Microeconomics: Individual Choice in Communities
Economics is the study of social construction of the material side of life.
Focuses on the social organization of production and exchange.
Examines production as a social process where people work with each other (exchanging and
sharing the products of their labor).
Two types of division of labor:
1. Detailed Division (in production)
2. Social Division (in exchange of different final products produced by different
Production and material life require people to communicate w/each other. (very social)
Begins with division of labor.
Social institutions and rules governing them shape social interactions.
Also known as the “Queen of the Social Sciences”. (first and oldest social science).
Human consciousness is shaped by participation in material life.
Choice of economic theory = choice of politics
Economic processes are shaped by social institutions such as systems of taxation, political
representation, law, and property.
Economic theory is central to contests over the justification for any social system.
How we view the economy = how we feel about distribution of wealth and power.
Battleground: two sides →
1. Distribution of wealth and power is fair b/c it distributes economic
rewards according to merit. (encourages maximum output at minimum
2. Existing distribution is unfair b/c it grants rewards to chance, force, or
other power. (discourages activity which would raise productivity.)
Conservatives base their economics in individual action. They view economic activity as a
matter of individual behavior where individuals maximize their welfare subject to the constraints
imposed by stingy nature.
Methodological individualism: Studies human behavior from the perspective of individuals and