Economic Sociology Terms Chapter 4

Economic Organization has two “parts”:

• Infrastructure (economic organization)

• Superstructure (culture, politics, religion)

These influence each other

Capitalism

The commodification of labor. The system focuses on constant profit-making.

Under capitalism labor is voluntary

Marxist Formulation

M → C → M’

M: Money (initial capital)

C: Commodity (the goods or labor purchased with the initial capital)

M’: More Money (money + surplus value after selling a product)

Surplus value (profit)

Value that exceeds the necessary product to survive & reproduce labor at society level (or excess output); not compensated directly to workers, but appropriated by capitalists.

Forms of Economic Growth (within capitalism)

1. Distribution

2. Redistribution (state centred)

3. Reciprocity

4. Exchange

Explain Distribution!

In the production-distribution-consumption model of capitalism, distribution is the process that divides the produced goods and services among consumers, acting as the intermediary between production and consumption. It involves the movement of products from manufacturers to markets and ultimately to individuals, often through transportation networks, retail systems, and digital channels. In a capitalist system, distribution is primarily driven by market forces, such as supply and demand, and aims to get goods and services into the hands of those who can afford them

Explain Redistribution (state centred)!

Taxes. The Government collects and redistributes resources. Who gives and receives is decided by the state.

Explain Reciprocity!

Exchange based on personal/social relatopnships. Giving now with the expectation to receive something back later. Like I help you now, you help me later.

Common in families, communities, and traditional societies.

Explain Exchange!

Dominant form of capitalism!

goods/services exchanged directly between buyers and sellers

prices —> demand supply curve

driven by profit and competition

Instant exchange

Types of Market Capitalism as of Max Weber

Rational Capitalism

Political Capitalism

Traditional Capitalism

Explain Rational Capitalism!

Free Market Trade and Production. Exchanges happen through voluntary transactions. Speculation and Financial Markets.

Explain Political Capitalism!

Predatory profits: profit made due to political power or influence

Gains from force or domination

Unusual deals with political authorities

Explain Traditional Capitalism!

Profit based on long-standing customs, privileges, or inherited positions