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.
Sociology, Eleventh Edition
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.
Sociology, Eleventh Edition
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
Sociology, Eleventh Edition
• 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
Sociology, Eleventh Edition
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
Sociology, Eleventh Edition
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
Sociology, Eleventh Edition
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.
Sociology, Eleventh Edition
What are the benefits of outsourcing jobs? Consequences?
Is it worth it?
Sociology, Eleventh Edition
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).
Sociology, Eleventh Edition
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
Sociology, Eleventh Edition
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
Sociology, Eleventh Edition
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
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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
Sociology, Eleventh Edition
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.
Sociology, Eleventh Edition
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.
Sociology, Eleventh Edition
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
Sociology, Eleventh Edition
“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
Sociology, Eleventh Edition
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.
Sociology, Eleventh Edition
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.
Sociology, Eleventh Edition
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.
Sociology, Eleventh Edition
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.
Sociology, Eleventh Edition
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.
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.
Sociology, Eleventh Edition
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.
Sociology, Eleventh Edition
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?
Sociology, Eleventh Edition
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.
Sociology, Eleventh Edition
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.
Sociology, Eleventh Edition
Wars occur often but there is nothing natural about humans engaging in war.
Warfare is a product of society.
Sociology, Eleventh Edition
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.
Sociology, Eleventh Edition
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
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