Summary SOC1001F exam notes: Market Society (Nicoli Natrass)

Market Society
General Idea
 Ordering of economic relationships
o Through the price mechanism
 Came about after the industrial revolution
o Formed the basis for Capitalism


Classic Economic Theory
 Prices adjust until supply meets demand
 Basic Supply and demand

Supply & Demand
 Bargaining between sellers and buyers
o Sellers= Supply
o Buyers= Demand
 High prices
o More supply needed
o Demand exceeds supply
 Increasing prices
o Cause
 Excess demand
o Effect
 Lessen the demand
 Prompt an increase in supply
 Low prices
o More demand needed
o Supply exceeds demand
 Lowering prices
o Cause
 Excess supply
o Effect
 Increase demand

,Supply & Demand in labour market
 Workers
o Try protect their wage
 Employers
o Try restrain wages
 Excess of labour
o More competition for employment between workers
o Less employee power
o Worse wages
 High demand for labour
o Competition for workers between employers
o More employee power
o Better wages

,Industrialization
Background
 Started in England
o Around 1750
 Before
o Position was clear
 Not much room to improve
 Usually inherited
o Transparent flow of resources
 Reinforced by Kings or military

Technological Change
 Made the Industrial revolution possible
 Shipbuilding and steam power the most revolutionary
 Shipbuilding
o Allowed merchant ships
 Steam engine
o Provided power

Characteristics
 Sophisticated machinery
 Disappearance of many occupations
 Industrial production by bureaucratic enterprises
 Urban migration
o Opted to rather work in factories
o Pushed off lands by landlords
 Division of labour
o Specialisation at factory-level
 Everyone did one task repetitively
 Get Fokken good at that task
o Allowed for rising living standards.
o No co-operating or organization needed
 Invisible hand
 Responding to ‘price signals’
 Rationality
o Looking at things completely logically
o Input and output
 Government control
o Most prevalent in democracies
o Aims
 Minimize exploitation
 Protect society from the market
 Promote growth

, Advantages vs. Disadvantages of industrialization
Advantages
 Increases growth and income
Disadvantages
 Greater inequality
o Capitalists get rich
o Workers get poor
 ‘False consciousness’
o Serves the elite at the expense of the poor
 Most vulnerable to market forces
o Especially in economic crisis
 Human Question
o Taking away craftsmanship

Lewis Model
Surplus labour in agriculture drawn into industry
Wage just above subsistence level
Keep expanding without creating a demand for labour
Just ship more people in from the country
Doesn’t effect food production
When surplus labour runs out
Now competition between employers for employees
Wage rises
Reduces profit
Reduces investment
Growth slows
By this time
Living standards have risen
Inequality has fallen
Rural and urban