Economy (chapter 13)

the social institution that ensures the maintenance of society through the production, distribution, and consumption of goods and services. 

The economy

Three sectors of the economy.

• Primary (preindustrial) 

• Secondary(industrial) 

• Tertiary (postindustrial)

the extraction of raw materials and natural resources from the environment.

Example: warriors are necessary to protect the surplus goods from plunder by outsiders.

primary

the processing of raw materials (from the primary sector) into finished goods.

Example:steel workers process metal ore; auto workers then convert the ore into automobiles, trucks, and buses

secondary

the provision of services rather than goods—as a primary source of livelihood for workers and profit for owners and corporate shareholders.

Examples:production includes a wide range of activities, such as fast-food service, transportation, communication, education, real estate, advertising, sports, and entertainment. Google, Uber, and home-food-delivery services

tertiary

an economic system characterized by public ownership of the means of production, the pursuit of collective goals, and centralized decision making.

Socialism

combines elements of a capitalist economy with elements of a socialist economy.

Mixed economies

Control of all the market is by one producer (Microsoft Lawsuits)

Example you’re the only one the sells chocolate cake.

Monopoly

control of all the market by a few producers

example: An example is the music industry, in which a few giant companies are behind many of the labels and artists

Oligopoly

-High income countries mainly in this tertiary/ low income mostly primary
- Middle income mostly secondary or in between stages
-Different regions of the world specialize in different sectors

Global economy

meaning less government interference

Laissez Faire economy

When demand is higher than supply, a “boom” period occurs until prices rise high enough where people wont pay them anymore or people borrow (credit) and get into debt until credit is gone.

Economic Cycle

o Economy determines who gets what, therefore whoever controls the economy also controls who gets what
o For example, US multinational corporations decide Mexican workers get less than US workers

Wallerstein

◦ Members of Boards of Directors can sit on multiple boards, making decisions that can influence prices
◦ Translates into same type of effect as a monopoly

example:papa john’s , and pizza hut and their boards of director are sitting on one another’s boards of directors and they “okay we are going charge $30 for large pizza and 2 liter

Interlocking Directorates

Individual self-interest in accumulating wealth and private property, people are allowed to work for their family

In order for a capitalist society to be successful, there needs to be competition and this is because the economy is essentially a consumer-guided economy, meaning consumers' purchasing habits more or less work to set prices.

pursuit of personal profits

Working for each other or for the good of society, not just for yourself or your own
family.

Pursuit of collective goal

is an economic system characterized by private ownership of the means of production, from which personal profits can be derived through market competition and without government intervention.

Global capitalism