SOCL 2001 (Exam 3)

SOCL 2001 (Exam 3) - SOCL 2001 1 Economy 1 Barter System...

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SOCL 2001 3-12-07 Economy 1. Barter System – based on exchange of goods; tended to be efficient for smaller societies; limited by what goods are available and limited by what people can carry around 2. Money Economies – as societies got larger we needed a better way of doing things; something that is universally exchanged 3. Command Economies - the government tries to regulate most aspects of economy A. Feudalism i. Agrarian system based on large scale agriculture – how much land and money they could accumulate ii. Majority of people in these societies are “serfs” (people whoa re bound there and work the land) iii. Very common feature of medieval Europe – turned into more of a tenant system and then declined the feudal system B. Mercantilism i. Private individuals took care of the production of goods but the distribution of goods was regulated by the government ii. In Europe there was a rise of very strong monarchies iii. Importing and exporting goods required people to pay high taxes; faded after the Boston Tea Party C. Socialism/”Communism” i. Opposite of free market capitalism ii. Under socialism the government owns the major means of production (big businesses, farms) and distribution of goods a. Karl Marx – a person’s position in society is based on means of production b. Bourgeoisie – make a living off of other peoples labor c. Proletariat – have to sell their land to capitalists to make money The further capitalism goes on, the more and more the workers are going to be exploited. The proletariats are going to over throw the Bourgeoisie. Communism = where the workers control all aspects of production. Marx said there must be an interim in these societies where the government controls the means of production. Socialism = phase between capitalism and communism 4. Free Market Capitalism - opposite of command economies; any person is allowed to engage in any economic activity as long as it’s legal. “This is the best way to produce and distribute goods”, according to Adam Smith. “Private greed will result in the greatest public good.” A. The “invisible hand” i. Adam Smith’s idea ii. Supply and demand regulates the economy iii. As long as you have competition there is always a desire to make innovations 1
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SOCL 2001 B. Problems i. Distribution of goods is based on the ability to pay, not based on need. You need it, but can’t pay for it – TOO BAD! Ex: Health care ii. Tendency toward monopoly – big businesses want to reduce competition and the more difficult you make it for new firms to enter iii. Employers always want to exploit workers. No control over materials – control over labor costs: labor $ , revenue iv. Boom and bust cycles – economy is always swinging back and forth Distribution was supposed to be based on need. No competition
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This note was uploaded on 04/17/2008 for the course SOCL 2001 taught by Professor Mecom during the Spring '07 term at LSU.

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SOCL 2001 (Exam 3) - SOCL 2001 1 Economy 1 Barter System...

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