Week 10: Work and the Economy
Work remains central to our existence. It is necessary for the survival of most people.
Work is a social process. The way in which work is presently organized can be
questioned and transformed.
People seek meaning in their work.
The economy is the social institution that ensures the maintenance of society through the
production, distribution, and consumption of goods and services.
Mode of Production (MOP): the overall system of economic activity in a given society (shaped
by the unique arrangement of productive forces and relations of production).
Human societies and social relations of production have been changing over time
The ways people organize their productive systems can offer us clues about the
organization of social relations in that society. One of the earliest forms of economic
Hunting and Gathering Societies:
General characteristics of hunting and gathering societies were:
no accumulation of surplus minimal exchange
simple division of labor
no private accumulation of wealth
existence of surplus
subsistence & market economy
Increasing complexity in division of labour
social inequalities are ascribed
o the household was seen as place of both work and residence
Capitalism: an economic system characterized by private ownership of the means of production,
from which personal profits can be derived through market competition.
Distinctive features of capitalism:
Private ownership of the means of production
o An economy driven by profit motive
o Competitive market relations Generalization of commodity relations
The profit motive of capitalism demands specific organization of production:
o Maximum efficiency
o Minimum wages
o Extraction of maximum labour within a working day
Some technical terms to know:
Commodity: any object that is exchanged in the marketplace
Use-value: the value of a commodity to satisfy a human want
Exchange-value: value of a commodity in the process of exchange
Value: Socially necessary labour embedded in a commodity
Price: The value of a commodity expressed in monetary terms in the market
Anarchy of production: Economic activity happens randomly not according to societal
needs but as a result of the actions of various independent enterprises and corporations
each seeking to maximize its own profits.
Capitalist economy first emerged in Western Europe in the 15th Century and became the
dominant economic system in the world economy by the 19th Century. Its expansion took
Early Capitalism (Merchantilism): Commercial capitalism (1500-1800)
primitive accumulation of capital through:
o plunder of colonies
o slave trade
Emergence of the working class through:
Industrial capitalism: (1800-1890)
complex technical division of labour
increasing regulation of work
separation of mental and manual labour
free-trade (laissez-faire) ideology
nation state formation
Monopoly Capitalism (Imperialism) 1890-1930
concentration of production and capital leads to emergence of monopolies
merging of financial & industrial capital leading to financial oligarchies
export of capital and territorial division of the world among capitalist countries
legal separation of enterprise from those who own it and those who control it.
this protects owners and executives from personal liabilities Concentration and Centralization:
Oligopoly: when several companies control a sector or industry
Shared monopoly: when four or fewer companies supply 50 percent or more of a
particular market (Eitzen and Baca Zinn, 1995).
Conglomerates: combinations of business in different commercial areas, all of which are
owned by one holding company.
Interlocking corporate directorates: members of the board of directors of one
corporation who also sit on the board(s) of other corporations
Concerns about Corporate Concentration:
concentration of wealth and power lead to lesser democratic participation in the
decision making process
makes it difficult for smaller firms, countries or labour groups in competing or
negotiating with the bigger firms and conglomerates
making local development plans difficult and dependent on global strategies of
corporations tend to expand and diversify by mergers or buying existing firms instead
of developing new productive capacity
means lesser competition in the market place
Role of the State in Capitalist Economies: Structuralist Perspective of James O’Connor
O’Connor argued that the state had three main functions in modern capitalist economies:
Accumulation: creating and maintaining the conditions for profitable capital
Legitimation: maintaining social harmony, in large measure to justify the current
class structure and the right of the ruling class to rule
Coercion: using force, when necessary, to repress the subordinate individuals or
classes on behalf of the dominant class.
Forms of Interventionist State in Capitalist Economies:
List and protectionism: state protection of infant industries through tax concessions &
other incentives; and restricting imports through tariff barriers and quotas
Keynesian model: periodic booms & slumps are inherent problems of capitalism.
State spending to create employment & increase incomes to stimulate demand &
Welfare state: capitalism may create potential for economic