Chapter 18 Economic Institutions

Market An economic institution that regulates exchange behavior through the establishment of different values for particular goods and services. Technology Tools, procedures, and forms of social organization that increase human productive capacity.

Multinational corporation An economic enterprise that has headquarters in one country and conducts business activities in one or more other countries. Mercantilism An economic philosophy based on the belief that the wealth of a nation can be measured by its holdings of gold or other precious metals and that the state should control trade.

Laissez-faire capitalism An economic philosophy based on the belief that the wealth of a nation can be measured by its capacity to produce goods and services (i.e., its resources of land, labor, and machinery) and that these can be maximized by free trade. Socialism An economic philosophy based on the concept of public ownership of property and sharing of profits, together with the belief that economic decisions should be controlled by the workers.

Democratic socialism An economic philosophy based on the belief that private property may exist at the same time that large corporations are owned by the state and run for the benefit of all citizens. Welfare capitalism An economic philosophy in which markets determine what goods will be produced and how, but the government regulates economic competition.

Alienation The feeling of being powerless to control one’s own destiny; a worker’s feeling of powerlessness caused by inability to control the work process. Profession An occupation with a body of knowledge and a developed intellectual technique that are transmitted by a formal educational process and testing procedures.