Economics

EconomicsEconomics

EconomicsEconomics

Economic system – part of society thatdeals with production, distribution, andconsumption of goods and servicesEconomic system – part of society thatdeals with production, distribution, andconsumption of goods and services

Tools used to produceTools used to produce

Relationship of tools to people and people toeachother in the process of producing,distributing, and consuming goodsRelationship of tools to people and people toeachother in the process of producing,distributing, and consuming goods

EconomicsEconomics

Society and economics are interdependentSociety and economics are interdependent

Culture shapes goals of the people and howthey achieve those goalsCulture shapes goals of the people and howthey achieve those goals

Organization of production has consequencesfor family structure and political systemOrganization of production has consequencesfor family structure and political system

Economic behaviorEconomic behavior

Economics is the study of the decisionspeople and societies make about how touse scarce resources to produce anddistribute goods and servicesEconomics is the study of the decisionspeople and societies make about how touse scarce resources to produce anddistribute goods and services

Based on the idea of scarcity – unlimitedwants, limited resourcesBased on the idea of scarcity – unlimitedwants, limited resources

Economic behaviorEconomic behavior

People will do what gives them thegreatest benefit = economizing behaviorPeople will do what gives them thegreatest benefit = economizing behavior

Greatest benefit depends on yourmotivation…money, grades, time withfamily and friends, …Greatest benefit depends on yourmotivation…money, grades, time withfamily and friends, …

Prestige variesPrestige varies

Consumption, display of goodsConsumption, display of goods

Generosity, giving away of goodsGenerosity, giving away of goods

ProductionProduction

Allocation of resourcesAllocation of resources

Organization of resourcesOrganization of resources

Production-Allocation of ResourcesProduction-Allocation of Resources

Productive resources – things you needto participate in the economyProductive resources – things you needto participate in the economy

Land, water, tool making materials, fishingboats, knowledgeLand, water, tool making materials, fishingboats, knowledge

As population and social complexityincrease, more resources controlled byfewer peopleAs population and social complexityincrease, more resources controlled byfewer people

Production-Allocation of ResourcesProduction-Allocation of Resources

ForagersForagers

Productive resources = hunting weapons,food gathering tools, knowledgeProductive resources = hunting weapons,food gathering tools, knowledge

Live in small groups that share land withflexible boundaries that change as foodavailability changes and the group movesLive in small groups that share land withflexible boundaries that change as foodavailability changes and the group moves

Production-Allocation of ResourcesProduction-Allocation of Resources

PastoralistsPastoralists

Productive resources = land, water, andlivestockProductive resources = land, water, andlivestock

Kinship groups share access to pastureKinship groups share access to pasture

Head of household owns livestockHead of household owns livestock

Animals require a lot of careAnimals require a lot of care

Negotiate access to pasture surroundingvillages they pass throughNegotiate access to pasture surroundingvillages they pass through

Production-Allocation of ResourcesProduction-Allocation of Resources

HorticulturalistsHorticulturalists

Productive resources = land, tools,knowledge, storage facilitiesProductive resources = land, tools,knowledge, storage facilities

Land owned by kin group, members givenpermission to use plotsLand owned by kin group, members givenpermission to use plots

Clearing land requires laborClearing land requires labor

Where land scarce or population high,competition for land may lead to warWhere land scarce or population high,competition for land may lead to war

Production-Allocation of ResourcesProduction-Allocation of Resources

AgriculturalistsAgriculturalists

Productive resources = Complex tools, land,water,Productive resources = Complex tools, land,water,

Surplus of food supports more peopleSurplus of food supports more people

Individual landowners and laborers whowork fieldsIndividual landowners and laborers whowork fields

Leads to more complex society with rulingeliteLeads to more complex society with rulingelite

Production –Organization of LaborProduction –Organization of Labor

Nonindustrial societiesNonindustrial societies

Household is the unit of production/consumptionHousehold is the unit of production/consumption

Goals are often social or religiousGoals are often social or religious

Labor is part of membership in kin groupLabor is part of membership in kin group

Industrial societiesIndustrial societies

Business firm is unit of productionBusiness firm is unit of production

Goal is economic growthGoal is economic growth

Labor is commodity, bought and sold on marketLabor is commodity, bought and sold on market

Production –Organization of LaborProduction –Organization of Labor

Division of Labor by SexDivision of Labor by Sex

Women give birth, nurse, care for childrenWomen give birth, nurse, care for children

Foraging – women forage, men huntForaging – women forage, men hunt

Horticulture – women grow staple foods, mengrow trade foodsHorticulture – women grow staple foods, mengrow trade foods

Agriculture – women spend more time inchildcare, men grow trade crops and have capitalin marketplace; women more dependentAgriculture – women spend more time inchildcare, men grow trade crops and have capitalin marketplace; women more dependent

Production –Organization of LaborProduction –Organization of Labor

Specialization of LaborSpecialization of Labor

Complex agriculture of storable foods (grain),increased population of specialistsComplex agriculture of storable foods (grain),increased population of specialists

Specialists produce goods, arts, religion, servicesSpecialists produce goods, arts, religion, services

DistributionDistribution

Exchange of goodsExchange of goods

ReciprocityReciprocity

RedistributionRedistribution

Market exchangeMarket exchange

DistributionDistribution

ReciprocityReciprocity

Mutual give and take among people of equalstatusMutual give and take among people of equalstatus

Generalized reciprocityGeneralized reciprocity

Balanced reciprocityBalanced reciprocity

Negative reciprocityNegative reciprocity

DistributionDistribution

ReciprocityReciprocity

Generalized reciprocityGeneralized reciprocity

Distribution of goods with no immediate or specificreturn expectedDistribution of goods with no immediate or specificreturn expected

Successful hunter distributes meat to communitySuccessful hunter distributes meat to community

Gains credit for future return, prestige, satisfactionGains credit for future return, prestige, satisfaction

Balanced reciprocityBalanced reciprocity

Negative reciprocityNegative reciprocity

DistributionDistribution

ReciprocityReciprocity

Generalized reciprocityGeneralized reciprocity

Balanced reciprocityBalanced reciprocity

Clear obligation to return, within time limit, goods ofequal valueClear obligation to return, within time limit, goods ofequal value

Gift giving, trading partnersGift giving, trading partners

Negative reciprocityNegative reciprocity

DistributionDistribution

ReciprocityReciprocity

Generalized reciprocityGeneralized reciprocity

Balanced reciprocityBalanced reciprocity

Negative reciprocityNegative reciprocity

When trade is conducted for material advantage,desire to get something for nothing or to get thebetter end of a bargainWhen trade is conducted for material advantage,desire to get something for nothing or to get thebetter end of a bargain

Gambling, theft, cheating, hagglingGambling, theft, cheating, haggling

Large societies where exchange is betweenstrangersLarge societies where exchange is betweenstrangers

DistributionDistribution

RedistributionRedistribution

Goods are collected from the group then givenout in a new pattern, like taxesGoods are collected from the group then givenout in a new pattern, like taxes

Involves social centerInvolves social center

Potlatch- Pacific Northwest Native Americanredistribution system where chiefs who gaveaway or destroyed goods gained prestigePotlatch- Pacific Northwest Native Americanredistribution system where chiefs who gaveaway or destroyed goods gained prestige

Leveling mechanismsLeveling mechanisms

DistributionDistribution

RedistributionRedistribution

Leveling mechanisms – practices, values orforms of social organization that even out thedistribution of wealthLeveling mechanisms – practices, values orforms of social organization that even out thedistribution of wealth

Force accumulated resources to be used inways that reduce economic differencesForce accumulated resources to be used inways that reduce economic differences

Cargo systems – wealthy communitymembers are elected to offices that requirethem to provide food and drink during festivalsCargo systems – wealthy communitymembers are elected to offices that requirethem to provide food and drink during festivals

DistributionDistribution

Market Exchange – goods and servicesare bought and sold for money, valuedetermined by supply and demandMarket Exchange – goods and servicesare bought and sold for money, valuedetermined by supply and demand

Social and political roles not importantSocial and political roles not important

Main goal is maximizing material gainMain goal is maximizing material gain

Productive resources become capital whenused to increase owner’s financial wealthProductive resources become capital whenused to increase owner’s financial wealth

CapitalismCapitalism

DistributionDistribution

Market ExchangeMarket Exchange

Capitalism - people work for wages, land andcapital goods are privately owned, capital isinvested for individual profitCapitalism - people work for wages, land andcapital goods are privately owned, capital isinvested for individual profit

Capital owned by small portion of populationCapital owned by small portion of population

Most people’s primary resource is their laborMost people’s primary resource is their labor

Value of worker’s contribution to production isalways greater than compensation they receiveValue of worker’s contribution to production isalways greater than compensation they receive