18.1 Economic Systems

Economy refers to the social institution through which a society s resources (goods and services) are managed. The Agricultural Revolution led to development of the first economies that were based on trading goods. Mechanization of the manufacturing process led to the Industrial Revolution and gave rise to two major competing economic systems. Under capitalism, private owners invest their capital and that of others to produce goods and services they can sell in an open market. Prices and wages are set by supply and demand and competition. Under socialism, the means of production is commonly owned, and the economy is controlled centrally by government. Several countries economies exhibit a mix of both systems. Convergence theory seeks to explain the correlation between a country s level of development and changes in its economic structure.

18.2 Globalization and the Economy

Globalization refers to the process of integrating governments, cultures, and financial markets through international trade into a single world market. There are benefits and drawbacks to globalization. Often the countries that fare the worst are those that depend on natural resource extraction for their wealth. Many critics fear globalization gives too much power to multinational corporations and that political decisions are influenced by these major financial players.

18.3 Work in the United States

The job market in the United States is meant to be a meritocracy that creates social stratifications based on individual achievement. Economic forces, such as outsourcing and automation, are polarizing the workforce, with most job opportunities being either low-level, low-paying manual jobs or high-level, high-paying jobs based on abstract skills. Women's role in the workforce has increased, although women have not yet achieved full equality. Immigrants play an important role in the U.S. labor market. The changing economy has forced more people into poverty even if they are working. Welfare, Social Security, and other social programs exist to protect people from the worst effects of poverty.

Introduction to Work and the Economy

  • economy: the social institution through which a society s resources (goods and services) are managed
  • mechanical solidarity: a form of social cohesion that comes from sharing similar work, education, and religion, as might be found in simpler societies
  • organic solidarity: a form of social cohesion that arises out of the mutual interdependence created by the specialization of work

Section 18.1  Economic Systems

  • bartering: a process where people exchange one form of goods or services for another
  • money: an object that a society agrees to assign a value to so it can be exchanged as payment
  • mercantilism: an economic policy based on national policies of accumulating silver and gold by controlling markets with colonies and other countries through taxes and customs charges
  • subsistence farming: farming where farmers grow only enough to feed themselves and their families
  • capitalism: an economic system in which there is private ownership (as opposed to state ownership) and where there is an impetus to produce profit, and thereby wealth
  • socialism: an economic system in which there is government ownership (often referred to as  state run ) of goods and their production, with an impetus to share work and wealth equally among the members of a society
  • market socialism: a subtype of socialism that adopts certain traits of capitalism, like allowing limited private ownership or consulting market demand
  • mutualism: a form of socialism under which individuals and cooperative groups exchange products with one another on the basis of mutually satisfactory contracts
  • convergence theory: a sociological theory to explain how and why societies move toward similarity over time as their economies develop
  • recession: two or more consecutive quarters of economic decline
  • depression: a sustained recession across several economic sectors
  • career inheritance: a practice where children tend to enter the same or similar occupation as their parents

Section 18.2  Globalization and the Economy

  • globalization: the process of integrating governments, cultures, and financial markets through international trade into a single world market.
  • global assembly lines: a practice where products are assembled over the course of several international transactions
  • global commodity chains: internationally integrated economic links that connect workers and corporations for the purpose of manufacture and marketing
  • xenophobia: an illogical fear and even hatred of foreigners and foreign goods

Section 18.3  Work in the United States

  • outsourcing: a practice where jobs are contracted to an outside source, often in another country
  • automation: workers being replaced by technology
  • polarization: a practice where the differences between low-end and high-end jobs become greater and the number of people in the middle levels decreases
  • underemployment: a state in which a person accepts a lower paying, lower status job than his or her education and experience qualifies him or her to perform
  • structural unemployment: a societal level of disjuncture between people seeking jobs and the jobs that are available

Section 18.1 Economic Systems

The Wage Gap in the United States
Recent Economic Conditions

Economics of Agricultural, Industrial, and Postindustrial Societies
 The Agricultural Revolution
 The Industrial Revolution
 Postindustrial Societies and the Information Age
 Capitalism in Practice
 Sociaalism in Practice
Convergence Theory
Theoretical Perspectives on the Economy
 Functionalist Perspective
 Conflict Perspective
 Symbolic Interactionist Perspective

Section 18.2 Globalization and the Economy

What Is Globalization?
Aspects of Globalization

Section 18.3 Work in the United States

Polarization in the Workforce
Women in the Workforce
Immigration and the Workforce
Poverty in the United States

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