The Economy and Work Macionis, Sociology, Chapter Sixteen Economy is the social institution responsible for organizing the production, distribution, and consumption of goods and services

2 Agricultural Revolution Four factors that made economy a distinct social institution Agricultural technology Job specialization Permanent settlements Trade

3 The Information Revolution Postindustrial economy– a productive system based on service work and high-technology Information revolution altered the fundamental character of work in three ways From tangible products to intangible ideas Creating and manipulating symbols in modern society From mechanical skills to literacy skills Speaking, writing, and computer knowledge From factories to virtual office almost anywhere

4 Sectors Of The Economy Primary sector (think farming) Generation of raw materials from the environment Low income countries = 23% of economy High income countries = 2% of economy Secondary sector (think by-products) Raw materials into manufactured goods Growth rapid in all industrialized nations or those entering the phase Tertiary sector (think service industry) Economy generates services rather than goods Low income countries = 38% of economy High income countries = 68% of economy

5 The Global Economy Global Economy – expanding economic activity across national borders This activity has four major consequences Global division of labor Products pass through many countries National governments n longer control the economic activity within their borders A small number of businesses now control a vast share of the world’s wealth

6 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 property Key concept of capitalism Pursuit of personal profit Simply a “matter of doing business” Competition and consumer sovereignty The “invisible hand” is at work so leave the market alone

7 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

8 CAPITALSIM VS. SOCIALSIM Economic productivity GDP is $13, 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; Need creative forces Economic productivity GDP is $5, Economic equality Less income disparity Overall well-being Lower standards of living, but less disparity Personal freedom Stress is placed upon freedom from basic needs

9 Alternative Systems Communism – a hypothetical economic ad political system in which all members of a society are socially equal Welfare Capitalism – an economic and political system that combines a mostly market-based economy with extensive social welfare programs State Capitalism – an economic and political system in which companies are privately owned but cooperate closely with the government

10 THE WORKFORCE THE DUAL LABOR MARKET primary labor market extensive benefits to workers secondary labor market minimal benefits to workers LABOR UNIONS organized labor seeking better wages and benefits for members decline of unions loss of highly unionized jobs concessions have included dissolution of unions many temporary workers these days

Other Terms Underground Economy Income not reported to the government Conglomerate A big corporation composed of smaller corporations Oligopoly Domination of a market by a few companies Monopoly Domination of a market by one company 11

12 Turn work into play “The happiest of people do not necessarily have the best of everything; they just make the most of everything that comes their way.” – Author Unknown