1. Ch. 14- The Economy The transformation of economic systems The transformation of economic systems Least industrialized nations- market is combined business and social occasionLeast industrialized nations- market is combined business and social occasion Market- process of buying and selling Market- process of buying and selling Economy- system of distribution of goods and services Economy- system of distribution of goods and services

2. Preindustrial societies Preindustrial societies Hunting and gathering societies Hunting and gathering societies Subsistence economySubsistence economy Pastoral and horticultural societies Pastoral and horticultural societies Dependable food supply, settle downDependable food supply, settle down Social inequalitySocial inequality Agricultural societies Agricultural societies Specialized divisions of laborSpecialized divisions of labor Industrial societies Industrial societies Machines powered by fuelMachines powered by fuel

3. Conspicuous consumption Conspicuous consumption Show off wealth by elaborate consumption of goodsShow off wealth by elaborate consumption of goods Postindustrial societies Postindustrial societies Service sector, surplus of goodsService sector, surplus of goods Information explosion, Global villageInformation explosion, Global village Bioeconomic societies Bioeconomic societies Merge biology and economicsMerge biology and economics

4. Medium of exchange- means by which people value and exchange goods and services Medium of exchange- means by which people value and exchange goods and services Hunting/ gathering & pastoral/ horticultural Hunting/ gathering & pastoral/ horticultural Barter- direct exchange of one item for anotherBarter- direct exchange of one item for another Agricultural Agricultural Barter plus use of moneyBarter plus use of money Deposit receiptsDeposit receipts CurrencyCurrency Stored valueStored value

5. Industrial Industrial The Gold StandardThe Gold Standard Fiat moneyFiat money GDP (gross domestic product)GDP (gross domestic product) InflationInflation Checks/credit cardsChecks/credit cards Postindustrial (information society) Postindustrial (information society) Debit cardsDebit cards E-cashE-cash

6. World economic systems Capitalism Capitalism Private ownership of means of production Private ownership of means of production Market competition Market competition Pursuit of profit Pursuit of profit Pure capitalism (laissez-faire) Pure capitalism (laissez-faire) Current U.S. system (welfare/state capitalism) Current U.S. system (welfare/state capitalism)

7. Market restraints- laws and regulations that limit the capacity to manufacture and sell products Market restraints- laws and regulations that limit the capacity to manufacture and sell products Monopoly- control of an entire industry by a single company Monopoly- control of an entire industry by a single company Divest- selling off part of a business Divest- selling off part of a business Market forces- supply and demand determine production and prices Market forces- supply and demand determine production and prices

8. Socialism Socialism Public ownership of means of production Public ownership of means of production Central planning Central planning Distribution of goods w/out a profit motive Distribution of goods w/out a profit motive Committee decides products and prices for country Committee decides products and prices for country Everyone works for the gov’t Everyone works for the gov’t No pure form No pure form

9. Democratic socialism Democratic socialism Capitalism mixed w/ state ownership Capitalism mixed w/ state ownership Capitalists believe market forces should determine products and prices Capitalists believe market forces should determine products and prices Socialists believe an items value is based on the work that goes into it Socialists believe an items value is based on the work that goes into it

10. Criticisms Criticisms Capitalism- leads to social inequality and underemployment Capitalism- leads to social inequality and underemployment Socialism- does not respect individual rights Socialism- does not respect individual rights Convergence of capitalism and socialism Convergence of capitalism and socialism Convergence theory- mixed economic system Convergence theory- mixed economic system

11. Globalization of capitalism Globalization of capitalism Functionalist view Functionalist view Work is functional for society Work is functional for society Mechanical solidarity- sense of unity from doing similar activities Mechanical solidarity- sense of unity from doing similar activities Organic solidarity- interdependence that results from people needing others to fulfill their jobs Organic solidarity- interdependence that results from people needing others to fulfill their jobs Global division of labor Global division of labor

12. Conflict view Conflict view Multinational corporations operate across nat’l boundaries Multinational corporations operate across nat’l boundaries Headed by inner circle Headed by inner circle Strive for oligopoly- control of entire industry by several large companies Strive for oligopoly- control of entire industry by several large companies Powerful interlocking directorates Powerful interlocking directorates Global investing Global investing

13. Work in U.S. Society Decline of agriculture and the transition to postindustrial society Decline of agriculture and the transition to postindustrial society Women and work Women and work Women about 60% of workforce in 2002Women about 60% of workforce in 2002 More likely work if educatedMore likely work if educated More likely work if singleMore likely work if single The Quiet RevolutionThe Quiet Revolution

14. The Underground Economy The Underground Economy Informal/ off the booksInformal/ off the books Estimated to run 10-15% of regular economyEstimated to run 10-15% of regular economy Shrinking paychecks Shrinking paychecks Buying power downBuying power down Patterns of work and leisure Patterns of work and leisure Effects of industrializationEffects of industrialization Trends in leisureTrends in leisure Telecommuting (teleworking)Telecommuting (teleworking)

15. Implications of global capitalism Global trade Global trade Reduction/elimination of tariffs Reduction/elimination of tariffs Industrialized nations gain more wealth Industrialized nations gain more wealth Computer driven production Computer driven production