E3 Capitalism Entrepreneurs Mercantilism banking system finance laissez fiare capitalism Adam Smith Industrial Age

Timeline beginning of capitalism

1760 industrial revolution begain in england 1776 Adam smith published the wealth of nations 1760-1840 First industrial revolution 1860-1914 second industrial revolution

By 1800, there were approximately _______________ private banks in England and Wales. The number of private banks in England and Wales grew by 600% between 1780 and _____________.

400 1810

Ayn Rand was an American author who wrote about society and the economy. She supported many of Smith's ideas. America's abundance was not created by public sacrifices to "the common good," but by the productive genius of free men who pursued their own personal interests and the making of their own private fortunes. -Capitalism: The Unknown Ideal, Ayn Rand Which summary is the best fit for this passage? America is wealthy because citizens help others in need. America is wealthy due to the sacrifices people have made to improve society. America is wealthy because people are free to pursue their self-interests. America is wealthy thanks to the actions taken by the government.

America is wealthy because people are free to pursue their self-interests.

Competitions smith believed that capitalism work because it provides opportunity for competition

Business will compete to make their prices attractive in a free market competition benefits society as a whole

What does government regulation of business achieve in a capitalist system? It increases profits for businesses. It determines supply and demand. It protects workers and consumers. It determines the means of production.

It protects workers and consumers.

Division of Labor and commerce growing business creating jobs, workers, getting wages more spending. rise of a system we see today factors making car all day someone else making food all day you go buy the food

The growth of industry led to a division of labor. growing businesses created new jobs more workers were available to perform specific tasks and roles workers received wages and could now spend those wages on products.

A new economic system arose Entrepreneurs industrialization created a need for a new economic system

Three factors led to this change: Entrepreneurs began to start more privately owned businesses. Factories began to employ specialized labor. New banking systems were needed to finance industrialization

Mercantilism 1500, 1600 dominate

before capitalism, Europe's nations engages in mercantilism. In this system countries had there goals: To "accumulate" wealth (trade) To become self sufficent

capitalism and democratic ideas

capitalism relationship to democracy 1 rights of individual 2 limited role of government pursing thier self interestwithout a lot of interference 3 free trade 4 private property

1 limited role of government laissez fiare leave them alone let them be

capitalist system, the government plays a limited role in the economy by having little involvement in controlling businesses. the idea is also called laissez fiare

2 private ownership

capitalist system, the means of production are almost always privately owned. farms, factories businessess people in control

Benefits of Capitalism producers and consumers benefits

consumers freedom to own property more options available to them have opportunity to benefit from competition ________________________________________________ Producers: have freedom to own property have more freedom to produce what the market wants have the freedom to purse a profit

regulation in the capitalist system government must still regulate business

creating guidelines to preserve safety food inspection laws restricting business practices to perserve fairness trading laws stock can be purchase preventing cheating

Free Market

driven by supply and demand supply and demand determines: the goods that are produced the price of goods the wages that are paid to workers the distribution of wealth

Adam Smiths idea he believed laissez faire capitalism government not interfering

governments should not set prices or wages private ownership should be supported there should be no barriers to trade (quoats limits or tarrifs taxes on importer goods) we should do this

Growing business need more financing and investment new banks

growing businesses and investments led to a need for financing. new banks were needed to l end money to entrepreneurs. instead of government, private lenders funded more investments.

summarizing information

identify key words phrases or data set aside unnecessary or extra information create a concise sentence that summarize main point

Problems in a capitalist system without a regulation businesses may focus on profits at the expense of society

in some situations, companies have: used unfair business practices taken advantage of workers harmed consumers created environment problems

Smith believed that capitalism worked it serves peoles Self Interest it works because it serves peoples self interests

individuals and businesses want what benefits them most society benefits when people are free to pursue self interest

capitalism characteristics became dominant economic system in industrialized nations

it is built upon three major principles 1 the liimited role of government not telling them how much to charge or what to pay employees 2 private ownership individuals not government 3 free trade free market from government intervention

Mercantilism and a new kind of company Emblem of Virginia Company 1624 "authorized by government"

joint stock companies were created to reduce the risk of overseas business. Governments authorized the creation of a company. people invested in the company by buying shares, or stock. If the company failed, shareholders lost only what they had invested.

Laissez-fare capitalism means that the government _____________ its involvement in the economy In a capitalist system, ______________ own most factories and businesses. In a free market,________________ determine(s) the price of goods.

limits private individuals supply and demand

What did countries do to increase their power under mercantilism? Check all that apply. maintain a positive balance of overseas trade use colonies to access raw materials trade to acquire goods rather than silver and gold issue charters for joint-stock companies send raw materials to colonies

maintain a positive balance of overseas trade use colonies to access raw materials issue charters for joint-stock companies

Entrepreneurs and private ownership began to influence the economy by:

starting their own private businesses. Creating new inventions finding new ways to improve old technology investing money in new businesses

James Watt Varl Frederik von Breda 1792

steam engine

Mercantilism and Wealth

to increase its power a country had to increase its wealth countries did this by: obtaining as much gold and silver as possible. maintaining a positive balance of trade.( exporting more finising good service than importing selling more than buying) using colonies to access raw materials example england colonies obtained raw materials from colonies than low cost exchange england sells back finished products to colonies for a lot of money

Adam Smith 1723-1790 Is regarded as one of the most influential economist in history

wrote of wealth of nations in 1776 called father of capitalism for his contributions to this theory