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Definitions and Significance.docx

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Department
Social Science
Course
SOSC 2210
Professor
Mark Peacock
Semester
Winter

Description
Definitions and SignificanceMeans of ProductionRefers to physical nonhuman inputs used in production that is the means of production includes capital assets used to produce wealth such as machinery tools and factories including both infrastructural capital and natural capital The means of production can be described that in an agrarian society the soil and the shovel are the means of production in an industrial society mines and the factories and in knowledge economy offices and computers The means of production can be used in a broader sense that it includes the means of distribution such as stores the internet and railroadsSignificance Marx used the term mode of production to refer to the specific organization of economic production in a given society A mode of production includes the means of production used by a given society such as factories and other facilities machines and raw materials It also includes labor and the organization of the labor forcePrivate PropertyA fundamental economic institution in which resources property are owned and controlled by households and businesses the private sector rather than government the public sector Private property provides critical incentives for the efficient operation of competitive market and a marketoriented economy Under privateproperty ownership control over resources is relinquished that is sold when the owners are compensated for their opportunity costs Significance This term is important because it is one of the most fundamental requirements of a capitalist economic system Private Property comprises one of the most complex and difficult sets of issues that any society has to resolve An example would be an apartment owner who has complete property rights would have rights to determine whether he to rent it out and if so which tenant to rent to to live in it himself or to use it in any peaceful way If the apartment owner rents out the apartment he also has the authority to all rental income from the property Neoliberalism An approach to economics and social studies in which control of economic factors is shifted from the public sector to the private sector Drawing upon principles of neoclassical economics neoliberalism suggests that governments reduce deficit spending limit subsidies reform tax law to broaden the tax base remove fixed exchange rates open up markets to trade by limiting protectionism privatize staterun businesses allow private property and back deregulationSignificance The use of the term liberal in economics is different from its use in politics Liberalism in economics refers to freeing up the economy by removing barriers and restrictions to what actors can do Neoliberalisms policies seek to create a laissezfaire atmosphere for economic developmentMarketsMarket SocietyAn economy in which decisions regarding investment production and distribution are based on supply and demand and prices of goods and services are determined in a free price system The major defining characteristic of a market economy is that decisions on investment and the allocation of producer goods are mainly made through markets This is contrasted with a planned economy where investment and production decisions are embodied in a plan of productionSignificance The term market economy used by itself can be somewhat misleading For example the United States constitutes a mixed economy substantial market regulation agricultural subsidies extensive governmentfunded research and development MedicareMedicaid yet at the same time it is rooted in a market economy Different perspectives exist as to how strong a role the government should have in both guiding the market economy and addressing the inequalities the market producesFor a market to be competitive there must be more than a single buyer or seller It has been suggested that two people may trade but it takes at least three persons to have a market so that there is competition in at least one of its two sides However competitive markets as understood in formal economic theory rely on much larger numbers of both buyers and sellers A market with single seller and multiple buyers is a monopoly A market with a single buyer and multiple sellers is a monopsony These are the extremes of imperfect competition Examples of markets include physical retail markets labor markets international currency and commodity markets markets for intermediate goods etc RadicalismSocialism Capitalism produces inequality exploitation and alienation which can only be moderated but never eliminated within that system It is an economic system characterised by social ownership of the means of production and cooperative management of the economy Social ownership may refer to cooperative enterprises common ownership state ownership citizen ownership of equity or any combination of these There are many varieties of socialism and there is no single definition encapsulating all of them They differ in the type of social ownership they advocate the degree to which they rely on markets or planning how management is to be organised within productive institutions and the role of the state in constructing socialism SignificanceKarl Marx and Friedrich Engels argued that socialism would emerge from historical necessity as capitalism rendered itself obsolete and unsustainable from increasing internal contradictions emerging from the development of the productive forces and technology It was these advances in the productive forces combined with the old social relations of production of capitalism that would generate contradictions leading to workingclass consciousnessIndustrialization It is the process in which a society transforms itself from a predominantly agricultural society into one based on the manufacturing of goods and services Characteristics of industrialization include the use of technological innovation to solve problems as opposed to reliance upon conditions outside human control such as the weather as well as more efficient division of labor and economic growthSignificance Industrialization is an outgrowth of capitalism it resulted in the growth and development of urbanizationIt transformed the economy to accept capitalist properties and goals in regard supply and demand The goals were met by collaborating human labour with machines to maximize profitThe process encouraged innovation and technological
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