Sociology Final – CH. 14 Capitalism and the Economy

Feudalism
precapitalist economic system characterized by the presence of lords, vassals, and fiefs
Serfs
bound to land and required to give the lord a portion of their production and then granted protection in return; different from slaves (allowed to own property and could not be sold); relationship formed basic framework for feudalism
Capitalism
economic system in which property and goods are primarily privately owned; investments are determined by private decisions; prices, production, and distribution of goods are determined primarily by competition in an unfettered marketplace; use of money central; developed with agricultural and industrial revolutions in Europe
Evolution of capatilism
influenced by technology, enclosure movement, and more people
Monetization
establishment of legal currency; led to formation of new social institutions and organizations (corporations)
Corporation
way to limit liability of investors, attracting larger number of stockholders
Adam Smith
capitalism’s greatest advocate; individuals self-interest in an environment of others acting similarly will lead to a situation of competition, as long as basic laws and contracts are honored; money is inherently social (it facilitates social relations between humans)
Georg Simmel
saw the development of monetary payment systems as part of a historical evolution, the depersonalization of exchange; payment forms evolved toward giving more and more freedom to the worker
Piecework payment
early days of capitalism; craftsmen produced specific products from start to finish, most payment was in the form of payment per unit; slightly better for worker than in-kind payment because money carries with it a certain amount of freedom; worker remains in control of the payment he receives and has vastly more freedom
Wage labor
wage is not tied to the quality of the raw materials, accidents, or other exigencies in the production process; workers under capitalism are not completely depended on the quality; worker sells labor to the employer (better than piecework payment)
Salary
better than wage labor and piecework; workers paid for sum total of services; civil service salary- related to appropriate standard of living (particular grade level and amount of experience)
Karl Marx
capitalism fundamentally flawed and inevitably doomed; saw alienation capitalist production (product, process, other people, and one self); capitalism self destruct (an abundance of goods)
Socialism
economic system in which most or all the needs of the population are met through nonmarket methods of distribution
Communism
ideology of classless society; means of production are shared
Max Weber
ideas generate social change (capitalism); negative view of capitalism- worried it ate the soul, “iron cage” we cannot escape; believes would not have arisen without Protestant Reformation
Protestant Reformation
created the necessarily social conditions for capitalism by promoting theological insecurity and instilling a doctrine of predestination (notion that only the elect will go to heaven); religion change and accounting advance laid the groundwork for economic development
Family Wage
wage paid to male workers sufficent to support dependent wife and children; Henry Ford; idea of traditional family model; women, unmarried men ineligible for the $5/day
Feminist sociologists and family wage
patriachal bargain; cost of women’s autonomy and freedom, disadvantaging them
Corporations
institutions that structure economic life in every corner of the planet; displaces roles of powerful former ruling institutions; legally an individual; body of people that has authority to act as an individual
Negative side of corporations
little regard, remorse or guilt for harming others; lie all the time; fail to conform to social norms by obeying law; “pathological”; main goal- use its resources and engage in activities designed to increase its profits as long as it stays within the rules (open and free competition); maximize profit and shut out competitors
Credit default swap
private contract between two parties in which one pays the other a “premium” so that if the underlying loan or bond defaults (borrower does not pay pack, goes bankrupt, or otherwise fails) then the entity that bas been paying the premium gets a lump sum; role in haywire credit markets; do not constitute insurance and insurance is required for policy sellers; Commodity Futures Modernization Act exempted credit default swaps from federal oversight
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Sarah
Danielle
Wilson
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