Societies, facts and challenges
Preamble
Positive vs normative (David Hume)
Positive or descriptive analysis
Factual questions: how is the reality? Describing the world as it is.
Normative or prescriptive analysis
Value judgements: how should things be? Will the society be better off?
Correlation vs causation
Correlation
Statistical association between variables. +/-
Causation
Change in variable x causes change in variable y. One variable causes the
other
!! Correlation does not imply causation
e.g. you observe a correlation and interpret it as a causation. Don’t jump to a
causal interpretation!
The direction of causality is not always clear.
Talking about policy
To formulate policy recommendations and policy advice…
You need to understand the society (positive/descriptive analysis)
Understand the complex causal mechanisms between the variables
You need to take a normative position and argue about what society you
want.
You may disagree with someone else.
This should be done with care!
Lecture 1 – setting the scene: a conceptual framework
Three basic institutions
Societies
A society is organised in several layers. Overlooked: local and supranational level
– a lot of the Belgian discussions are about the regional and national level.
Multilevel structure:
Local society/community (Antwerp)
Regional society (Flanders)
National society (Belgium)
Supranational society (European Union)
Global society (World)
Members
1
,The individuals in the society are its members. These members have duties and
also retrieve rights from their membership.
Citizenship in 3 parts (Marshall; 1950)
Civil rights – 18th century
Individual freedom (freedom of speech ,religion,..)
Political rights – 19th century
Ability to vote, having the right to participate in the exercise of political
power
Social rights – 20th century
Right as a human to live a civilised life according to the standards of the
society
(slide 25) EU member countries; 2017
20 social rights
Social protection + inclusion
Equal opportunities and access to the labour
market
Fair working conditions
Basic institutions
A policy is good for a society if it’s good for its members.
Members interact and live, work,… together. Individuals form basic (social)
institutions.
There are 3 basic institutions which are the main actors of this course.
Family
Firm
Government
We will be looking at: which of these 3 is doing what in the society?
Macro historian perspective
When did the institutions emerge? What roles did they take in history?
An important evolution in the development of the human species is that our
brains have grown larger (and our jaw and teeth have become smaller)
1. The Family
Why are humans forming families?
When a baby is born, it is completely helpless. This is the main reason why we
have to care for them. Caring tasks are inherent to our lives. This is a
consequence of our heads growing larger. To help each other, to collaborate, to
pool their resources,…
2
,Typically in a family, there is no such thing as a constitution, there are no formal
rules. Families are organized in an informal way.
We can distinguish 3 revolutions in which the course of history has
fundamentally changed.
1) Cognitive revolution
Moment when the homo sapiens develops a language (70 000 y/a)
Communication creates so many possibilities.
o Collaboration
o Imagined reality (you can talk about anything); philosophical
questions
o Myths, legends, stories,..
o Development of cultures and religions
o Exchange and trade
The market
A place on which people trade and exchange. Most markets rely on sellers
offering their goods/services to buyers in exchange for money.
! Exchange is essential, money is not. Market in itself is not a basic
institution. !
Pre-historic care
Develops around the same time. People start to care for each other
Case of Romito 2 (earliest case of dwarfism)
2) Agricultural revolution
Moment when the homo sapiens develops farming and agriculture (10
000 y/a)
o Larger societies can be sustained because we have more food
o Members can do other things besides hunting + gathering food
o Social hierarchies emerge inequality
Homo sapiens develops a writing system.
Because the society becomes larger, these societies need to become
organised.
2. The Government
Larger societies require a formal organisation. Some members are given the
power to rule over others. These members form the government/state.
These primitive governments have 2 functions
Create and enforce laws – punishments
Collect and spend taxes – protecting and organising the society
First sort of law: Babylonian legal text “the Codex of Hammurabi” (1776 b.C.)
Jump in time
Economic growth
GDP (Gross Domestic Product) = measures the market value of all final
goods and services produced and sold in a specific time period within a
certain country.
3
, GDP per capita = divide the total GDP by the number of inhabitants in
the country
3) Industrial revolution
Homo sapiens invents the steam engine. (+/- 1800)
o Technological and financial revolution
o Increased productivity
o Urbanization: migration to large cities (because firms need
employees)
o Society is deeply transformed
3. The Firm
Economies of scale in production profit-maximising firms
Firms need capital + labour (production means) to produce goods.
The social relation between employer & employee changes
Labour conditions get worse
Uncertain living conditions
More inequality and increased poverty
Marxism the commodification of labour
Commodification = transformation of things (goods, services and labour) into
commodities that are sold on the market.
A new way of thinking about ‘work’. People are not just selling products, but
hours of their labour. Individuals need to do this to stay out of poverty, which
means they are dependent on the labour market.
3 basic institutions and the market
All 3 players are active on the market.
The government regulates exchange and enforces contracts
Families own production means (labour) and want to consume goods
Firms need production means (labour + capital) to produce these goods. ²
Different markets:
Market for goods
Market for labour
Market for capital
Free self-regulating market = market without regulation by the government
Thought experiment: what would our society look like if there was no
government? What is the government actually doing?
Very few examples of these markets.
Overview
Formal Informal
Firms + Families
governments
4
Preamble
Positive vs normative (David Hume)
Positive or descriptive analysis
Factual questions: how is the reality? Describing the world as it is.
Normative or prescriptive analysis
Value judgements: how should things be? Will the society be better off?
Correlation vs causation
Correlation
Statistical association between variables. +/-
Causation
Change in variable x causes change in variable y. One variable causes the
other
!! Correlation does not imply causation
e.g. you observe a correlation and interpret it as a causation. Don’t jump to a
causal interpretation!
The direction of causality is not always clear.
Talking about policy
To formulate policy recommendations and policy advice…
You need to understand the society (positive/descriptive analysis)
Understand the complex causal mechanisms between the variables
You need to take a normative position and argue about what society you
want.
You may disagree with someone else.
This should be done with care!
Lecture 1 – setting the scene: a conceptual framework
Three basic institutions
Societies
A society is organised in several layers. Overlooked: local and supranational level
– a lot of the Belgian discussions are about the regional and national level.
Multilevel structure:
Local society/community (Antwerp)
Regional society (Flanders)
National society (Belgium)
Supranational society (European Union)
Global society (World)
Members
1
,The individuals in the society are its members. These members have duties and
also retrieve rights from their membership.
Citizenship in 3 parts (Marshall; 1950)
Civil rights – 18th century
Individual freedom (freedom of speech ,religion,..)
Political rights – 19th century
Ability to vote, having the right to participate in the exercise of political
power
Social rights – 20th century
Right as a human to live a civilised life according to the standards of the
society
(slide 25) EU member countries; 2017
20 social rights
Social protection + inclusion
Equal opportunities and access to the labour
market
Fair working conditions
Basic institutions
A policy is good for a society if it’s good for its members.
Members interact and live, work,… together. Individuals form basic (social)
institutions.
There are 3 basic institutions which are the main actors of this course.
Family
Firm
Government
We will be looking at: which of these 3 is doing what in the society?
Macro historian perspective
When did the institutions emerge? What roles did they take in history?
An important evolution in the development of the human species is that our
brains have grown larger (and our jaw and teeth have become smaller)
1. The Family
Why are humans forming families?
When a baby is born, it is completely helpless. This is the main reason why we
have to care for them. Caring tasks are inherent to our lives. This is a
consequence of our heads growing larger. To help each other, to collaborate, to
pool their resources,…
2
,Typically in a family, there is no such thing as a constitution, there are no formal
rules. Families are organized in an informal way.
We can distinguish 3 revolutions in which the course of history has
fundamentally changed.
1) Cognitive revolution
Moment when the homo sapiens develops a language (70 000 y/a)
Communication creates so many possibilities.
o Collaboration
o Imagined reality (you can talk about anything); philosophical
questions
o Myths, legends, stories,..
o Development of cultures and religions
o Exchange and trade
The market
A place on which people trade and exchange. Most markets rely on sellers
offering their goods/services to buyers in exchange for money.
! Exchange is essential, money is not. Market in itself is not a basic
institution. !
Pre-historic care
Develops around the same time. People start to care for each other
Case of Romito 2 (earliest case of dwarfism)
2) Agricultural revolution
Moment when the homo sapiens develops farming and agriculture (10
000 y/a)
o Larger societies can be sustained because we have more food
o Members can do other things besides hunting + gathering food
o Social hierarchies emerge inequality
Homo sapiens develops a writing system.
Because the society becomes larger, these societies need to become
organised.
2. The Government
Larger societies require a formal organisation. Some members are given the
power to rule over others. These members form the government/state.
These primitive governments have 2 functions
Create and enforce laws – punishments
Collect and spend taxes – protecting and organising the society
First sort of law: Babylonian legal text “the Codex of Hammurabi” (1776 b.C.)
Jump in time
Economic growth
GDP (Gross Domestic Product) = measures the market value of all final
goods and services produced and sold in a specific time period within a
certain country.
3
, GDP per capita = divide the total GDP by the number of inhabitants in
the country
3) Industrial revolution
Homo sapiens invents the steam engine. (+/- 1800)
o Technological and financial revolution
o Increased productivity
o Urbanization: migration to large cities (because firms need
employees)
o Society is deeply transformed
3. The Firm
Economies of scale in production profit-maximising firms
Firms need capital + labour (production means) to produce goods.
The social relation between employer & employee changes
Labour conditions get worse
Uncertain living conditions
More inequality and increased poverty
Marxism the commodification of labour
Commodification = transformation of things (goods, services and labour) into
commodities that are sold on the market.
A new way of thinking about ‘work’. People are not just selling products, but
hours of their labour. Individuals need to do this to stay out of poverty, which
means they are dependent on the labour market.
3 basic institutions and the market
All 3 players are active on the market.
The government regulates exchange and enforces contracts
Families own production means (labour) and want to consume goods
Firms need production means (labour + capital) to produce these goods. ²
Different markets:
Market for goods
Market for labour
Market for capital
Free self-regulating market = market without regulation by the government
Thought experiment: what would our society look like if there was no
government? What is the government actually doing?
Very few examples of these markets.
Overview
Formal Informal
Firms + Families
governments
4
