No Bull Economics Lessons

Macroeconomics & Microeconomics Concepts You Must Know

Review: Industrial Revolution (Chapter 25)

  • Industrial Revolution - Increased output of machine-made goods that began in Great Britain during the late 1700's.
  • Agricultural Revolution - Increased food production leads to growing population and industrialization; as a result, landowners experiment with new farming methods, small farmers become tenant farmers or move to the cities.
  • Enclosure Movement - Wealthy landowners fenced in farms and increased farming efficiency; smaller farmers pushed out of business and some become tenant farmers.
  • Crop Rotation - Improvements made on the 3-field system from the Middle Ages; some farmers experiment with a 4-field system which increased the nutrients in the soil.
  • Textile Production - The first area to undergo industrialization.
  • Spinning Mule - Invention that made textile production more efficient; housed in factories.
  • Factors of Production - Economic resources that include land (natural resources), labor (workers), capital (machinery & tools), and entrepreneurship (business owner).
  • Urbanization - The growth of cities or urban areas as a result of industrialization; people moved to cities because that is where the jobs were; in the beginning there was a shortage of housing, diseases such as cholera spread, lack of sanitation, and public education.
  • Railroads - growth of railway lines created jobs, easier and cheaper to transport raw materials and final goods, and increased transportation between countryside and cities.
  • US Industrialization - Initially Britain kept industry secrets from spreading and also blockaded U.S. ships during the War of 1812; U.S. forced to use their own economic resources to eventually industrialize.
  • Industrialization in Continental Europe - French Revolution, Napoleonic Wars, Unifications of Italy and Germany, rising inflation, disrupted communication, and halted trade slowed industrialization from spreading throughout Europe.
  • Corporation - Business owned by stockholders who share in company profits; stockholders are not personally responsible for the debts of the business.
  • Imperialism - Business competition leads to industrialized nations taking advantage of non-industrialized nations; the stronger country seeks to dominate weaker countries economically, politically, socially, and militarily.
  • Adam Smith - English economist that defended free markets (Capitalism) in The Wealth of Nations in 1776; the selfish behavior of businesses and consumers through the "invisible hand" promotes the advancement of society as a whole.
  • Thomas Malthus - Argues that the population was growing too rapidly and therefore wars and epidemics are needed to kill off the extra people.
  • Laissez-faire - Belief that the government should not intervene in the economy.
  • Jeremy Bentham - Utilitarian that argues that the purpose of the government is to promote the greatest good for the greatest number of people.
  • Socialism - In the 19th century, socialists argued that the gov't should own the factors of production and plan the economy for the welfare of all.
  • Karl Marx - Wrote The Communist Manifesto with Engels, arguing that the growing class differences will lead to a violent revolution; the "have-nots" will overthrow the "haves" and the gov't en route to a communist society; Marx's work inspires 20th century communist movements in Russia, China, Cuba, and Korea, and Vietnam.
  • Proletariat - Working classes ("have-nots") that would eventually overthrow the business owners ("haves).
  • Communism - A state in which the people own and share the economic resources equally (like on "The Smurfs").
  • Labor Union - Association of workers that fights for higher wages and better working conditions; tactics include going on strike against factory owners.