Work%20and%20Economy%20NOTES - Soc. 202 Work and Economy...

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Jake Day Work and Economy November 14, 2007 Economy The system by which goods and services are produced, distributed, and consumed. A system for producing, distributing, and consuming goods and services will depend on both its level of development and its political ideology. Three Major Economic Systems Capitalism o An economic system based on the principles of market competition, private property, and the pursuit of profit. o Under capitalism, owners keep a surplus of what is generated by the economy; this is their profit , which may be in the form of money, other financial assets, and other commodities. o An economic system in which the means of production are held largely in private hands, and the main incentive for economic activity is the accumulation of profits (Schaefer 2008). § In practice, capitalist systems vary in the degree to which the government regulates private ownership and economic activity. o Laissez-faire : form of capitalism proposed by Adam Smith where businesses compete freely, with minimal government intervention. Under such a system the market regulates itself. o While private ownership and maximization of profits still remain the most significant characteristics of capitalist economic systems. However, today’s form of capitalism features extensive government regulation or economic relations. Socialism o An economic institution characterized by state ownership and management of the basic industries; that is, the means of production are the property of the state. o Marx argued that due to the inherent inconsistencies in capitalism, it would eventually give way to egalitarian, state-dominated socialism, followed by a transition to stateless, classless communism. o In fact, most countries have a capitalist and socialist mix (ex: social security). o Under socialism, the means of production and distribution in a society are collectively rather than privately owned (Schaeffer 2008). The basic objective of the economic system is to meet people’s needs rather than to maximize profits. o They reject the idea that laissez-faire economic relations benefit the general public. They believe that a democratic controlled central government, acting on behalf of the people, should make basic economic decisions. o
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This note was uploaded on 03/30/2008 for the course SOCIOLOGY 202 taught by Professor C.dawson during the Fall '08 term at N.C. State.

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Work%20and%20Economy%20NOTES - Soc. 202 Work and Economy...

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