ECONOMY

Social Structures of the EconomyEconomy

Theeconomyis a social system that produces, distributes, and consumes goods and services in a society.

Three Sectors make up an EconomyPrimary sector(Agricultural)

Secondary sector(Industrial)

Tertiary sector(Post-Industrial)

Economic SystemsThe two dominant economic systems in the world are capitalism and socialism.

Most societies have varying blends of the two systems

CapitalismThree key principles define the economic system of capitalism:

Private ownership of production and distribution of goods and servicesCompetition, or the laws of supply and demand directing the economyProfitseeking, or selling goods and services for more than their cost of production

List of some Capitalist Countries

GermanyUnited StatesSpainIndiaJapan

SocialismThree key principles also define the economic system of socialism:

State ownership of production and distribution of goods and servicesCentral economyProduction without profit

Socialist Countries

ChinatheChinese economyhas become more geared towards capitalism, but is still officially socialist.DenmarkFinlandNetherlandsSwedenNorway

Democratic Socialism and State CapitalismOne hybrid isdemocratic socialism, which is an economic system where the government maintains strict economic controls while maintaining personal freedom. Scandinavian nations, Canada, England, and Italy all practice democratic socialism.

State CapitalismState capitalismis another economic hybrid. In this economic system, large corporations work closely with the government, and the government protects their interests with import restrictions, investment capital, and other assistance.

Place of Social Economy in the Social OrderSocial Economy A recent International Labor Organization (ILO) report (Fonteneau et al., 2011, p. vi) described the social and solidarity economy as a concept that refers to enterprises and organizations, in particular cooperatives, mutual benefit societies, associations, foundations and social enterprises, which specifically produce goods, services and knowledge while pursuing economic and social aims and fostering solidarity.

Social EconomyNotably, the European Commission (2010) have defined the social economy as including co-operatives, mutual societies, non-profit associations, foundations and social enterprises.

COOPERATIVES

Acooperativeis an association of persons with common bond of interest, who have voluntarily joined together to achieve a lawful common social and economic end.

NON PROFIT ORGANIZATION

Anincorporatedorganization which exists for educational or charitable reasons, and from which itsshareholdersortrusteesdo notbenefitfinancially.

SOCIAL ENTERPRICESocial enterprisesare businesses that trade to tacklesocialproblems, improve communities, people's life chances, or the environment. They make their money from selling goods and services in the open market, but they reinvest their profits back into the business or the local community.

COMMON CHARACTERISTICS OF SOCIAL ECONOMYEmerges from the economic, social and cultural needs of their members.

Their primary purpose is not to obtain a return on capital..

They are flexible and innovative

Most are based on voluntary participation, membership and commitment.

TECHNOLOGY Introduction:One of the most persistent themes in the social sciences, history, and the humanities is the impact of technology and technological change on all aspects of social life. Major changes in human life have been associated with major technological changes

TechnologyThe body of knowledge which can be used to produce goods and services from economic resources is called technology. While technological progress means the increased application of new scientific knowledge in the form of inventions and innovations.

Importance of Technology: In the present age technology is playing very effective role in increasing the rate of economic growth. Today each country considers it is the basic tool of economic development. Only capital cannot bring development in the country. It is technical progress along with capital which can boost the rate of economic growth.

Economic Impact of Technology Use of Natural ResourcesBest Use of CapitalSaving of TimeSpecializationImprovement in QualityExpansion of Industry

International TradeImportance for ResearchSaving of Labor Improvement in Labor Efficiency

Positive Impacts of Technology on SocietyTechnology has mechanized agriculture

Technology has improved transportation

Technology has improved communication

Technology has improved education and learning process

Negative Impacts of Technology on SocietyResource DepletionIncreased PopulationIncreased Pollution

Division of LaborDivision of Labor

is the term used in economics to refer to the specialization that occurs when different functions or roles are involved or used in the production of goods and services.

Categories of Division of LaborTerritorial Division of Labor also referred to as geographic division of labor, this occurs when different regions or countries specialize in the production of one or more products

Temporal Division of Labor This occurs where production happens sequentially such as to result in lumberjacks, saw millers and carpenters or farmers and millers etc.

Categories of Division of LaborSocial Division of Labor Division based on such things as gender, ethnicity, caste or class reflecting power rather than efficiencyTechnological/Technical Division of Labor The breaking up of production between workers within a factory or workplace into different aspects or component parts for increased efficiency and productivity.In the modern world this is usually what is meant when the term Division of Labor is used.

Development from Ancient to Modern Times Ancient Plato

saw it as part of the natural inequality of man justifying the creation of the state with the need for builders, weavers, shoemakers and so forth to be supported.Xenophon

linked it to the development of cities and the growth in population, which enabled shoemakers to move from making and repairing all shoes to making alone and not repairing or vice versa, or to making for just men and not women and so forth, with the result that they became better at that which they did.

Development from Ancient to Modern Times Modern TimesSir William Petty in 1681, who wrote about the pioneering work of the Dutch shipyards, where instead of building one ship and then starting on another the workers were organized in teams each building a different part of the boat and which were then put together.

Turgot French Physiocrat writing in 1751 linked it to the creation of money, the development of commerce and the accumulation of capital.

Development from Ancient to Modern Times Modern TimesAdam Smith (most famous early writer on the division of labor) who, in 1776, saw it as the essential element in mankinds progress.His account of the pin factory is famous in the literature of economics.

Karl Marx.Unlike Smith, Marx saw it as essentially evil. He believed in the eventual elimination of the division of labor and the arriving at a situation where everyone would perform entire tasks for their own satisfaction and wellbeing.

Advantage and Disadvantages of Division of LaborAdvantages

Productivity is increasedWorkers are able to achieve a higher standard of performanceProduction is able to be better organized and controlled.Innovation and invention is stimulated

Advantage and Disadvantages of Division of LaborDisadvantagesWorkers tend to be dehumanized or degraded in becoming somewhat in the nature of a machine and making only a part of something.Workers become less skilled, bored and lose pride in their work.Division of labor results in mass production and a loss of quality