FHHM1124

SOCIALIZATION AS
A PROCESS

TOPIC 9 ECONOMY AND

WORK
 Main Reference 1:
Henslin, J. M. (2012). Sociology: A
down-to-earth approach (11th This topic is
ed.). Upper Saddle River, NJ:
Pearson.
corresponding to:

• Chapter 18 [Part 4]
in Schaefer’s text;
and

• Chapter 14 [Part 4]
in Henslin’s text.

Main Reference 2:
Schaefer, R. T. (2012). Sociology
(13th ed.). NY: McGraw-Hill.
 TOPIC 9 ECONOMY AND WORK

9.1 WHAT ARE ECONOMY AND

ECONOMIC SYSTEMS?
9.2 WORK AND LEISURE
9.3 SUMMARY
 TOPIC 9 ECONOMY AND WORK

9.1 WHAT ARE ECONOMY AND

ECONOMIC SYSTEMS?
9.1.1 DEFINING ECONOMY AND
ECONOMIC SYSTEMS
9.1.2 WORLD ECONOMIC SYSTEMS
 9.1 WHAT ARE ECONOMY AND
ECONOMIC SYSTEMS?
9.1.1 DEFINING ECONOMY AND ECONOMIC SYSTEMS

ECONOMY
A system of distribution of goods and
services
ECONOMIC SYSTEMS
The social institution through which goods
and services are produced, distributed,
and consumed
 9.1 WHAT ARE ECONOMY AND
ECONOMIC SYSTEMS?
9.1.2 WORLD ECONOMIC SYSTEMS

• As the Industrial Revolution proceeded, a new form

of social structure emerged: the Industrial Society

INDUSTRIAL SOCIETY
A society that depends on mechanization
to produce its goods and services
• Machines powered by
fuels, instead of by
humans and animals,
brought surplus unlike
anything in history
• As the surpluses grew
even greater, the
emphasis slowly
changed from
producing goods to
consuming them
CONSPICUOUS
CONSUMPTION
Thorstein Veblen’s term for a
change from the Protestant
ethic to an eagerness to
show off wealth by the
consumption of goods
• Two basic types of economic system distinguish
contemporary industrial societies: capitalism
and socialism
• However, they serve as ideal types of economic
system, as no nation precisely fits either model
• Instead, the economy of each individual state
represents a mixture of capitalism and
socialism, although one type or the other is
generally more useful in describing a society’s
economic structure
 CAPITALISM

SOCIALISM

THE CONVERGENCE OF
CAPITALISM AND SOCIALISM
 CAPITALISM

CAPITALISM
An economic system in which the means of
production are held largely in private
hands and the main incentive for
economic activity is the accumulation of
profits
 TYPES OF CAPITALISM

WELFARE /
LAISSEZ-FAIRE
STATE
CAPITALISM
CAPITALISM
LAISSEZ-FAIRE CAPITALISM

• In preindustrial societies, land functioned as the

source of virtually all wealth
• The Industrial Revolution changed all that as it
required that certain individuals and institutions be
willing to take substantial risks in order to finance new
inventions, machinery, and business enterprises
• Eventually, bankers, industrialists, and other
holders of large sums of money replaced
landowners as the most powerful economic force
during Industrial Revolution
• These people invested their funds in the hope of
realizing even greater profits, and thereby became
owners of property and business firms
• Immediately following the Industrial Revolution, the
prevailing form of capitalism was what is termed
laissez-faire capitalism

LAISSEZ-FAIRE CAPITALISM
Unrestrained manufacture and trade
(literally means “let them do” or “hands off”
capitalism)
• Under the principle of laissez-faire, as expounded
and endorsed by British economist Adam Smith
(1723–1790), people could compete freely, with
minimal government intervention in the economy
• Business retained
the right to
regulate itself
and operated
essentially without
fear of government
interference
WELFARE / STATE CAPITALISM

• Two centuries later, private ownership and

maximization of profits still remain the MOST significant
characteristics of capitalist economic systems
• However, in contrast to the era of laissez-faire,
capitalism today features government regulation of
economic relations
• Without restrictions, business firms can mislead
consumers, endanger workers’ safety, and even
defraud the companies’ investors—all in the
pursuit of greater profits
WELFARE / STATE CAPITALISM
An economic system in which individuals
own the means of production but the state
regulates many economic activities for
the welfare of the population

MARKET RESTRAINTS
Laws and regulations that limit the capacity
to manufacture and sell products
• The government of a capitalist country often:
 monitors prices,
 sets safety and environmental standards
for industries,
 protects the rights of consumers; and
 regulates collective bargaining between
labor unions and management
• The
Malaysian
government
controls the
ceiling price
for many
necessities
to ensure the
welfare of
people (the
prices are
updated as
of 1st March
2013)
• Capitalism tolerates monopolistic practices

MONOPOLY
A single business firm controls the market

• Domination of an industry allows the firm to

effectively control a commodity by dictating
pricing, quality standards, and availability
• Buyers have little choice but to yield to the firm’s
decisions as there is no other place to purchase
the product or service
• However, monopolistic practices violate the ideal
of free competition cherished by Adam Smith and
other supporters of laissez-faire capitalism

Exercise 9.1
1. Identify at least THREE (3) industry which
practices monopoly.
2. What are the shortcomings of monopolistic
practices?
 SOCIALISM

SOCIALISM
An economic system in which the means of
production and distribution in a society
are collectively owned rather than
privately owned
 TYPES OF
SOCIALISM

DEMOCRATIC /
IDEAL
COMMUNISM WELFARE
SOCIALISM
SOCIALISM
 IDEAL SOCIALISM

• Socialist theory was refined in the writings of Karl

Marx and Friedrich Engels who were disturbed by the
exploitation of the working class that emerged
during the Industrial Revolution
• In their view, the owners of
an industry profit from the
labor of workers primarily
because they pay workers
LESS than the value of the
goods produced
• A socialist economic system:
 attempts to eliminate economic exploitation
and competition
 attempts to meet people’s needs rather than to
maximize profits
 rejects the laissez-faire philosophy that free
competition benefits the general public
 believes that the central government, acting as
the representative of the people, should make
basic economic decisions
 believes that government ownership of all
major industries is beneficial and necessary
• Socialist nations differ from
capitalist nations in their
commitment to social
service programs

• In theory, the wealth of the

people as a collectivity is
used to provide health care,
housing, education, and
other key services to each
individual and family
 COMMUNISM

• Marx believed that socialist societies would eventually

“wither away” and evolve into communist societies

COMMUNISM
An economic system under which ALL
property is communally owned and NO
social distinctions are made on the
basis of people’s ability to produce
• All nations known as communist in the 20th
century, such as the Soviet Union, the People’s
Republic of China, Vietnam, Cuba, and nations in
Eastern Europe, actually fell far short of the ideal
type of communism
• As of 2010, China, Cuba, Laos, North Korea, and
Vietnam remained socialist societies ruled by
Communist parties
• Yet even in those countries, capitalism had
begun to make inroads
DEMOCRATIC / WELFARE SOCIALISM

• Dissatisfied with the greed and exploitation of

capitalism and the lack of freedom and
individuality of socialism, Sweden and Denmark
developed democratic socialism

DEMOCRATIC / WELFARE SOCIALISM

BOTH the state and individuals produce
and distribute goods and services
• The government owns
and runs the steel, mining,
forestry, and energy
concerns, as well as the
country’s telephones,
television stations, and
airlines
• Remaining in private
hands are the retail stores,
farms, factories, and most
service industries
 ECONOMIC SYSTEMS

SOCIALISM CAPITALISM

COMMUNISM DEMOCRATIC/ WELFARE/ LAISSEZ-

WELFARE STATE FAIRE
SOCIALISM CAPITALISM CAPITALISM

IDEAL
SOCIALISM
Exercise 9.2
1. Identify the
economic
system
practiced by
Malaysia.
Justify your
answer.
 THE CONVERGENCE OF
CAPITALISM AND SOCIALISM

CONVERGENCE THEORY
The view that as capitalist and socialist
economic systems each adopt features
of the other, a hybrid (or mixed)
economic system will emerge
• Fundamental changes in socialist countries give
evidence for this coming hybrid, or mixed,
economy:
 China joined the change, but kept a communist
government
 In its converged form of "capunism“,
capitalists joined the Communist party
 The convergence is so great that when the
Western governments instituted stimulus plans
to counter the economic crisis, China joined in
with a huge stimulus plan of its own
• Changes in capitalism also support this theory
• The United States has adopted many socialist
practices, when the government collects money
from some individuals to pay for benefits given
to others:
 Unemployment compensation (taxes paid by
workers are distributed to those who no longer
produce a profit)
 Subsidized housing, food, and medical care paid
for by the many are given to the poor and elderly
with no motive of profit
 TOPIC 9 ECONOMY AND WORK

9.2 WORK AND LEISURE

9.2.1 DEFINING WORK
9.2.2 DEFINING LEISURE
9.2 WORK AND LEISURE
9.2.1 DEFINING WORK

• The Industrial Revolution

brought about changes in
the social organization
of the workplace
• People left their
homesteads and began
working in central
locations such as
factories
• All the pioneers of sociological thought were
concerned about the negative impact on workers of
the changes brought about by the Industrial
Revolution

VIEWS ON WORKS IN
INDUSTRIAL SOCIETIES

DURKHEIM’S MARX’S OTHER

VIEW VIEW VIEWS
 DURKHEIM’S VIEW

• Durkheim argued that as labor becomes more and

more differentiated, individuals experience
anomie, or loss of direction
• Workers can’t feel as much fulfillment from
performing one of specialized task in a factory as
they did when they were totally responsible for
creating a product
• Clearly, the impersonality of bureaucratic
organizations can produce a cold and uncaring
workplace
Exercise 9.3
1. Identify THREE (3)
occupations other
than factories
workers, that
workers tend to feel
anomie in their works.
Justify your answers.
 MARX’S VIEW

• Karl Marx believed that the emphasis on the

specialization of tasks, he believed, contributed
to a growing sense of alienation among
industrial workers

ALIENATION
A condition of estrangement or
dissociation from the surrounding society
• An even deeper cause of alienation was the
powerlessness of workers in a capitalist economic
system
• Workers had NO control over:
 their occupational tasks,
 the product of their labor; or
 the distribution of the profit
• Moreover, they are constantly producing property
that was owned by others (the members of
capitalist class)
• The isolation of laborers have increased due to:
 the growth of the size of businesses,
 the emergence of huge franchise; and
 the dominance of multinational corporations

BURNOUT
The stress experienced by a wide range of
workers, including professionals, self-
employed persons, and even unpaid
volunteers
 OTHER VIEWS

• George Ritzer (1977, 2000) argued that manual

workers are so deeply alienated that they come to
expect little from their jobs
• Their satisfaction comes from nonwork tasks, and
any job-related gratification results from receiving
wages
• Donald Roy’s research (1959) concluded that one of
the key source of job satisfaction lies in the informal
interaction shared by members of a work group
 9.2 WORK AND LEISURE
9.2.2 DEFINING LEISURE

LEISURE
Time NOT taken up by work or necessary
activities such as eating and sleeping

• In hunting and gathering societies provide enormous

amounts of leisure as it did not take long for people to
hunt and gather what they needed for the day
• Agricultural economies also allowed much leisure,
for work peaked in with the spring planting, let up in
the summer, and then peaked again with the fall
harvest while during the winter, work again receded
• In earlier industrial societies, bosses and machines
began to dictate when work was to be done, rather
by seasons or climates
• To workers of that period, this seemed like slavery
• Today, in contrast, work patterns that corporations
and bosses impose on us have become part of the
taken-for-granted cultural rhythms that coordinate
our lives
• It is not the activity itself
that makes something
leisure, but the purpose
for which it is done
• If you do something for
pleasure, it is leisure
• Compared with workers
during early
industrialization, today's
workers have FAR MORE
leisure
Exercise 9.4
1. Identify THREE (3)
labors or tasks and
discuss whether they
are work or leisure.
 SUMMARY

TOPIC 9 ECONOMY AND

WORK
The economic system is the social institution
through which goods and services are
produced, distributed, and consumed; In the
industrial society, conspicuous consumption
is common as people are eager to show off
their wealth by the consumption of goods

CORE CONCEPT 1
Capitalism is an economic system in which
the means of production are held largely in
private hands and the main incentive for
economic activity is the accumulation of
profits while socialism is an economic
system in which the means of production
and distribution in a society are collectively
owned rather than privately owned

CORE CONCEPT 2
The world’s economic systems fall along a
continuum whose end-points are capitalism
and socialism in most pure forms; However,
according to the Convergence Theory, when
capitalist and socialist economic systems
each adopt features of the other, a hybrid (or
mixed) economic system will emerge

CORE CONCEPT 3
Durkheim argued that as labor becomes
more and more differentiated, individuals
experience anomie, or loss of direction; On
the other hand, Karl Marx believed that the
emphasis on the specialization of tasks
contributed to a growing sense of alienation
among industrial workers

CORE CONCEPT 4
Leisure is time not taken up by work or
necessary activities such as eating and
sleeping; It is not the activity itself that
makes something leisure, but the purpose
for which it is done

CORE CONCEPT 5