Summary
Summary SOC1001F exam notes: Market Society (Nicoli Natrass)
- Institution
- University Of Cape Town (UCT)
summary of the market society section of soc1001f information taken from the textbook as well as my lecture notes
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Market SocietyGeneral 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
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