Economic Systems PDF

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LuckiestForethought

Uploaded by LuckiestForethought

University of South Australia

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economic systems social psychology economic contexts social sciences

Summary

This document examines diverse economic systems, detailing four key types: subsistence, barter, informal, and capitalist. It describes the characteristics of each system, along with their social and economic implications. The document also delves into the effects of money on individual behavior and societal structures. It is intended as a learning material for students.

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Social and Community Psychology Engulfing Force - Economic Contexts Economic Systems and their Effects What is Economics “A social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services” (Merriam-Webster, 2020) • Economics as...

Social and Community Psychology Engulfing Force - Economic Contexts Economic Systems and their Effects What is Economics “A social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services” (Merriam-Webster, 2020) • Economics as a concept (anthropology, sociology) • “Provisioning” or what people produce • Transactions, exchanges, and strategies • Describing what people trade, exchange, and gift each other (e.g. Malinowski, 1922/1978 – Kula ring) On-The-Ground Economic / Substantivism (Polanyi, 1944/2001) Formalist Model (economics) • Neoclassical economics • How people make rational decisions on scarce resources to ‘get the best deal’ • Rational, preferences, for maximisation of utility • People should pick the best option and anything else is an error Substantivist Model (history, anthropology, some sociology) • How people live in their social, cultural, and natural environment • Substance of the exchange or for us context • This could be used to explain why people are often irrational, sometimes altruistic, and generally avoid being self-interested Put Simply “The outstanding discovery of recent historical and anthropological research is that man’s economy, as a rule, is submerged in his social relationships.” (Polanyi, 1944/2001, p. 48) • Who is involved? • What can you get? • What function does this serve? • What will keep you and your people going? Four Systems Subsistence • Getting enough to live • Getting food from the world • hunting and gathering (mobile life – nomadic) (See Burch, 1988) • Husbandry - raising crops and animals (static – specialised) • Stay in one place = specialise • = surplus for more complex exchanges Four Systems Barter • Not Haggling Price • Specialisation needed formal trade • Static life means static markets • Said to be “primitive” • Not so – Very sophisticated • Lots of social properties and strategies • Still happens when capitalist money markets fail Four Systems Informal Economics • Shadow Economies • Odd Jobs • Crime • Community systems • Tied to • • • • Opportunities History Culture Politics Four Systems Capitalism • Stability on common land, trading with people you know was common • Strangers in cities and industrialisation increased • Reduced common land (like enclosure laws) • Need for money to trade more • Rules and laws formalised economic trade (Polanyi, 1944/2001) • especially as people moved to cities and worked for money selling their labour • Now, we mostly trade for money with strangers • We can get strangers to do almost anything for us too • Rarely need family or a strong relationship or trust to get things done Current Expected Economic Behaviours • Competing with these other strangers and don’t feel much about them (Simmel, 1900/2004) • Competition and entrepreneurship and individualisation (Weber, 1927/2003) • Are we truly acting alone? • Think about the richest people? How hustle works? Where do you get your resources? • Work is key (labour – Karl Marx and Friedrich Engels) • You sell your labour, not your product • Contracts pay for work, not products (usually) Bureaucracy – The controlling context • The system (law and policy) is bureaucratic • Family doesn’t decide what the rules are • Also, not politicians and those that control ‘the economy’ (formalism) • You need to get good at the bureaucracy • The bureaucracy organises contracts and, therefore, relationships • Money through the market becomes the medium for everything • Even things that were not buyable (Labour, Land and Money - Polanyi, 1944/2001) Effects of Money 3. People develop a good knowledge of the behaviours of money rather than the behaviours of people. • Subsistence or bartering = people, relationships, negotiating, conflict resolution, etc. • Capitalism = money over people, assuming competition, and how to write contracts. 17. Allows individuals to become independent of groups and society, thereby facilitating forms of individualism and individual personality (Simmel). • Individuals in groups or communities can escape their influence. Effects of Money 6. Same thing exchanged - Everything is valued in money • Including human life (life and death insurance) 7. Prevent any relationship - Can stop relationships from forming • Just use money ‘alone’, earn money from new people all the time, and never need a permanent relationship 8. Promotes individualism • Be entrepreneurial and get your own money (from strangers) 9. Smaller families • Move away from kin; rather than more hands helping on the land or gaining resources, you want fewer people, so the flexible money goes further What is Expected of You • You know the four systems, can tell them apart, and some of their properties • You can filter through the four systems for possibilities • You understand the relationships and exchanges of resources that make up our current system • You can observe for the effects of the current market economy • You can start to backwards engineer an observation from a effect or property of an economic system References Burch, E. S. (1988). Modes of Exchange in north-West Alaska, in T. Ingold, D. Riches, and J. Woodburn (eds.), Hunters and Gathers 2: Property, power, and ideology (pp. 95-109). Oxford: Berg Economics. (2020). In Merriam-Webster.com Dictionary. Retrieved from https://www.merriam-webster.com/dictionary/economics Malinowski, B. (1922/1978) Argonauts of the Western Pacific: An Account of Native Enterprise and Adventure in the Archipelagos of Melanesian New Guinea. Routledge, London Polanyi, K. (1944/2001). The great transformation: The political and economic origins of our time. Beacon press Social and Community Psychology Engulfing Force - Economic Contexts Economic Systems and their Effects

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