Social Institution of Economy

A. Workers ?means a person who has entered into or works under a contract of service or a training contract with an employer (whether by way of manual labor, clerical work or otherwise, and whether the contract is expressed or implied, and whether the contract is oral or in writing) 1) Alienation ?Karl Marx first applied the term to the situation of workers under early capitalism. The worker in factory performed only a fraction of the work that went into a product and therefore could feel little satisfaction in the product itself. (Fromm, 1961; Marx, 1961/1884)?

The term alienation is often used to describe the feeling of being powerless to control one’s own destiny. At work, people may feel alienated because their labor in divided up into activities that meaningless to them. (Blauner, 1964; Seeman, 1964) 2) Sociological Perspective on the Workplace ?Industrial sociology is concerned with the social organization of work and the types of interactions that occur in the workplace. a) Human Relation in Industry:

A Functionalist Perspective ?It is associated with Elton Mayo and his team, in a research they conducted which have a main goal to use experimental methods and observation of workers and managers on the job in an attempt to understand how the factory’s formal organization and goals affected by patterns of informal organization within the workplace. ?Mayo’s experiment were intended to determine what conditions would foster the highest rates of worker productivity. His observations convinced him that increased productivity could be obtained by emphasizing teamwork among workers and managers rather than through pay incentives or changes in such variables as lighting, temperature and rest periods. ?

Although Mayo’s researched focused on the interactions between workers and managers, the human relations approach that grew out of that research can be said to represent the functionalist perspective on the workplace because it stresses the function of managerial efforts in increasing worker productivity. b) Conflict at Work ?Industrial sociologist who take a conflict perspective feel that this approach automatically approves the goals of managers and fails to consider more basic causes of worker – management conflict, such as class conflict.?

Conflict-oriented industrial sociologists also study how class and status relations outside the workplace influence shop-floor cultures. ?A fundamental problem for conflict sociologist is the class conflict must be shown to exist; it cannot be assumed to exist simply because Marxian theory defined defines workers and business owners as opposing classes. c) Professionalization: An Interactionist Perspective ?A profession is a set of role relationship between “experts” and “clients,” in which the professional is an expert who offers knowledge and judgments to clients.

?Interactionist sociologists pay special attention to the role relationships that develop in various professions. They are particularly interested in the processes of professional socialization – learning the profession’s formal and informal norms. B. Technology and Economic Opportunities ?Throughout history humans have developed technology, applying knowledge to solve problems such as those associated with lack of natural resources or a given climate or geographical locations. ?Technological innovations have allowed many societies to develop economic activities in areas that once would have been considered almost uninhabitable. ?

The United Nations and other governmental bodies often distinguish among countries among countries based on how developed their economies are. a) Industrialized country (Developed country). It is a sovereign state that has a highly developed economy and advanced technological infrastructure relative to other less developed nations. b) Developing country (Less-developed country). It is a nation with a low living standard, underdeveloped industrial base, and low Human Development Index (HDI) relative to other countries.

Developing countries are, according to certain authors as Walt Whitman Rostow, countries in transition from various traditional lifestyles towards the modern lifestyle begun by the Industrial Revolution in the eighteenth and nineteenth centuries. c) Underdeveloped country (Least developed country). It is a country which, according to the United Nations, exhibits the lowest indicators of socio-economic development, with the lowest Human Development Index ratings of all countries in the world. Remember: The concept of stratifying countries according to their economic status originated in the late 1960s and the UN ratified the Resolution No.

2768 (XXVI) of 18 November 1971 as a basis. A country is classified in these criteria: 1) Poverty (changeable criterion) 2) Human resource weakness (based on indicators of nutrition, health, education and adult literacy) and 3) Economic vulnerability (based on instability of agricultural production, instability of exports of goods and services, economic importance of non- traditional activities, merchandise export concentration, handicap of economic smallness, and the percentage of population displaced by natural disasters)

?Technological advances allow societies to develop broader webs of economic activity and thus enhance their economic fortunes, but technological advances also require money. C. Political World and Economic Activity ?Many sociologists suggest that the power of business interested reflects the interrelationship of the political world and the economy, often referred to as the political economy. ?National Political Economies: a) Capitalism. An ideal type of economic system in the Weberian sense and generally is considered to have four major characteristics:

1) Individuals own the means of production (the ways by which products and goods are produced) 2) Profit motive (a desire to make money by selling goods and services more than they cost to produce) 3) Profits from economic exchanges (reinvested to expand business opportunities and generate greater future profits. 4) Free competition in the market (buyers and sellers are able to seek each other willingly and freely) ?Forms of Capitalism: 1) pure-form capitalism (laissez-faire capitalism). Literally, “hands-off” capitalism) and implies that the institutions of the economy and the polity are unrelated – that in fact there is no political economy.

2) welfare capitalism. Whereby a broad system of laws has been developed to protect workers and consumers in their economic transactions. b) Socialism. As an ideal type, it involves public, not private, as means of production and the government owns all resources and involves the elimination of economic competition and the profit motive through centralized government control of the economy. The goal of economic exchange is not earning profit, but providing for the needs of the people. ?Forms of Socialism: 1) pure-form socialism.

The web of economic relationships is determined by political decisions, and the polity and the economy are merged. 2) welfare socialism (democratic socialism). It contains elements of both socialism and capitalism and it involves government ownership and operation of some aspects of the economy. ?In fact, some scholars suggest that political economies around the world are becoming more similar. Convergence theory suggests that a mixed economic system, one blending elements of socialism and capitalism, is coming to characterize most countries of the world. ?International Political Economies:

a) Political power and relationships between societies have always been intertwined with economic needs and opportunities. For instance, historically large state societies developed as rulers aggressively expanded their territories to incorporate more land and resources. ?Imperialism (a practice where powerful state create a vast colonial empire by forcibly acquiring territories in others part of the world) ?Neo-imperialism (US has actively engaged on acquiring territories especially after World War II ended and the European colonial empires collapsed, its dominance was based less on direct military strength than on economic might) b)

A perspective called world systems theory, which was developed primarily by the sociologist Immanuel Wallerstein and inspired in large part by the writings of Karl Marx, suggests that this history of imperialism and neo-imperialism can explain why the system of global stratification persists. c) World systems theory looks at the network of economic relations between nations and suggests that, much as the capitalist class dominates the social class hierarchy. ?Elements of World Systems: 1) Core nations.

A powerful group of nations that dominates and exploits other nations around the world. They were the first to industrialize and develop capitalistic systems, and thus they have many competitive advantages over other nations. 2) Peripheral nations. Those nations at the edges of the world system, primarily because their role is selling raw materials to the core nations. They have also provided a cheap source of labor as many multinational corporations have established factories in countries around the world that manufacture everything. 3) Semiperiphery.

A group of nations that falls between the core and periphery and have extensive trading relationships with core nations but that are still much poorer than these countries. 4) External area. The countries that have few economic ties with the core nations and were not involved in the development of capitalism, it includes the least developed and most impoverished nations. ?World systems theory suggests that the global stratification system exists because it benefits the core nations; core nations are wealthy in large part because they have been able to exploit much poorer societies.

At the same time, Wallerstein and other proponents of world systems theory, stress that the global stratification system is dynamic – it changes as the fortunes of individual nations change. D. Social Policy and the Economy ?Social policy primarily refers to guidelines, principles, legislation and activities that affect the living conditions conducive to human welfare. The Department of Social Policy at the London School of Economics defines social policy as “an interdisciplinary and applied subject concerned with the analysis of societies’ responses to social need. ”

?Social Policy is focused on those aspects of the economy, society and policy that are necessary to human existence and the means by which they can be provided. ?The Malcolm Wiener Center for Social Policy at Harvard University describes social policy as “public policy and practice in the areas of health care, human services, criminal justice, inequality, education, and labor. ” ?Social policy might also be described as actions that affect the well-being of members of a society through shaping the distribution of and access to goods and resources in that society. [3] Social policy often deals with wicked problems.