UNDERSTANDING CULTURE, The Political Economy of Inequalities

SOCIETY AND POLITICS

LESSON 5: ECONOMY, SOCIETY,
AND CULTURAL CHANGE
The Economy as Foundation of
Social Life
The distribution of wealth in society will
always be determined by the economic
structure of society. One of the biggest
influences of the economy on society
is determining the status and class of
persons inside the society.

For Marx, class refers to interactions

The Importance of Economic Structure
among people who share the same
ownership of the means of production.

CLASS refers to the relationship between

Karl Marx
persons who have similar class interests
(1818 – 1883)
in terms of the means of production.

Father of scientific socialism,

famously remarked in his A Preface to a
Critique of Political Economy the most Types of Class (According to Marx):
controversial assertion in sociology:
CAPITALIST: (bourgeoisie or middle
He asserted that the various types of class) Capitalism is the most prominent
social relations formed by the economic economic system in our present global
output of human beings in a specific economy. Its most distinguishing feature is
society determine society’s entire that the majority of its means of
existence, beliefs, and activities. production and property are privately
owned by individuals and businesses.
Karl Marx's argument is also a fact in
another way: the cultural lifestyle of the
impoverished will be very different from
that of the middle classes and the
super-rich. Whereas the rich and middle
classes can afford to buy original
products, the lower classes will be lured
more to popular culture and its affordable
products.
PROLETARIAT (working class): is a
phrase that refers to low-status laborers,
particularly industrial workers. Those
who own nothing except to sell their
labor power in the market (from the
French proletariat, from Latin
proletarius— a man whose only wealth
is in his offspring).
LUMPENPROLETARIAT (upper class
or social scum):
Marx coined the term lumpenproletariat
in reaction to Max Stirner's description
of the lower social orders as "Lumpe", a
sociological and moral term.
In the Manifesto, he and Engels
cautioned that even when "forced into
the movement by a proletariat
revolution," this "passive rotting stuff
of the lowest levels of the old
society" is "more prone to sell out to
reactionary plots".
It was no wonder, then, that during the
upheaval of 1848-49, the unscrupulous
and thuggish Louis Bonaparte, "Leader
of the Lumpenproletariat", was able to
rally this "scum, offal, and refuse of all
classes" behind him.
System of Stratification as Source of
Inequalities
Some sociologists extend the definition
of the class to the prestige attached to
one's social position. Along the
Weberian tradition, they use the term
stratification.
When regularly recognized social
differences (of wealth, color, religion,
ethnicity or gender, for example)
become ranked in some hierarchical
manner, sociologists talk about strata
(Bruce and Yearly 2006, p. 290).
Max Weber defined
class a category of
individuals who (1)
"have in common a
specific causal
component of their
life chances in so far
as (2) this
component is represented exclusively
by economic interests in the possession
of goods and opportunities for income,
and (3) it is represented under the
conditions of the commodity or labor
market."
Caste
Caste System as a system of social
stratification differs from class in its
rigidity and the basis of legitimation. It is
also called a closed system in contrast
with the class system.
 Under the class system, individuals are
positioned according to their access to
the means of production and
contribution to productive labor. In most
class systems, education has become
the accepted means to advance one's
social mobility.

Social mobility is when people are

allowed and are capable of moving from
one stratum or class to another class.

Status and Class

In the caste system, the positions of
people are already determined at the
Status groups are normally
moment they were born.
communities, according to Max Weber.
Status refers to life chances that are
In his famous essay
determined by social honor or prestige.
on "The Future
Weber framed class in terms of life
Results of British
chances in the market where one can
Rule in India", Karl
increase one’s life chances or economic
Marx characterized
opportunities by having more prestige or
the Indian castes as
social honor.
"the most decisive
impediment to India's
progress and power."
Marx argued that the caste system of
Pierre Bourdieu
India was based on the hereditary
(1930-2002)
division of labor which was linked to the
economy of the Indian community.

Class System
In contemporary sociology, Pierre
Bourdieu, a French sociologist, dealt
extensively with class inequalities. He
argued that capital, in its classic Marxist
usage, does not refer only to economic
assets. It also includes cultural,
symbolic, and social capital.
Cultural capital refers to the forms of
knowledge, educational credentials, and
artistic taste that a person acquires from
a family background, which gives them
a higher status in society.
Social capital refers to resources
based on group membership,
relationships, and networks of influence
and support.
Bourdieu (1984) in his book Distinction,
refers to Symbolic capital as “the
acquisition of a reputation for
competence and an image of
respectability and honourability…”
(p.291).
These forms of capital constitute the
resources of a person’s habitus, which
refers to the values, perceptions, and
conception reflected in a way of being of
an individual.
Economy and Globalization
Globalization through free trade
agreement
Anthony Giddens, a
sociologist, explained
the multiplication of
risks in a new
globalized economy.
In his statement, he
said that in the new
global electronic company, corporations,
investors, banks, etc. can now easily do
transactions such as transferring money
with just one click.
International Trade Organization (ITO)
- It is a trade opening organization. It
serves as a platform for nations to
negotiate trade treaties. It is a location
where they may settle commercial
problems.
European Union (EU) -
The Maastricht Treaty established the
EU, which became operational on
November 1, 1993. It is a global
organization made up of 27 European
nations that governs shared economic,
social, and security issues
North American Free Trade
Agreement (NAFTA) -
● The North American Free Trade
Agreement (NAFTA) was
established in 1994 to promote
commerce among the United
States, México, and Canada.
●
Tariffs on imports and exports
between the three participating
nations were decreased or
removed under NAFTA, resulting
in a massive free-trade zone.
Asia-Pacific Economic Cooperation
(APEC) -
● The Asia-Pacific Economic
Cooperation (APEC) is a regional
economic forum founded in
1989 to capitalize on the
Asia-Pacific region's growing
interdependence.

● The main goal of 21 members of
APEC is to increase regional
prosperity by fostering
balanced, inclusive,
sustainable, creative, and
secure growth and by
speeding regional economic
integration.
Association of Southeast Asian
Nations (ASEAN) -
● ASEAN, or the Association of
Southeast Asian Nations, was
founded on August 8, 1967, in
Bangkok, Thailand.
● By providing legal status and an
institutional structure for ASEAN,
the ASEAN Charter serves as a
solid basis for building the
ASEAN Community. It also
codifies ASEAN norms, rules,
and values; establishes specific
ASEAN aims; and discusses
responsibility and compliance.
● These objectives and goals
concerned economic, social,
cultural, technical, educational,
and other fields of cooperation,
as well as the promotion of
regional peace and stability
through ongoing respect for
justice and the rule of law, as well
as adherence to the principles of
the United Nations Charter.
Common Market of the South
(MERCOSUR) -
● The "Common Market of the
South" is an economic and political
agreement between Argentina,
Brazil, Paraguay (previously
suspended), and Uruguay to
promote free movement of
products, services, and people
among member countries.
Mercosur's principal goal has been
to remove barriers to regional
commerce, including as high tariffs
and economic disparities.
International Monetary Fund (IMF) -
● The International Monetary Fund
(IMF) strives for long-term growth
and prosperity for all 190 of its
member nations. It accomplishes
this through promoting economic
policies that encourage financial
stability and monetary cooperation,
both of which are necessary for
increasing productivity, job
creation, and economic well-being.
● The IMF has three important
missions: to promote international
monetary cooperation, to promote
trade and economic progress, and
to discourage actions that might
impair prosperity.
World Trade Organization (WTO) -
● It is a trade opening organization. It
serves as a platform for nations to
negotiate trade treaties. It is a
location where they may settle
 commercial problems. It has a set
of trading rules in place.
● It operates a worldwide trade rules
system, serves as a venue for
negotiating trade agreements,
mediates trade disputes among its
members, and helps developing
nations.
● Its primary objective is to maintain
commerce flowing as smoothly,
reliably, and freely as possible.
When Corporations Rule the World
Transnational corporations (TNCs)
influence national government policies
through their ability to invest and
reinvest capital, relocate factories, and
influence other similar companies in
either investing or boycotting a country.
TNC does not identify itself with one
national home. TNCs spread out their
operations in many countries through
outsourcing and offshore investment
while multinational corporations
(MNCs) are national companies with
foreign subsidiaries.
Transnational Corporations (TNCs)
Multinational Corporations (MNCs)
Example of a TNC: Nestle that employs
senior executives from many countries
while enforcing decisions from a global
perspective rather than from one
centralized headquarters.
The transnationality of TNCs can be
considered as roughly equivalent to
globalization.
“Transnationality is a function of the
extent to which a firm’s activities are
located abroad. It refers to the
geographic spread of firms and implies
the existence of a home country and
one or more host countries” as United
Nations Conference on Trade and
Development (UNCTAD) defines it.
Many economists argue that TNCs can
be beneficial to developing countries
because of technology transfer and
diffusion of knowledge and information.
TNCs bring much needed capital to
developing countries through direct
foreign investments. These investments,
in turn, create jobs and employment for
the host countries.
John Medeley, a strong critic of TNCs, solved through technological
points out the difference between the advancement or "technological fix."
poor of developing countries and the
TNCs: “The starkest contrast between Today, however, many economists and
the poor and the TNCs is that the poor environmentalists, especially Barry
have little power. And while the Commoner and Herman Daly challenge
corporations have gained from the the "productivist" paradigm.
changes in the global economy, the poor
Herman Daly (2004), a
have lost, often from those same
proponent of
changes” He further adds,
ecological
economics, while
TNCs have successfully persuaded
acknowledging the peril
people in developing countries to adopt
of growth on the
products such as Coca-Cola, Seven-Up,
economy, also
Pepsi, Kentucky Fried Chicken, beef suggests redistribution
burgers, cigarettes and so on as part of of wealth.
their way of life. By consuming
inappropriate products, the poor have The extension of consumption and the
less money to buy basic necessities. increased demand leading to more
efficient production methods and the
Economic Globalization and advances in technology and scientific
Environment knowledge contribute to strain on the
environment.
Classical theories of development
equated development solely with Consumerism worldwide led to the vast
economic growth or the rise in Gross extension of trade and consumption of
National Product (GNP). Mark Hanson resources especially by the rich countries
(2008) rightly points out, "In this age of (Kütting 2004).
globalization, a distinction between growth
and development must be made. Growth The Rise of Ukay-Ukay or Wag-Wagan
signifies more of something, while Market
development signifies betterment of
something."

The productivist paradigm, or the belief

in endless growth, simply advocated for
continuous growth and rejected any
notion of limits to the environment and
resources. If ever there were problems
with the environment, they were treated
merely as technical problems that can be
Ukay-ukay or wagwagan is a Philippine
store wherein second hand clothes, bags,
and other accessories are sold at a
cheap or affordable price.

NEGATIVE EFFECTS
Discourage investment in local items
Local industry would fade
Drastic drop of local productivity

According to Kutting 2004, the

developing countries supply raw materials
and cheap labor for assembly; the
developed countries consume at low
prices and then dispose of the garments
to buy more products at cheap prices in
the latest fashion
CULTURAL AND SOCIAL EFFECTS OF
The second-hand clothing market UKAY- UKAY
undermines local industries that would be
a step on the way out of the dependent
position of developing countries in the POSITIVE EFFECTS
world economy. ECONOMY
POSITIVE EFFECTS
EFFECTS OF THE RISE OF ● Source of livelihood
UKAY-UKAY OR WAGWAGAN MARKET
IN ECONOMY, SOCIAL AND CULTURE, NEGATIVE EFFECTS
AND ENVIRONMENT ● Discourage investment in local
items
ECONOMICAL EFFECTS ● Local industry would fade
● Drastic drop of local productivity
POSITIVE EFFECTS
Source of livelihood
CULTURAL AND SOCIAL EFFECTS OF
UKAY- UKAY
POSITIVE EFFECTS

Promotes recycling and reusing

Extend lifespan of garments

NEGATIVE EFFECTS
Avenue for empowerment and self
expression
Source of creativity for designers
Source of affordable yet trendy clothing

NEGATIVE EFFECTS

Wasteful because of mass volumes

Promotes rapid disposal of clothing
Using pesticide for cotton production

WHY PEOPLE PATRONIZE

Potentially hazardous to health
Can be source of shame for some

ENVIRONMENTAL EFFECTS OF
UKAY-UKAY

POSITIVE EFFECTS

Product affordability
Availability of branded products at
low price
Uniqueness
Durability
Wide array of choices

Economic Globalization and Managing

Risk in Everyday Life

The globalization of the economy through

trade and new technologies provided the
people of our planet immense benefits
and new exciting possibilities. Yet the
consequences of economic globalization
seems to be a “runaway world" (Giddens,
2002).

Today, people around the world are

confronted with what Giddens calls
manufactured risk. As a result of
advancement in scientific knowledge and
the rise of a reflexive society — a society
where people constantly monitor their
lifestyles—people are more conscious of
the impact of globalization on their
economic life.

As Giddens argues, "Globalization isn't

only about what is "out there", remote and
far away from the individual. It is an 'in
here' phenomenon too, influencing
intimate and personal aspects of our lives.
Yet this growing consciousness of the
growing interconnectedness of the world
through economic channels, does not
necessarily translate to people coming
together to solve global economic
problems like ‘climate change.’”