EconomicsEconomics
EconomicsEconomics
Economic system – part of society that Economic system – part of society that deals with production, distribution, and deals with production, distribution, and consumption of goods and servicesconsumption of goods and services Tools used to produceTools used to produce Relationship of tools to people and people to Relationship of tools to people and people to
eachother in the process of producing, eachother in the process of producing, distributing, and consuming goodsdistributing, and consuming goods
Economics Economics
Society and economics are interdependentSociety and economics are interdependent Culture shapes goals of the people and how Culture shapes goals of the people and how
they achieve those goalsthey achieve those goals Organization of production has consequences Organization of production has consequences
for family structure and political systemfor family structure and political system
Economic behaviorEconomic behavior
Economics is the study of the decisions Economics is the study of the decisions people and societies make about how to people and societies make about how to use scarce resources to produce and use scarce resources to produce and distribute goods and servicesdistribute goods and services
Based on the idea of scarcity – unlimited Based on the idea of scarcity – unlimited wants, limited resourceswants, limited resources
Economic behaviorEconomic behavior
People will do what gives them the People will do what gives them the greatest benefit = economizing behaviorgreatest benefit = economizing behavior
Greatest benefit depends on your Greatest benefit depends on your motivation…money, grades, time with motivation…money, grades, time with family and friends, …family and friends, …
Prestige varies Prestige varies Consumption, display of goodsConsumption, display of goods Generosity, giving away of goods Generosity, giving away of goods
ProductionProduction
Allocation of resourcesAllocation of resources Organization of resourcesOrganization of resources
Production- Production- Allocation of ResourcesAllocation of Resources
Productive resources – things you need Productive resources – things you need to participate in the economyto participate in the economy Land, water, tool making materials, fishing Land, water, tool making materials, fishing
boats, knowledgeboats, knowledge
As population and social complexity As population and social complexity increase, more resources controlled by increase, more resources controlled by fewer peoplefewer people
Production- Production- Allocation of ResourcesAllocation of Resources
Foragers Foragers Productive resources = hunting weapons, Productive resources = hunting weapons,
food gathering tools, knowledgefood gathering tools, knowledge Live in small groups that share land with Live in small groups that share land with
flexible boundaries that change as food flexible boundaries that change as food availability changes and the group movesavailability changes and the group moves
Production- Production- Allocation of ResourcesAllocation of Resources
PastoralistsPastoralists Productive resources = land, water, and Productive resources = land, water, and
livestocklivestock Kinship groups share access to pastureKinship groups share access to pasture Head of household owns livestockHead of household owns livestock Animals require a lot of careAnimals require a lot of care Negotiate access to pasture surrounding Negotiate access to pasture surrounding
villages they pass through villages they pass through
Production- Production- Allocation of ResourcesAllocation of Resources
HorticulturalistsHorticulturalists Productive resources = land, tools, Productive resources = land, tools,
knowledge, storage facilitiesknowledge, storage facilities Land owned by kin group, members given Land owned by kin group, members given
permission to use plotspermission to use plots Clearing land requires laborClearing land requires labor Where land scarce or population high, Where land scarce or population high,
competition for land may lead to warcompetition for land may lead to war
Production- Production- Allocation of ResourcesAllocation of Resources
AgriculturalistsAgriculturalists Productive resources = Complex tools, land, Productive resources = Complex tools, land,
water, water, Surplus of food supports more peopleSurplus of food supports more people Individual landowners and laborers who Individual landowners and laborers who
work fieldswork fields Leads to more complex society with ruling Leads to more complex society with ruling
eliteelite
Production – Production – Organization of LaborOrganization of Labor Nonindustrial societiesNonindustrial societies
Household is the unit of production/consumptionHousehold is the unit of production/consumption Goals are often social or religiousGoals are often social or religious Labor is part of membership in kin groupLabor is part of membership in kin group
Industrial societiesIndustrial societies Business firm is unit of productionBusiness firm is unit of production Goal is economic growthGoal is economic growth Labor is commodity, bought and sold on marketLabor is commodity, bought and sold on market
Production – Production – Organization of LaborOrganization of Labor Division of Labor by SexDivision of Labor by Sex
Women give birth, nurse, care for childrenWomen give birth, nurse, care for children Foraging – women forage, men huntForaging – women forage, men hunt Horticulture – women grow staple foods, men Horticulture – women grow staple foods, men
grow trade foodsgrow trade foods Agriculture – women spend more time in Agriculture – women spend more time in
childcare, men grow trade crops and have capital childcare, men grow trade crops and have capital in marketplace; women more dependentin marketplace; women more dependent
Production – Production – Organization of LaborOrganization of Labor Specialization of LaborSpecialization of Labor
Complex agriculture of storable foods (grain), Complex agriculture of storable foods (grain), increased population of specialistsincreased population of specialists
Specialists produce goods, arts, religion, servicesSpecialists produce goods, arts, religion, services
DistributionDistribution
Exchange of goodsExchange of goods ReciprocityReciprocity RedistributionRedistribution Market exchangeMarket exchange
DistributionDistribution
ReciprocityReciprocity Mutual give and take among people of equal Mutual give and take among people of equal
statusstatus Generalized reciprocityGeneralized reciprocity Balanced reciprocityBalanced reciprocity Negative reciprocityNegative reciprocity
DistributionDistribution
ReciprocityReciprocity Generalized reciprocityGeneralized reciprocity
Distribution of goods with no immediate or specific Distribution of goods with no immediate or specific return expectedreturn expected
Successful hunter distributes meat to communitySuccessful hunter distributes meat to community Gains credit for future return, prestige, satisfactionGains credit for future return, prestige, satisfaction
Balanced reciprocityBalanced reciprocity Negative reciprocityNegative reciprocity
DistributionDistribution
ReciprocityReciprocity Generalized reciprocityGeneralized reciprocity Balanced reciprocityBalanced reciprocity
Clear obligation to return, within time limit, goods of Clear obligation to return, within time limit, goods of equal valueequal value
Gift giving, trading partnersGift giving, trading partners
Negative reciprocityNegative reciprocity
DistributionDistribution
ReciprocityReciprocity Generalized reciprocityGeneralized reciprocity Balanced reciprocityBalanced reciprocity Negative reciprocityNegative reciprocity
When trade is conducted for material advantage, When trade is conducted for material advantage, desire to get something for nothing or to get the desire to get something for nothing or to get the better end of a bargainbetter end of a bargain
Gambling, theft, cheating, hagglingGambling, theft, cheating, haggling Large societies where exchange is between Large societies where exchange is between
strangersstrangers
DistributionDistribution
RedistributionRedistribution Goods are collected from the group then given Goods are collected from the group then given
out in a new pattern, like taxesout in a new pattern, like taxes Involves social centerInvolves social center Potlatch- Pacific Northwest Native American Potlatch- Pacific Northwest Native American
redistribution system where chiefs who gave redistribution system where chiefs who gave away or destroyed goods gained prestigeaway or destroyed goods gained prestige
Leveling mechanismsLeveling mechanisms
DistributionDistribution
RedistributionRedistribution Leveling mechanisms – practices, values or Leveling mechanisms – practices, values or
forms of social organization that even out the forms of social organization that even out the distribution of wealthdistribution of wealth
Force accumulated resources to be used in Force accumulated resources to be used in ways that reduce economic differencesways that reduce economic differences
Cargo systems – wealthy community members Cargo systems – wealthy community members are elected to offices that require them to are elected to offices that require them to provide food and drink during festivalsprovide food and drink during festivals
DistributionDistribution
Market Exchange – goods and services Market Exchange – goods and services are bought and sold for money, value are bought and sold for money, value determined by supply and demanddetermined by supply and demand Social and political roles not importantSocial and political roles not important Main goal is maximizing material gainMain goal is maximizing material gain Productive resources become capital when Productive resources become capital when
used to increase owner’s financial wealthused to increase owner’s financial wealth Capitalism Capitalism
DistributionDistribution
Market ExchangeMarket Exchange Capitalism - people work for wages, land and Capitalism - people work for wages, land and
capital goods are privately owned, capital is capital goods are privately owned, capital is invested for individual profitinvested for individual profit Capital owned by small portion of populationCapital owned by small portion of population Most people’s primary resource is their laborMost people’s primary resource is their labor Value of worker’s contribution to production is Value of worker’s contribution to production is
always greater than compensation they receive always greater than compensation they receive