Capitalism and the Economy

Chapter 14

Discussion Outline

• I. What is Capitalism?

• II. Sociological Theory and Capitalism

• III. Recent Economic Trends and Capitalism

• IV. The Reign of the Corporation

What is Capitalism?

An economic system in which property and goods are primarily privately owned, and prices, production, and distribution of goods are determined

by competition in an unfettered marketplace• Brief History• Agricultural revolution• Technological innovations• Large scale factory production

• - The corporation

Social Theory and Capitalism

Positive Aspects of the rise of Capitalism

• Adam Smith• The division of labor produces greater wealth for all and cash gives people

the ability to save

• George Simmel• Wage labor and salaries gives workers more freedom and the ability to not

always “mix business with pleasure”

Social Theory-Marx and Capitalism

• Division of labor leads to Alienation:• A condition in which people are dominated by forces of their own creation that then

confront them as alien powers

• Alienation from:• The product• The process• Others• One’s self

• “Work is external to the worker…Consequently he does not fulfill himself in his work, but denies himself”

Social Theory-Marx and Capitalism

“What the Bourgeoisie therefore produces, above all, are it’s own gravediggers. Its fall and the victory of the proletariat are equally

inevitable” (1848 Communist Manifesto)

• Socialism

• Communism

Social Theory-Weber and the protestant ethic• “The Protestant Ethic and the Spirit of Capitalism”

• The protestant reformation created the necessary social conditions for capitalism by instilling a doctrine of predestination that encouraged monetary fortune as a sign that one would go to heaven

Recent Trends in Capitalism

• A Family Wage?• The necessity of dual income• Less disposable income• More borrowing and more debt• De-industrialization and the rise of the service sector• The social contract and job security• Longer hours and less vacation/free time• Family friendly policies?

The Reign of the Corporation

Positives? Negatives?