
A Cooperative Workplace

• Textile mills in Owens community were still
  horrific by modern standards, but Owen was unique
  in that he developed a co-operative spirit
  between management and labour, introducing
  incentives to reward good employees.
• The behaviour of workers was recorded by
  supervisors who displayed a coloured marker by
  each persons workstation.

15
Using Coloured Markers

• Workers received
• for bad behaviour
• for indifferent (mediocre) behaviour
• for good behaviour
• for excellent behaviour
• This system improved productivity and the of
  yellow and white markers increased.
• Robert Owen spent the rest of his life
  publicizing his beliefs, writing books, speaking
  all over Britain, and proposing factory reform
  (change) to Parliament. (Quote pg. 135)

16
Sweden A Supermodel for America?

• http//www.youtube.com/watch?vtDAQWJbEl9U

17
Homework

• Youve all probably had a job where youve
  slacked from time to time and not put in your
  best effort (except in school of course).
• I would like a one page plan where you come up
  with a system that would get you and your fellow
  employees to work harder at your job.
• I want the plan to be realistic and not
  outrageously costly. (Who knows, maybe Ill use
  the best one and apply it to this classroom!!!)

18
More Radical Socialist Thought

• Unlike Utopians, who wanted only to modify
  classical liberalism, other socialist ideologies
  contemplated fundamental (essential) changes to
  societys structure.
• This radical socialist intent was to encourage
  govts and the institutions of capitalism banks,
  industry, commerce (trade), and services to
  rethink their purposes and consider replacing the
  liberal ideology of individualism and limited
  govt.

19
What Socialists Agree On

• Socialist thought ranges from moderate and
  democratic social reform to radical revolutionary
  Marxism. Yet socialists essentially agree that
• - private ownership of the means of production
  permits exploitation
• - the state (govt) should direct the economy
  to achieve economic equality
• - society should be classless
• While socialists share these common views, they
  differ GREATLY in their ideas for how to go about
  transforming liberal capitalist society to a
  socialist one.

20
Who is Karl Marx?
21
Marxism

• Marxism was developed by Karl Marx (1818-1883),
  yet the term Marxism was never used by him. A
  group of French socialists coined the term in the
  1880s. Karl Marx himself, on hearing about some
  of the things these so-called followers were
  doing, proclaimed that he was not a Marxist.

22
Bourgeoisie vs. Proletariat

• Marxism is a radical (extreme) form of socialism,
  often called scientific socialism or communism to
  distinguish it from other socialist ideologies.
• He believed in overthrowing capitalism and that
  the only way to do this was by means of a class
  struggle between the proletariat (workers) and
  the bourgeoisie (owners). Only through this
  workers revolution could necessary changes be
  made in society.

23
The Communist Manifesto

• Marx worked with Friedrich Engels to write The
  Communist Manifesto in 1848.
• It outlined that economics was the foundation of
  society and that the means of production, (such
  as factories and machinery), needed to be in the
  workers hands.
• Pg. 136-137 Figure 4-6
• In practice, this meant the abolition
  (elimination) of private property and putting the
  means of production in the hands of the state.

24
Marxism in Practice

• Countries such as the Soviet Union, China, Cuba
  and North Korea each implemented Marxist ideas
  and communism by developing a centrally planned
  or command economy.
• In a free market, competition and the forces of
  supply and demand determine which goods are
  produced, how they are produced, and at what
  prices they are sold. In a command economy, the
  government makes these decisions.
  http//www.youtube.com/watch?vjQtJHCxR6WQ

25
Socialism vs. Classical Liberalism

• Politically, socialism struggled to make inroads
  against classical liberalism. While moderate
  democratic socialism resulted is some very
  successful political parties in Europe, Marxist
  parties had much less success.
• However, by the 1930s Marxism had become very
  popular among world intellectuals and writers.
  While the Soviet Union enjoyed great prestige as
  it flourished economically during the Great
  Depression, the success of Marxism seemed to show
  that the idea of classical liberalism had failed.

26
What is Reactionary?

• The word reactionary is derived from the French
  word reactionnaire, which came into use at the
  time of the French Revolution to describe the
  opponents of the Revolution.
• Synonyms for reactionary are conservative or the
  Right, in reference to the political spectrum.
• Reactionary is the polar opposite of the term
  radical, which means extreme change (like how
  Marxism is based on).

27
Classical Conservatism

• Classical conservatism is an ideology that is
  reactionary, which means it supports a return to
  a previous state of affairs.
• It developed as a reaction to classical
  liberalism. It was founded by Edmund Burke as he
  viewed the events of the French Revolution from
  Britain.

28
Edmund Burke (1729-1797)

• Burke was a contemporary of classical liberal
  Adam Smith but he did not accept the beliefs and
  values of classical liberalism. Instead, he
  preferred the pre-industrial past.
• Burke was against values such as equality,
  individualism, and freedom but instead believed
  in established institutions that were run by the
  educated ppl of society who were necessary to
  control the irrational passion of the uneducated
  masses.

29
Classical Conservative Beliefs

• Society is an organic whole that should be
  structured in a hierarchical fashion with those
  best suited to leadership at the top, because ppl
  do not have equal abilities.
• Govt should be chosen by a limited electorate
  with special responsibilities, and privileges.
• Leaders should be humanitarian, their role
  includes the responsibility to care for the
  welfare of others.
• The stability of society is the paramount
  concern, to be achieved through law and order and
  the maintenance of the customs and traditions
  that bind society together.

30
Burke Tyranny

• While Burke supported established govt, he did
  not support tyranny (oppression) in any form.
• Thus, while he viewed the American Revolution
  (1775-1783) as a success since it led to an
  orderly govt, he despised the French Revolution
  (1789-1799) and its mass executions, civil
  disorder, wars against foreign countries, and
  failure to establish a stable govt. He believed
  this revolution to be a result of uninformed ppl
  who should not have a say in their govt.

31
Burke Will of People

• Burke believed govt should be left to those who
  naturally understood their duties to the country
  and the ppl, those with experience and wisdom.
• He predicted that Rousseaus concept of the
  general will of the people was an unrealistic,
  unnatural, and ultimately dangerous idea that
  would lead to rule by the mediocre, uneducated,
  and disinterested. This would lead to complete
  chaos.

32
Homework

• Read the Voices section on pg. 138-139 in your
  textbook.
• Answer fully questions 1, 2, 3 and 5 (half a page
  response total).

33
What Are We Learning Today?

• 2.8 Analyze the evolution of modern liberalism as
  a response to classical liberalism.

34
Classical Liberalisms Response

• Classical liberals begrudgingly came to see some
  of the merits of their opponents views and began
  to recognize that some modifications were
  necessary.
• The basic premise (foundation) for these
  modifications was that laissez-faire capitalists
  needed to consider the rights of workers and
  develop a social conscience.

35
Welfare Capitalism

• Refers to a classical liberal economic system
  combined with a govt that uses legislation to
  give workers protections such as limited working
  hours, minimum wage, and a safety net with
  features such as pensions and medical insurance.

36
Not an Easy Transition

• The legislative journey to workers rights was a
  long one but slowly in places like Britain and
  Germany laws that decreased working hours,
  provided leave for illness and maternity, and
  provided insurance for job-related injuries began
  to form.
• From todays perspective, these moves might seem
  logical to us and an acceptable approach to
  correcting the excesses of capital liberalism but
  at the time it was tough to achieve as
  capitalists did not want to give way to a new way
  of thinking about societys responsibilities.

37
Who are the faces on Mount Rushmore?
38
(No Transcript)
39
Theodore Roosevelt (1901-1909 American President)

• Was a reformer (wanted change) who showed his
  desire to curb the excesses of laissez-faire
  capitalism early in his presidency.

40
Describe a typical strike. Why do workers strike?
What is the usual process?
41
An Unheard of Response

• When a mining union in northern Pennsylvania
  walked out on their job demanding shorter working
  days, pay raises, and benefits, the mine owners
  flatly refused and called on Roosevelt to bring
  out the American army against the workers.
  Instead, Roosevelt refused the request and even
  threatened to call out the army against the
  owners if they refused to negotiate. This type of
  threat had been unheard of and forced the owners
  into arbitration (negotiation) until a settlement
  was reached.

42
The Square Deal

• Roosevelt coined the term square deal at this
  time. This term signifies that BOTH labour (the
  employees) and capital (the employers) must be
  treated fairly.
• This was a completely different mindset for the
  time.

43
WW I Changes Thinking

• Original principles of welfare capitalism were
  mainly oriented towards the workplace. Thus, most
  welfare capitalism legislation did not include
  issues such as child poverty, disability,
  housing, education, etc.
• Also, with the arrival of WW I a few years later,
  people were less concerned about workers rights
  when there was a war to win. Govts became
  concerned with the war effort and were
  pro-classical liberalist because they needed the
  support of industrialists to provide sufficient
  war supplies.

44
What were the Roarin 20s?
45
The Roarin 20s

• During the 1920s, mass production and consumer
  spending reached new heights. Unemployment was
  low, wages were increasing, many were able to
  afford their own homes, and it seemed like this
  progress would last forever. This was a time of
  communication innovation, consumer explosion as
  ppl bought fridges and radios, and the beginning
  of the automobile culture.

46
WW I Helps American Farmers

• Because of WW I, French grain fields were
  destroyed by trench warfare. Americas western
  lands were opened to more and more settlers, and
  grain production was increased dramatically to
  feed the ppl of Europe. When the war ended in
  1918, American fields continued producing and
  this continual increase lifted the entire
  economy.
• Also, many ppl were buying on time, that is,
  paying for their purchases on credit. Credit was
  used to purchase stocks as well, and the stock
  market was rife with potential profit.

47
http//www.youtube.com/watch?vRJpLMvgUXe8
48
The Great Depression

• Then, something unexpected happened. Grain fields
  of France began producing again and American
  grain prices crashed. People began to frantically
  sell their stocks and the stock market crashed
  soon after on October 29, 1929.
• Soon, banks failed as ppl withdrew their money,
  factories closed as ppl could no longer afford to
  buy goods, and unemployment skyrocketed.
  International trade declined as countries
  instituted tariffs (taxes) to protect domestic
  manufacturing.

49
Commy Fear!!!

• Political leaders in the democracies were baffled
  by the Depression and were concerned that their
  citizens would turn to socialism or, even worse,
  towards communism.
• A great example was the coal workers strike in
  1932 in Crowsnest Pass. This strike turned into 1
  of the most bitter strikes in Canadian history
  and at one point the workers even joined the
  Workers Unity League, an organization sponsored
  by the Communist Party of Canada. Eventually the
  strike was resolved after 7 months but the whole
  ordeal appeared to be a red conspiracy to govt
  and capitalists.

50
Keynesian Economics

• As the 1930s progressed, the recession deepened
  and no one knew what to do about it.
• Finally, John Maynard Keynes (1883-1946), a
  British economist, came up with a new economic
  theory. He believed that classical economic
  theory, the basis for the market economy, was
  fundamentally wrong.

51
Classical Liberal Economic Theory

• Classical liberals believed that if supply and
  demand were in balance that there would be full
  employment.
• Keynes said that the Great Depression proved that
  this was not true. Balance between supply and
  demand didnt necessarily result in full
  employment. This is because in times of stress,
  ppl saved their money and failed to invest in the
  economy, thereby creating and prolonging a
  recession.

52
Supply Demand

• According to classical economic theory the market
  is driven by the simple laws of supply and
  demand. When goods are plentiful, prices go down.
  When they are scarce, prices go up.
• Classical economists believe that since we know
  the market is cyclical and that it can rise and
  fall, then it is our responsibility to save for
  the bad times. There is no reason for the govt
  to get involved because individuals should be
  responsible for their own financial success.

53
Consumer Demand

• Keynes believed that the economic cycle was
  caused by one main factor consumer demand. He
  felt that if the govt could affect this demand
  then they could limit the unpredictability of the
  market.

54
Keynes Response

• During the inflationary boom times Keynes said
  govts should spend less money and increase taxes
  and interest rates, thereby leaving less money in
  ppls pockets. Ppl spending less would soften the
  boom of the economy.
• During a recession the govt should spend more
  money and reduce taxes and interest rates,
  leaving more money in ppls pockets that they
  then could spend or invest in the economy. This
  would lessen the severity of the recession.
• Figure 4-11 pg. 146 147

55
What is a deficit? What is a debt?
56
Deficit Spending

• A deficit occurs when the govt spends more money
  than it makes. Deficit spending was key to
  Keynes theory because the govt was to spend a
  lot of money in times when taxes were low (during
  recessions).
• Yet this action of the govt was supposed to
  kick-start the economy once again. Then, it was
  the govts responsibility to save their money in
  boom times to offset the money lost during the
  recessions.

57
Monetary Fiscal Policy

• Monetary policy refers to actions taken by the
  central bank of a country to control the supply
  of money. The most common tools used in monetary
  policy are raising or lowering interest rates,
  and printing or destroying money.
• Fiscal policy refers to the direct taxing and
  spending functions of govts. Govts can raise or
  lower taxes, and raise or lower their spending on
  projects and programs. Govts are usually the
  biggest single spender in a modern economy, so
  these decisions have a direct effect on the
  economy of a country.

58
Demand-Side Economics

• Keynes believed his application of monetary and
  fiscal policy would lessen the effects of booms
  and recessions yet would still leave the
  free-market largely intact.
• Keyness theory became known as demand-side
  economics. He argued that even in a liberal
  democratic society, govts could and should play
  an important role in safeguarding all citizens
  from economic uncertainty.

59
Welfare State Great Depression

• The movement from welfare capitalism to the
  welfare state was spurred by the Great
  Depression.
• The Great Depression became a catalyst (means)
  for change and what began to emerge was modern
  liberalism as we know it today.

60
What is the Welfare State?

• The welfare state is a state in which the economy
  is capitalist, but the govt uses policies that
  directly or indirectly modify the market forces
  in order to ensure economic stability and a basic
  standard of living for its citizens (seen as
  further left than welfare capitalism, contains a
  mixed economy).
• Keynesian economics is a great example of this.

61
FDR the New Deal

• Franklin D. Roosevelt was the president of the US
  from 1933-1945. He was the first politician to
  convert to Keynes theories.
• He implemented massive public works programs that
  put ppl to work, which became known as the New
  Deal.
• New Deal programs provided emergency relief to
  Americans, reformed the banking system, and
  attempted to invigorate agriculture and the
  economy.

62
Emergence of Modern Liberalism

• This new attitude toward the govts role in the
  economy represented the beginning of the shift to
  the welfare state and a mixed economy, where
  free-market principles are combined with some
  degree of govt intervention.
• By the late 1950s and 1960s, the welfare state
  was a reality in most democratic countries
  including Canada, and modern liberalism was in
  place.
• Welfare State Modern Liberalism!