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Ch. 14- The Economy

Ch. 14- The Economy. The transformation of economic systems Least industrialized nations- market is combined business and social occasion Market- process of buying and selling Economy- system of distribution of goods and services. Preindustrial societies Hunting and gathering societies

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Ch. 14- The Economy

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  1. Ch. 14- The Economy • The transformation of economic systems • Least industrialized nations- market is combined business and social occasion • Market- process of buying and selling • Economy- system of distribution of goods and services

  2. Preindustrial societies • Hunting and gathering societies • Subsistence economy • Pastoral and horticultural societies • Dependable food supply, settle down • Social inequality • Agricultural societies • Specialized divisions of labor • Industrial societies • Machines powered by fuel

  3. Conspicuous consumption • Show off wealth by elaborate consumption of goods • Postindustrial societies • Service sector, surplus of goods • Information explosion, Global village • Bioeconomic societies • Merge biology and economics

  4. 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 • Agricultural • Barter plus use of money • Deposit receipts • Currency • Stored value

  5. Industrial • The Gold Standard • Fiat money • GDP (gross domestic product) • Inflation • Checks/credit cards • Postindustrial (information society) • Debit cards • E-cash

  6. World economic systems • Capitalism • Private ownership of means of production • Market competition • Pursuit of profit • Pure capitalism (laissez-faire) • Current U.S. system (welfare/state capitalism)

  7. 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

  8. 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

  9. Democratic socialism • Capitalism mixed w/ state ownership • Capitalists believe market forces should determine products and prices • Socialists believe an items value is based on the work that goes into it

  10. Criticisms • Capitalism- leads to social inequality and underemployment • Socialism- does not respect individual rights • Convergence of capitalism and socialism • Convergence theory- mixed economic system

  11. 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

  12. 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

  13. Work in U.S. Society • 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

  14. The Underground Economy • Informal/ off the books • Estimated to run 10-15% of regular economy • Shrinking paychecks • Buying power down • Patterns of work and leisure • Effects of industrialization • Trends in leisure • Telecommuting (teleworking)

  15. Implications of global capitalism • Global trade • Reduction/elimination of tariffs • Industrialized nations gain more wealth • Computer driven production

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