Transcript Ch. 14- The Economy

Ch. 14- The Economy
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The transformation of economic
systems
• Least industrialized nations- market is
combined business and social occasion
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Market- process of buying and selling
Economy- system of distribution of
goods and services
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Preindustrial societies
Hunting and gathering societies
• Subsistence economy
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Pastoral and horticultural societies
• Dependable food supply, settle down
• Social inequality
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Agricultural societies
• Specialized divisions of labor
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Industrial societies
• Machines powered by fuel
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Conspicuous consumption
• Show off wealth by elaborate
consumption of goods
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Postindustrial societies
• Service sector, surplus of goods
• Information explosion, Global village
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Bioeconomic societies
• Merge biology and economics
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Medium of exchange- means by
which people value and exchange
goods and services
Hunting/ gathering & pastoral/
horticultural
• Barter- direct exchange of one item for
another
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Agricultural
• Barter plus use of money
• Deposit receipts
• Currency
• Stored value
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Industrial
• The Gold Standard
• Fiat money
• GDP (gross domestic product)
• Inflation
• Checks/credit cards
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Postindustrial (information society)
• Debit cards
• E-cash
World economic systems
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Capitalism
Private ownership of means of
production
Market competition
Pursuit of profit
Pure capitalism (laissez-faire)
Current U.S. system (welfare/state
capitalism)
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Market restraints- laws and
regulations that limit the capacity to
manufacture and sell products
Monopoly- control of an entire
industry by a single company
Divest- selling off part of a business
Market forces- supply and demand
determine production and prices
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Socialism
Public ownership of means of
production
Central planning
Distribution of goods w/out a profit
motive
Committee decides products and
prices for country
Everyone works for the gov’t
No pure form
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Democratic socialism
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Capitalism mixed w/ state ownership
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Capitalists believe market forces
should determine products and
prices
Socialists believe an items value is
based on the work that goes into it
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Criticisms
Capitalism- leads to social inequality
and underemployment
Socialism- does not respect
individual rights
Convergence of capitalism and
socialism
Convergence theory- mixed
economic system
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Globalization of capitalism
Functionalist view
Work is functional for society
Mechanical solidarity- sense of unity
from doing similar activities
Organic solidarity- interdependence
that results from people needing
others to fulfill their jobs
Global division of labor
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Conflict view
Multinational corporations operate
across nat’l boundaries
Headed by inner circle
Strive for oligopoly- control of entire
industry by several large companies
Powerful interlocking directorates
Global investing
Work in U.S. Society
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Decline of agriculture and the
transition to postindustrial society
Women and work
• Women about 60% of workforce in 2002
• More likely work if educated
• More likely work if single
• The Quiet Revolution
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The Underground Economy
• Informal/ off the books
• Estimated to run 10-15% of regular
economy
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Shrinking paychecks
• Buying power down
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Patterns of work and leisure
• Effects of industrialization
• Trends in leisure
• Telecommuting (teleworking)
Implications of global capitalism
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Global trade
Reduction/elimination of tariffs
Industrialized nations gain more
wealth
Computer driven production