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Lecture 11 Political economics

Lecture 11 Political economics - Lecture 11 Outline...

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1 Lecture 11 Outline 09/29/11 Political Economics Modes of Production An economy is a system of production, distribution, exchange, and consumption of resources. Mode of production is defined as a way of organizing production —“a set of social re lations through which labor is deployed to wrest energy from nature using tools, skills, organization, and knowledge” (Wolf 1982: 75). Means of Production Means of production include land, labor, technology, materials, and capital. Alienation in Industrial Economies By definition, a worker is alienated from the product of her or his work when the product is sold, with the profit going to an employer, while the worker is paid a wage. A consequence of alienation is that a worker has less personal investment in the product, in contrast to the relationship existing between worker and product in nonindustrial societies.
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2 Economizing and Maximization Classical economic theory assumed that individuals universally acted rationally, by economizing to maximize profits, but comparative data shows that people frequently respond to other motivations than profit. Alternative Ends People devote their time, resources, and energy to five broad categories of ends: subsistence, replacement, social, ceremonial, and rent. 1. Subsistence fund: work is done to replace calories lost through life activities. 2. Replacement fund: work is expended maintaining the technology necessary for life (broadly defined). 3. Social fund: work is expended to establish and maintain social ties. 4. Ceremonial fund: work is expended to fulfill ritual obligations. 5. Rent fund: work is expended to satisfy the obligations owed (or inflicted by) political or economic superiors.
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3 Distribution and Exchange The Market Principle The market principle occurs when exchange rates and organization are governed by a monetary standard. Value is determined by the law of supply and demand. The market principle is common to industrial societies. Redistribution Redistribution is the predominant mode of exchange in chiefdoms and some nonindustrial states.
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