Economics Chapter 14 Henslin’s Sociology: A Down to Earth Approach Some background: As societies evolved from Hunting and Gathering Groups who did not produce more than was needed, to organized Pastoral Societies where surplus foods and goods were able to be produced, a division of labor and social inequity began to develop, steadily increasing in the Agricultural Era and Post-Industrial Eras. Durkheim: Organic Solidarity- The term used for the interdependence that develops between people due to the division of labor; people needing others to fulfill their jobs. Mechanical Solidarity- The unity that people feel as a result of performing the same or similar tasks, a shared consci4ncesness. Money as currency… Evolution of money. Surplus lead to barter and trade…eventually leading to the use of precious metals (gold and silver) in the form of coins being used in exchange for goods and services. Gold standard (till 1937 in US). Fiat money- not backed by gold held by government. Deposit receipts. Checks. Credit cards. Debit cards. E-cash. Since Post Industrial Age… Increased trade globally resulted in the development of a “global village” Forms of Economies: Socialism Capitalism Not profit Motivated For Profit Central Committee plans and directs Owners determine plans and direction Public ownership of Individual Ownership the means of of the means of production production A global division of labor is coming: Corporations – Separating owners from the management team within businesses, with bonuses and stock options as the incentives for high quality performance by management. They strive to form monopolies, but more commonly form oligopolies to control the marketplace and limit competition. Does the US have a true capitalistic economy? True capitalism, or laissez-faire capitalism, is where supply and demand control the economic direction of the economy without encumbrances, This is not the form of capitalism that exists in the US today. The US has a ‘welfare’ or ‘state capitalism’ is where our government controls the free market with market restraints (rules, laws and regulations ). Gender and the Marketplace: There as been a major influx of woman into the work force globally. Today 1 out of 2 workers are woman. The increase of female workers has been so gradual, but has has such profound social and economic effects, that it has been termed the “Quiet Revolution”. Underground Economy: It is extremely lucrative to perform untaxed economic activities. The sale of drugs, prostitution and other legal and illegal activities are considered part of an underground economy. The Convergence Theory It is believed that the world is moving towards a blending of Capitalism and Socialism, towards a converged economy where qualities of both economic philosophies are combined to form a more workable market place. Teleworking: With the advancements of telecommunication and the desire by corporations to reduce overhead and expenses, more and more people are working from their homes via the computer. Leisure Time: While US workers are the most productive in the world, they do not have the same leisure time benefits of many other industrialized countries, such as Germany.