Sociology, Eleventh Edition. The Economy - The social institution responsible for organizing the production, distribution, and consumption of goods.

Sociology, Eleventh Edition


The Economy - The social institution responsible for organizing the production, distribution, and consumption of goods and services. Goods – commodities

ranging from necessities to luxuries.

Services – activities that benefit others.


First societies were hunters and gatherers.

The introduction of the plow led to a new agricultural economy.

The surplus meant not everyone had to produce food specialized work.

Towns soon developed. Linked by trading

networks.


Industrialization changed the economy in 5 ways:

New sources of energy Steam engine

Centralization of work in factories Moved away from farming and work

based out of homes Manufacturing and mass production

Turning raw materials into a wide range of products

Specialization Diverse division of labor and lower

overall skill requirements Wage labor

Working for strangers with intense supervision


• Postindustrial economy – a productive system based on service work and high-technology.

The information revolution has altered the fundamental character of work in 3 ways:

1.From tangible products to intangible ideas

2.From mechanical skills to literacy skills

3.From factories to almost anywhere


Primary sectorGeneration of raw

materials from the environment.

Secondary sectorTransformation of raw

materials into manufactured goods. Ex. Refining petroleum into

gasoline or turning metals into tools and automobiles.

Tertiary sectorEconomy generates

services rather than goods. Ex. Office work


According to a study from the University of Michigan, ¾ of high school seniors work; 40% of seniors work more than 20 hours a week.

How many of you work?How many hours a week do you work?What sector do you work in?

Primary, secondary or tertiary



Global Economy – expanding economic activity with little regard to national borders.

Critics claim that the US is losing jobs, especially factory jobs, to low income nations.


What are the benefits of outsourcing jobs? Consequences?

Is it worth it?





Capitalism - An economic system where the natural resources and the means of producing goods and services is privately owned.

Three distinct features:Private ownership of

propertyPursuit of personal profitCompetition and

consumer sovereignty Adam Smith - The “invisible

hand” is at work so leave the market alone (free market economy).


Socialism - An economic system where the natural resources and the means of producing goods and services are collectively owned.

Three distinct features: Collective ownership of property

Limits the right to private property

Pursuit of collective goals Pursuit of profits stands at odds

Government control of the economy Centrally controlled economy Consumers should not drive

economy


Communism – a hypothetical economic and political system in which all members of a society are socially equal.North Korea, China or Cuba

Welfare Capitalism – an economic and political system that combines a mostly market-based economy with extensive social welfare programs.Sweden or Italy

State Capitalism – an economic and political system in which companies are privately owned but cooperate closely with the government. Japan, South Korea and Singapore


Economic productivity◦ Per capita GDP is

$13,500.00 Economic equality

◦ More income disparity

Overall well-being◦ A high quality of

life, but greater disparities

Personal freedoms◦ Are the heart of a

capitalistic system

Economic productivity Per capita GDP is

$5,000.00 Economic equality

Less income disparity Overall well-being

Lower standards of living, but less disparity

Personal freedoms Stress is placed upon

freedom from basic needs



The Dual Labor Market Primary labor market

White collar work Extensive benefits to workers

Secondary labor market Blue Collar work Minimal benefits to workers

Labor Unions Organized labor seeking better wages and

benefits for members. Decline of unions

Loss of highly unionized jobs Many temporary workers these days


The U.S. government requires individuals and business to report their economic activity, especially earnings.

Unreported income makes a transaction part of the underground economy, economic activity involving income not reported to the government as required by law.


Computers are deskilling labor.

Computers are making work more abstract.

Computers are limiting workplace interaction.

Computers increase employers’ control of workers.

Computers allow companies to relocate work.



Corporation - an organization with a legal existence, including rights and liabilities, apart from those of its members

Economic concentration◦ In 2002, Wal-Mart was the largest

$214 billion in revenue 700,000 employees

Conglomerates – giant corporation composed of several smaller corporationsEx: Pepsico

Competition is a gray area◦ Monopoly: domination of a market

by one corporation◦ Illegal

◦ Oligopoly: domination of a market by a few corporations◦ Common


“Let's be from

Vermont. And let's have an

emerging maple syrup

conglomerate.”

Corporations account for most of the world’s economic output.

They often look for low labor costs:Mexico – average hourly wage $2.21US – average hourly wage $17.12




PoliticsThe social institution that distributes power, sets a

society’s agenda, and makes decisions. Power

The ability to achieve desired ends despite resistance from others.

GovernmentA formal organization that directs the political life

of a society.


Authority - Power people perceive as legitimate, not coercive.

Traditional Power legitimized through respect

for long established cultural patterns.

Rational-legal Power legitimized by legally

enacted rules and regulations. Charismatic

Power legitimized through extraordinary personal abilities that inspire devotion and obedience. Examples: Mahatma Gandhi, Martin Luther

King, Jr., Adolf Hitler


MONARCHY Rule by a single family over generations

typical of ancient agrarian societies. Monarchies are legitimized by tradition,

according to Weber. ABSOLUTE MONARCHY

Rulers monopolizing power based on divine right.

Modern Example: Saudi Arabia CONSTITUTIONAL MONARCHIES

Modern-day monarchies More figure head than ruler Political principles rule Elected official actually rules Modern Example: Great Britain, Spain,

Denmark, etc.


Democracy – A political system which gives power to the people as a whole. Linked to Rational-legal Authority High-income countries claim to be

democratic. Representative Democracy –

Authority in hands of elected leaders, accountable to the people.




Welfare state, government agencies and programs that provide benefits to the population.

The U.S. welfare state is still smaller than those of many other high-income nations.


The political spectrum helps us understand two types of issues:

Economic Issues Economic Inequality - Poverty

Social Issues Moral questions about how people ought to live.

Equal Rights, abortion, death penalty, etc.

Where do you fall on the political spectrum?

Why?


Rich people tend to be conservative on economic issues but liberal on social issues.

Low income people are economically liberal yet socially conservative.

African Americans, Latinos, Asian Americans, Jews and women tend to be liberal.



Many people do not vote. Women are more likely to vote than men. 65+ are more likely than college students to vote. People making $75,000+ are more likely to vote than

people making less than $10,000. Homeowners, parents with young kids, more schooling

and good jobs are more likely to vote.


Kentucky and Virginia are the only states that don’t automatically restore voting rights to convicted felons after serving their sentence.

Should convicted felons have a right to vote?



Pluralist model – linked to S-F.Power is dispersed among many competing

interests groups. All groups have some voice.

The power-elite model – based on S-C.“Real” power is concentrated among the very

rich in America. Concentrating wealth in the hands of the few makes

the US a mostly capitalist economy. Marxist political-economy model – S-C.

Power is divided along the lines of a political economy. Bias is rooted within the nation’s social institutions. Revolution is the only answer.



Political Revolution – The overthrow of a political order in order to establish another. Coup d’etat – one leader disposing another

Political Revolutions have common traits:1. Rising expectations

Tend to happen when quality of life is improving.

2. Unresponsive government Government unwilling or unable to reform.

3. Radical leadership by intellectuals Revolution is often “university centered”. Students play

crucial role. Establishing new legitimacy

1. Guarding against the counterrevolution.



Wars occur often but there is nothing natural about humans engaging in war.

Warfare is a product of society.


The world’s nations spend 1 trillion annually.$160.00 for every person on earth

Military spending went up for decades due to the arms race between the US and the Soviet Union.Trying to increase military power.

Militarism continues due to regional conflict.

Even small conflicts have the potential to grow.


DETERRENCE Balance of power (or terror) between societies.

Ex. Cold War – 50+ years

HIGH-TECHNOLOGY DEFENSE Strategic defense initiative.

DIPLOMACY AND DISARMAMENT Keep talking about reducing arms.

RESOLVING UNDERLYING CONFLICT Increase spending on promoting peace rather than

building up military.


Sociology, Eleventh Edition. The Economy - The social institution responsible for organizing the production, distribution, and consumption of goods.

Documents

service work

fundamental character

food specialized work

manufactured goods

editionthe economy

editionglobal economy

editionpostindustrial

consumption of goods