Chapter 13: The Modern Age in Europe (C) Industrial Revolution PDF

# Chapter 13: The Modern Age in Europe (C) Industria ## Syllabus - The Modern Age in Europe - definition - (c) Industrial Revolution - Comparative study of Socialism and Capitalism ## The Industrial Revolution The term 'Industrial Revolution' denotes all those changes that took place in the fiel...

# Chapter 13: The Modern Age in Europe (C) Industria ## Syllabus - The Modern Age in Europe - definition - (c) Industrial Revolution - Comparative study of Socialism and Capitalism ## The Industrial Revolution The term 'Industrial Revolution' denotes all those changes that took place in the field of industry during the second half of the 18th century and the first half of the 19th century. Until this period, goods were manufactured at home with hand. However during the period of the Industrial Revolution, the employer made his workers to use machines in his factory. The employees were paid wages for their labour. The period marked a change from handwork to machine work and from domestic system to factory system of production. In short, the Industrial Revolution is the name given to a series of changes that brought about a transition from production by hand to production by machine, from small-scale production to large-scale production, from handmade goods to machine-made goods. Industrial Revolution was unlike any other revolution. It was not sudden, not violent; there was no bloodshed, nor loss to life and property. The Revolution was peaceful. It began in England around mid-eighteenth century by mass production of goods; and within a hundred years it brought in revolutionary changes in the political, social and economic life of the people. ## Comparative Study of Capitalism and Socialism ### 1. Capitalism It is difficult to separate capitalism from Industrial Revolution. Industrial Revolution could not have taken place without the means of carrying on the production by machines. It was eventually realised that wealth could be used for generating more wealth which came to be called capital. The owners of the capital became the capitalists. The economic system which generates and gives power to capitalists came to be known as capitalism. The capitalists not only provide money for buying machines, tools, implements and raw material but also promote further research to develop improved machines. ### 2. Socialism Birth of Socialism was one of the important consequences of the Industrial Revolution. In the course of the Industrial Revolution efforts were made to improve the working conditions of the labourers. In 1776, the famous Scottish economist Adam Smith expanded his theory in his Inquiry into the Nature and Causes of the Wealth of Nations. In this, he found no conflict between the self-interest of capitalists to create wealth and the contribution to be made by them for common good. They should be allowed to operate without the interference of the State. In his book he propounded the doctrine of “Laissez faire” that translates to ‘leave alone’. Adam Smith very strongly abhorred State interference in the economy. He gained both supporters and critics. The antithesis of the Laissez faire doctrine was socialism which visualised a society free from exploitation. ### Meaning of Socialism Different writers have defined the term “Socialism” differently but almost all have visualised active role of the State in the economy. Babeuf, one of the early Socialist thinkers, even went to the extent of visualising a republic of equals whose welcoming doors will be open to all mankind. Socialism is defined as an economic system in which the means of production are owned not by private individuals but by the community in order that all may share more fairly in the wealth produced. The evil effects of Capitalism and the spirit of improving the condition of workers gave birth to socialism. The ultimate goal of Socialism is to eliminate class struggle between the capitalists and the workers and form a classless society. In order to achieve these objectives, government control over production and distribution of important things is considered necessary. Socialists maintain that all factors of production should belong to entire human race or society. Socialism is based on three principles: 1. It is opposed to private capitalism. 2. It is the voice of all workers and the working class. 3. It demands a just distribution of wealth. The Laissez faire doctrine never came to be practised in its true sense. Even England, one of its staunch supporters, could not do without the State taking up many of the initiatives specially the public works and public health programmes, which the capitalists under laissez faire could hardly do. On the other hand, many forms of Socialism exist today even after the break up of the erstwhile Union of Socialist Soviet Republics (USSR). Only the degree of State control varies from State to State. ## Early Socialists By the middle of the 18th century there arose many political thinkers who favoured some of the above ideas. They all wanted the existing social and economic systems replaced by a new system in which the means of production would be owned by the society as a whole and not by a few capitalists. The first socialists were Frenchmen-Babeuf, Saint-Simon, Fourier and others. Robert Owen (1771-1858) has been called "the Father of British Socialism". He owned a cotton mill in Scotland. He reduced the labourers' working hours, paid them good wages and helped the Trade Union Movement to grow. ## Causes for the Rise of Socialism 1. As a Reaction to the Evils of Capitalism As a result of the Industrial Revolution the society was divided into two distinct classes-the capitalists and the socialists. The capitalists had their selfish interests and they began to exploit the workers. They paid them low wages and made them work for long hours. They amassed great wealth and began to lead a luxurious life at the cost of the workers. The rich were becoming richer and the poor, still poorer. This gulf went on widening and created social disharmony and ultimately led to struggle between the two classes. The socialists took the cause of the workers and tried to save them from the exploitation of the capitalists. 2. Trade Union Movement The strong Trade Union Movement had forced the British government to recognise the rights of workers. It had brought the division of society into the rich and the poor into sharp focus. This had led to rethinking among the vast majority of workers. 3. The Chartist Movement Between 1836 and 1848, the condition of the labour in Britain was very bad. They had to face many hardships and wanted social and political equality. Their leaders put up their demands before the Parliament in the form of a charter. Hence, the movement was named the Chartist Movement. It aimed at getting the right to vote for workers. It led to many riots and strikes and the movement declined in the mid 19th century. The above causes produced sharp class divisions among capitalists and workers which gave rise to Socialism. The socialists, therefore, wanted to set up a society free of exploitation and class divisions. They proposed that this be achieved through social control of means of production and distribution. ## Marxist Socialism Karl Marx (1818–83) was a German political philosopher and economist. His long time associate Frederick Engels (1820-1895) whom he had met in France in 1844 was his collaborator in writing the Communist Manifesto. Because of his revolutionary ideas Marx had been compelled to leave Germany and make London his homeland. Both Marx and Engels lived in London. They had earlier prepared a charter of Demands or a Manifesto for the German Communist League. This document was later given the shape of Communist Manifesto published in 1848. Another famous book of Marx and Engels is Das Kapital. Marx could complete only the first volume before his death in 1883. The remaining two volumes were published by Engels several years later. Karl Marx considered capitalist society as a society divided between two classes — the working class which produces all value; and the owning and employing class, which without producing anything, exploits the value or profits. This leads to a class struggle between the working class and the employing class. Eventually, this class struggle leads to a crisis, causing the collapse of the capitalist system. The working class would take over power, organise production for its own benefit as a class. This new society would be 'socialist in nature, a society without exploitation. The system behind this society is known as 'Marxist Socialism' or 'Socialism' as conceived by Karl Marx himself. In a socialist society, private property in the means of production would be headed by co-operative ownership. A socialist economy would not base production on the creation of private profits, but would instead base production and economic activity on the criteria of satisfying human needs, i.e., production would be carried out directly for use. Eventually, Socialism would give way to a Communism, i.e., a classless, stateless system based on common ownership and free access and maximum freedom to individuals to develop their own capacities and talents. After the death of Karl Marx a new democratic Socialism came to the scene. Bernstein did not agree with the principle of class struggle advocated by Marx. He said that socialist objectives should be achieved through democratic means. The revolutionary movement in Russia overthrew the Czarist regime in 1917. Lenin and Trotsky were the chief organisers of this Communist Revolution. On October 1, 1949, a Communist regime was established in China under the leadership of Mao Tse-tung. In India too socialist parties emerged. In 1934 Socialist party was established in India under the leadership of Acharya Narendra Dev, Achyut Patwardhan, ## Comparative Study Between Capitalism and Socialism | | Capitalism | Socialism | |--------------|---------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------| | **Definition** | Refers to the economic system in which the means of production (like labour, raw material, tools and machines) are owned by private individuals or groups of them for profit. | Refers to the economic system in which the government owns and controls the means of production (as factories) and distribution of goods. | | **Beliefs** | Believes in free market and is opposed to government intervention in economics because it believes that government intervention introduces inefficiencies. | Believes that all individuals should have access to basic articles of consumption and public goods to allow for self-actualisation. | | **Key Proponents** | Richard Cantillon, Adam Smith, David Ricardo, Fredrich A. Hayek, Ayn Rand, Milton Friedman. | Robert Owen, Pierre Leroux, Karl Marx, Fredrick Engels, John Stuart Mill, Albert Einstein, George Bernard Shaw | | **Production** | Production is for profit: useful goods and services are a by-product of pursuing profit. | Production is for use: useful goods and services are produced specifically for their usefulness. | | **Economic Activity** | Competition for ownership of capital drives economic activity and creates a price system that determines resource allocation; profits are reinvested in the economy. | Economic activity and production especially are adjusted by the State to meet human needs and economic demands. | | **Property** | Private property in capital and other goods is the dominant form of property. | Two kinds of property: Personal property, such as houses, clothing, etc., owned by the individual. Public property includes factories, and means of production owned by the State but with worker control. | | **Decision Making** | Production decisions are driven by consumer demand. Individuals choose what to consume and this choice leads to more competition and better products and services. | Production decisions are driven more by the State than by consumer demand. These decisions are made on the basis of human consumption needs and economic demands. | | **Investment and Distribution** | It relies on markets to determine investment, production, and distribution decisions. | It relies on planning to determine investment and production decisions. Planning may be centralised or decentralised. | | **Examples of Countries** | Examples of countries where Capitalism is the predominant economic system are the USA, the UK, Canada, Australia. | Examples of countries where Socialism is prevalent are China, Denmark, Finland, Sweden, Norway. | | **Social Issues** | | | | | | | | | | Jayaprakash Narayan and Dr. Ram Manohar Lohia. In the present scenario there seems to be a balance between Capitalism and Socialism. Socialism now has the connotation for working further for the promotion of a just Welfare State. Socialists now concentrate on such issues as protection against unemployment, illness and injury. They also pay special attention to provide old-age pension. Whatever may be the principles, mankind is marching towards establishing a just and benevolent State.