SOSC1850L1/Fall2022

Topic 4: Economy & Class Inequalities

Questions for Thought:

Q: Why does a doctor have a higher income than a nurse?
Q: Why does a pop star earn more than a bus driver?
Q: Why do people like Mark Zuckerberg have so much more wealth and power than a doctor or a
worker?
Q: Why are there an increasing number of street-sleepers in HK?
Q: In many societies, why is there a much higher percentage of certain categories of people (e.g. men,
whites) than other categories (e.g. women, non-whites) employed in professional & managerial
positions?

1. GENERAL CONCEPTS

1.1 Social Inequality

l socially created inequalities in terms of differential access to societal resources

l societal resources: resources which enable people to obtain the socially desirable goods such as
good housing & good education

l 3 major kinds of societal resources: wealth, status and power

Q: Are social inequalities a result of natural inequalities (e.g. natural differences in talents, good
qualities)?

1.2 Social Stratification

In all existing societies, societal resources are unevenly distributed among different people. The
question then, is who get more and who get less. From a sociological point of view, the question is
not simply about whether Mr A or Ms B gets more than the others. Rather, we are concerned if
certain categories or groups of people (capitalists, governing elites, men, white people etc.)
consistently have greater societal resources than the other categories or groups. This is a question
about social stratification.

Social Stratification: a particular form of social inequality, which refers to the presence of social
groups that are ranked one above the other, usually in terms of the amount of power, prestige and
wealth their members possess.

Life Chances: One’s position in a stratification system may enhance or reduce one’s life chances, i.e.
the chances of people obtaining those things defined as desirable and avoiding those things defined
as undesirable in their society.

For sociologists, one of the tasks is to explain how our society is stratified, why it is stratified in the
way it is, and what factors explain its persistent structure.

1.3 Social Mobility

l movement from one stratum to another

l ascribed status (e.g. class of origin, sex, race and kinship relationships) vs. achieved status
(merit)
l open vs. closed system (rate of mobility)

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Example: Caste System in India:

² 4 castes ranked in order and a fifth group of the outcaste (untouchables)
² a hierarchy of prestige based on notions of ritual purity (e.g. Brahmins/ priests ranked top)
² also a hierarchy of power and wealth
² little cross-caste mixing (e.g. rituals; marriage)

l Why study social mobility?

(a) to measure the extent of equal opportunity in society
(b) to see if classes become social entities with a stable membership as well as a stable interest
that leads to distinctive class cultures

l Types of Social Mobility

(a) Intragenerational mobility
(b) Intergenerational mobility

l Why social mobility or why little mobility - individual or structural factors?

1.4 Class Reproduction & Class Subcultures

Social classes may reproduce themselves and maintain their positions in the social structure within
and across generations.

(a) Upper Class

l through direct transfer of private property from one generation to the next
l conversion of economic assets into social and cultural assets - education, personal tie (old boys’
network or old girls’ network);
l inter-family ties - business & marriage

(b) Traditional Working Class Subculture

l Fatalism
l An emphasis on mutual aid and group solidarity (e.g. sense of fraternity in men's clubs, trade
unions), which discourages individual achievement

(c) Middle Class Subculture

l A purposive approach to life - an emphasis on future time gratification, deferred gratification,
and discipline
l An emphasis on individual rather than a collective strategy - individual achievement and
individual effort.

Questions for Further Thought:

(1) Is social stratification functional and desirable for the maintenance of social order, or does it
generate too much social inequality & social conflict?

(2) Do people within the same stratum (e.g. lower class, middle class) necessarily form a strong sense
of group identity (e.g. class consciousness) among themselves and thereby lay the potential basis for
common action such as social protests?

2. CAPITALISM AND CLASS INEQUALITIES

Capitalism:
• founded on the investment of capital in the process of production with the expectation that it
would yield a return in the form of a profit (profit vs. subsistence) – in order to accumulate more
capital

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Basic Characteristics of a Capitalist Economy

(a) Investment of capital (money used to finance production for gain) in production
(b) Monetary value – given to goods, and also to the labor power, raw materials and machinery used
to produce the goods
(c) Capital is accumulated by selling those goods at a price higher than their cost of production

Industrialization (Industrial Capitalism)

Capitalism is being intensified through technological inventions under industrial development:
l Clock time as a new basis of social organization
l Fordism – a system of mass production inspired by the Ford Car Company’s assembly-line
process which produced cars for a mass market

[We will be going over 2 different approaches to capitalism: economic liberalism & Marxism. The
former is dominant in economics whereas Marxism has influenced much sociological thinking.]

2.1 Economic Liberalism - Laissez-faire

Adam Smith’s The Wealth of Nations (1776)

-Its centrepiece is the analysis of the mechanism by which “the economic activities of profit-seeking
individuals result in the greatest economic good for society as a whole” (Brown).

l Freedom of individuals
l Market forces - supply & demand mechanism
l Non-intervention of the state

2.2 The Marxist Approach

Capitalism: a mode of (commodity) production centred upon the relation between the private
ownership of capital and propertyless wage labor

l Social Relations of Production

- OWNERSHIP of the means of production ( ® control over the production process)
- two major classes: capitalist (bourgeoisie) vs. worker (proletariat)

• Labor

Workers - have to sell their labor power to the capitalists in order to earn a wage. They sell their
labor in terms of time: they promise to let an employer use their labor power for a period of time
in return for a fixed amount of money – wage workers. Yet they have no control over the actual
laboring process i.e. not knowing in advance what specific tasks they are required to do.

l Exploitation
-Surplus value - unpaid hours of laboring
-The general law of capitalist accumulation: “The constant tendency of capital is to force the cost
of labor back towards ... zero.” (Marx)

l Alienation
A situation in which the creations of humanity appear to humans as alien objects - as
independent from their creators and invested with the power to control them.

Under Capitalism
-lack of property ownership, hence lack of control over the production process
-alienation from : (i) product, (ii) production process, (iii) themselves, & (iv) their fellows

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Under Industrialization
the mechanization of production and a further specialization of the division of labor

l Ruling-class ideology
- dominant thinking of a society that legitimates ruling-class domination and
exploitation.

Economic Power ® Political Power (to be discussed in later lectures on power)

Insofar as societal resources are mainly in the hands of the capitalists, they have a lot of
influence and power over the government/state.

l False class consciousness

- unawareness of the true nature of exploitation and oppression

l Social Structure

Superstructure (non-economic institutions e.g. education, family, politics, ideology)

Economic base (economic institution: production)

Production: the basis of human society

Economic base: the mode of production

l the forces of production (the technical component)
l the social relations of production (the social component): classes

Forces of production (technical)

-raw materials, machinery, technical knowledge etc. (Those parts of the forces of
production which can be legally owned is called “means of production” e.g. raw materials
& machinery. )

Relations of production (social)

-the social relationships which people enter into in the production process (CLASS
relationships)
-two major classes: (a) those who own the means of production
(b) those who do not own the means of production

Economic Power ® Political Power (to be discussed in later lectures on power)

Insofar as societal resources are mainly in the hands of the capitalists, they have a lot of
influence and power over the government/state.

Stages of Historical Development (Different Modes of Production)

(i) primitive
(ii) ancient ( master vs. slave)
(iii) feudal ( lord vs. serf)
(iv) capitalist ( capitalist vs. wage worker)
(v) communist

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l Social Change

Class Class Class Class Change:

Position ® Polarization ® Consciousness ® Struggle ® Communism
­
(economic crisis)

“The history of all societies up to the present is the history of the class struggle.”

l Contradictions within Capitalism (Crisis)

Competition among capitalists à increasing concentration of capital (further reduction of cost of

production)

2 Effects:
(a) smaller capitalists are unable to compete successfully; joining the working class;
(b) reduction of wage or an increasing rate of unemployment among the workers

Spiralling effect: wage reduction or unemployment causes a decrease in consumption among the
working class, which pushes the capitalists to cut costs still further so as to retain profit levels.

Class Consciousness
-a full awareness of the true situation of class exploitation

2.2.1 Strengths of Marxism

(a) analyzing structural contradictions in capitalism - class exploitation, & economic crises
(b) envisaging concentration of capital in society
(c) envisaging globalization of capital & production
-e.g. transnational corporations (e.g. Sony, McDonald, Coca Cola), emergence of a
transnational capitalist class, relocation of factories

2.2.2 Criticisms

(a) overlooking non-class based inequalities & conflicts (e.g. gender, ethnicity, political power)

(b) overlooking intra-class inequalities & conflicts (different positions/ groups within the same
class)

(c) under-conceptualization of the middle class

(The existence of the middle class does not fit well into a Marxist framework, given its
political agenda about revolution. Even in a neo-Marxist framework, the power position of
the middle class still remains unclear and ambiguous.)

l in terms of ownership of means of production --- not belonging to the capitalist

l in terms of work autonomy --- quite different from the working class

(d) prediction not actualized - why not?

-Marx: false consciousness - unawareness of one’s real interests
-Weber: class fragmentation (next section)