Economics

Economics  Economic system – part of society that deals with production, distribution, and consumption of goods and services  Tools used to produce  Relationship of tools to people and people to eachother in the process of producing, distributing, and consuming goods

Economics  Society and economics are interdependent  Culture shapes goals of the people and how they achieve those goals  Organization of production has consequences for family structure and political system

Economic behavior  Economics is the study of the decisions people and societies make about how to use scarce resources to produce and distribute goods and services  Based on the idea of scarcity – unlimited wants, limited resources

Economic behavior  People will do what gives them the greatest benefit = economizing behavior  Greatest benefit depends on your motivation…money, grades, time with family and friends, …  Prestige varies  Consumption, display of goods  Generosity, giving away of goods

Production  Allocation of resources  Organization of resources

Production- Allocation of Resources  Productive resources – things you need to participate in the economy  Land, water, tool making materials, fishing boats, knowledge  As population and social complexity increase, more resources controlled by fewer people

Production- Allocation of Resources  Foragers  Productive resources = hunting weapons, food gathering tools, knowledge  Live in small groups that share land with flexible boundaries that change as food availability changes and the group moves

Production- Allocation of Resources  Pastoralists  Productive resources = land, water, and livestock  Kinship groups share access to pasture  Head of household owns livestock  Animals require a lot of care  Negotiate access to pasture surrounding villages they pass through

Production- Allocation of Resources  Horticulturalists  Productive resources = land, tools, knowledge, storage facilities  Land owned by kin group, members given permission to use plots  Clearing land requires labor  Where land scarce or population high, competition for land may lead to war

Production- Allocation of Resources  Agriculturalists  Productive resources = Complex tools, land, water,  Surplus of food supports more people  Individual landowners and laborers who work fields  Leads to more complex society with ruling elite

Production – Organization of Labor  Nonindustrial societies  Household is the unit of production/consumption  Goals are often social or religious  Labor is part of membership in kin group  Industrial societies  Business firm is unit of production  Goal is economic growth  Labor is commodity, bought and sold on market

Production – Organization of Labor  Division of Labor by Sex  Women give birth, nurse, care for children  Foraging – women forage, men hunt  Horticulture – women grow staple foods, men grow trade foods  Agriculture – women spend more time in childcare, men grow trade crops and have capital in marketplace; women more dependent

Production – Organization of Labor  Specialization of Labor  Complex agriculture of storable foods (grain), increased population of specialists  Specialists produce goods, arts, religion, services

Distribution  Exchange of goods  Reciprocity  Redistribution  Market exchange

Distribution  Reciprocity  Mutual give and take among people of equal status  Generalized reciprocity  Balanced reciprocity  Negative reciprocity

Distribution  Reciprocity  Generalized reciprocity  Distribution of goods with no immediate or specific return expected  Successful hunter distributes meat to community  Gains credit for future return, prestige, satisfaction  Balanced reciprocity  Negative reciprocity

Distribution  Reciprocity  Generalized reciprocity  Balanced reciprocity  Clear obligation to return, within time limit, goods of equal value  Gift giving, trading partners  Negative reciprocity

Distribution  Reciprocity  Generalized reciprocity  Balanced reciprocity  Negative reciprocity  When trade is conducted for material advantage, desire to get something for nothing or to get the better end of a bargain  Gambling, theft, cheating, haggling  Large societies where exchange is between strangers

Distribution  Redistribution  Goods are collected from the group then given out in a new pattern, like taxes  Involves social center  Potlatch- Pacific Northwest Native American redistribution system where chiefs who gave away or destroyed goods gained prestige  Leveling mechanisms

Distribution  Redistribution  Leveling mechanisms – practices, values or forms of social organization that even out the distribution of wealth  Force accumulated resources to be used in ways that reduce economic differences  Cargo systems – wealthy community members are elected to offices that require them to provide food and drink during festivals

Distribution  Market Exchange – goods and services are bought and sold for money, value determined by supply and demand  Social and political roles not important  Main goal is maximizing material gain  Productive resources become capital when used to increase owner’s financial wealth  Capitalism

Distribution  Market Exchange  Capitalism - people work for wages, land and capital goods are privately owned, capital is invested for individual profit  Capital owned by small portion of population  Most people’s primary resource is their labor  Value of worker’s contribution to production is always greater than compensation they receive