HREQ 1720 Chapter One Notes.docx

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Department
Human Rights and Equity Studies
Course
HREQ 1720
Professor
Marc Weinstein
Semester
Summer

Description
HREQ 1720 CHAPTER ONE: The Economic Problem May 9 2010 {Economics} is the process of providing for the material well-being of society. It is the study of how humankind secures its daily bread. How human kind ensures its material sufficiency. How societies arrange for their material provisioning  The quest for bread is a moving force in human destiny, concealed behind: “This history of international crime and mass murder which has been advertised as the history of mankind.” THE INDIVIDUAL AND SOCIETY  Economic history must begin with the crucial problem of survival and on how humankind has solved that problem  The underlying problem of survival=our helplessness as economic individuals  This portion of humankind may suffer great poverty, but it also knows a certain economic independence. If it did not, it would have been wiped out centuries ago  In prosperous and secure societies there is an extreme dependence on others o No longer envisage the solitary individual o The richer the nation, the more apparent is this inability of its average inhabitant to survive unaided and alone Division of Labour  Enhances our capacity, enabling us to benefit from other people’s skills as well as our own  Face a bad strike, entire economic machines falter because a strategic few cease to perform accustomed tasks Economics and Scarcity  Humankind, not nature, is the source of most of our economic problems  If people were content to live at a level of peasants, we would experience little to no scarcity, and economic problems would virtually disappear o As the ability to increase nature’s yield has risen, so has the reach of human wants o Scarcity as a psychological experience becomes more pronounced as people grow wealthier  Economics is than ultimately concerned with the appetite of the human being and the productive capability of the community The Tasks of Economic Society 1. Assurance of the production of enough goods/services for survival 2. Distribution of the fruits so more production can take place PRODUCTION AND DISTRIBUTION Mobilizing Effort  The production problem = avoiding waste and utilizing social effort  Basic problem of production is to devise social institutions that will mobilize human energy for productive purposes  Not a condition imposed by the scarcity of nature  Lacking a social mechanism to mobilize human energy when there are jobs to be done, but a huge unemployment force still exists Allocating Effort  Employment is only the first step in the production problem o Must not only be put to work, but put to work to produce goods/services  In addition to assuring a large enough quantity of social effort, the economic institutions of society must also assure a viable allocation of that social effort  The act of production in and of itself, does not fully answer the requirements for survival o Society must now distribute those goods to the process can continue Distributing Output  Workers are often unable to work effectively because of meager compensation  Distribution mechanism may also fail when rewards do not succeed in persuading people to perform tasks o Potential of rashes of absenteeism and lack of work ethic  A viable economic society, must not only come obstacles in nature, but contain and control the intransigence of human nature THREE SOLUTIONS TO THE ECONOMIC PROBLEM Tradition  Both production and distribution are based on procedures devised in the distant past, ratified by long process of historic trial and error, maintained by powerful forces of custom and belief  Universal need of the young to follow in the footsteps of their elders  Hereditary chain ensures skills and jobs will be staffed from generation to generation  “every man was bound by a principle of religion to follow the occupation of his father and was supposed to commit the most horrible sacrilege if he changed it for another” Adam Smith, first economist  Birth determined one’s role in life  Repetitive cycle of society, ensuring society’s work would be done every day  However, tradition regularly allocated women to work in nonindustrial societies The Cost of Tradition  Commonly encountered in primitive agrarian or nonindustrial societies  Tips for waiters, allowances, work bonuses are older ways of distributing goods  Differentials between men’s and women’s pay for equal work  Its solution to the problems of production and distribution is a static one  Tradition solves the economic problem, but it does so at the cost of economic progress Command  Imposed authority of economic command  Organization of system based on orders of an economic commander in chief  Superimposed upon a traditional social base  Pharaohs of Egypt exerted their economic dictates above traditional agricultural practice o Work that built the pyramids, roads, and temples  Despotisms of medieval and classical China and Europe, in any slave economy, or even today o Producing the Great Wall o Ancient Rome o Taxes  In times of crises, martial law o Utility in meeting emergencies  No inherent effect on slowing down economy
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