CULTURAL, SOCIAL AND

POLITICAL INSTITUTION:

ECONOMY
LEARNING COMPETENCY:

 Analyze economic organization and its impacts on

the lives of people in the society (UCSP11/12HSO-
IIa-24)
 E Y O Y O E
Z C F N A M

__ __ __ __ __ __ __ (7)
 E C T P O C
R Y I R J I

__ __ __ __ __ __ __ __ __ __ __ (11)
 T H O N I R
I B U R T E

__ __ __ __ __ __ __ __ __ __ __ (11)
 B X A O K K
T M I R E T

__ __ __ __ __ __ (6)
 E T S A S K
R R U N F B

__ __ __ __ __ __ __ __ __ (9)
WHAT IS ECONOMY?
All societies have an economy which can be viewed as
a social institution organized around production,
consumption and distribution of goods and
services.
It operates in generally predictable manner.
PRODUCTION
primarily consists of taking directly from earth and
using without much processing, as in hunting,
gathering, farming, and mining
involves making something from raw materials, such
as pottery, automobiles, or nuclear weapons
involves providing assistance and information and
cover activities from baby-sitting to international
banking, to sports to entertainment (Hess and
Associates, 1992)
DISTRIBUTION
Rules:
Reciprocity – means that giving of gifts obligates the
recipient to return something similar value
Retribution – it will require a centralized government
with its rulers to collect taxes and demand payments
and decide how to allocate this wealth in order to
maintain their own power
DISTRIBUTION
Free market system – in which the worth of any item
depends on how much others are willing to pay for it,
which in return, depends on how many other buyers
and sellers there are in the marketplace (Hess and
Associates, 1992)
 TRANSFERS
 Banking: Moving funds among two or more accounts
held by the same or different individuals.
 Real Estate: Conveyance of title to a property from
the seller to the buyer through deed of transfer,
following payment of the price.
 Securities trading: Delivery of a stock certificate by
the seller's broker to the buyer's broker followed by
conveyance of the title by recording the change in the
stock (share) register.
 MARKET TRANSACTIONS
 The exchange of goods and services through a
market. The set of market transactions taking place
in the economy is most important in terms of
measuring gross domestic product (GDP).
 Market transactions provide the basic data used at
the Bureau of Economic Analysis to begin the
estimation of GDP.
 MARKET TRANSACTIONS
 However, these data don't just want to measure
market transactions, their goal is to measure
economic production.
 As such, they eliminate some market transactions
that do not involve economic production, then add
economic production that do not involve market
transactions.
 MARKET AND STATE
 call for a holistic view of the relationship between
the material and relational dynamics of society,
 on the one hand, and between these dynamics and
institutional dynamics on the other.
 the state contains mechanisms that are essential to
the existence of markets themselves, and these
mechanisms are not “natural” given.
 MARKET AND STATE
 Economies are actually institutional production
systems wherein the material density of the state
both as organization and administration is of
relevance.
CONSUMPTION
Literally, it means “to eat up.”
In society, it is important how members use and
consume goods and services. This is also important
aspect of culture.
Throughout history, the household has been a unit of
production and consumption. (Hess and Associates,
1992)
WHAT IS ECONOMICS?
“Economics is the study of how men and society
choose, with or without the use of money, to employ
scarce productive resources which could have
alternative uses, to produce various commodities over
time and distribute them for consumption now and in
the future amongst various people and groups of
society.” (Paul A. Samuelson)
HOW ECONOMISTS UNDERSTANDS ECONOMIC
PROCESSES?
Demand – a product lies on the consumer’s
willingness to buy a large quantity at a low price and
very little at a high price
Supply – determined by the producer’s willingness to
produce and market a larger quantity when the price is
high and less when the price is low
Therefore, the prices and supplies of goods are
usually a compromise between the consumer and
producer.
GOODS VS. SERVICES
Goods – refers to products which is needed (such as
shelter, food, clothing, and medicine), or that are
desired/wanted (such as television, smartphone,
watches, jewelry, and the like)
Services – those activities which are performed in
order to benefits someone (e.g. medical and health
care, teaching, hotel and motel accommodation, car
repair and maintenance, entertainment, and others)
RELATIONS:
When sociologists look at economic activity, they ask
questions which are broader and less technical. They
usually focus on less “rational” aspect of economic
behavior. (Smelser, 1991)
The differences in practice as caused by the fabric of
values – social, economic and political – within which
acts of giving, rewarding, compelling, or selling take
place. (Thitmus)
RELATIONS:
Concerning work, sociologists look for motivations
other than money. This may involve the need for
companionship or a sense of belonging.
On the other hand, to economists what is important in
work relations is the motivating power of wages and
job security.
RELATIONS:
To sociologists, economic organization is a set of
status and power relations. They are interested to
know how these relations influence behavior in the
workplace. Hence, they study norms, or standards of
behavior, and sanctions.
On the whole, sociologists have with them a tool kit
that includes insights into socialization, personal
interaction and roles, groups, organizations and social
structure.
DEVELOPMENT OF ECONOMIC SYSTEM
PRE-INDUSTRIAL SOCIETIES
Hunting-gathering
Societies
Characteristics:
1)relies for food on
hunting animals and
gathering food that
grows in the natural
environment
2)people are nomadic
PRE-INDUSTRIAL SOCIETIES
Pastoral Societies
Characteristics:
1)people domesticate or
raise animals for food
2)people look grazing
land for their livestock
3)tend to be nomadic,
which facilitates trade
and warfare with other
PRE-INDUSTRIAL SOCIETIES
Horticultural Societies
Characteristics:
1)people started to raise
plants
2)people are less nomadic
3)work specialization
developed
4)political system is
pursued
PRE-INDUSTRIAL SOCIETIES
Agrarian Societies
Characteristics:
1)based in farming and
cultivating the soil to
make it fertile
2)animals are used in
greater productivity
3)money economy and
trade developed
INDUSTRIAL SOCIETIES
Industrialization
 refers to the process in which an economy based
primarily on energy supplied by animals and human
beings changes to one energy such as steam engine
to electricity
INDUSTRIAL SOCIETIES
Characteristics:
1.economy based on mechanical sources of energy
and that uses science and advanced technology to
produce goods and services
2.division of labor becomes highly specialized
3.movement of work out of the home and into the
factory
4.automation is introduced
5.increase the GNP is expected and indicates the
FIVE REVOLUTIONARY CHANGES
BROUGHT BY THE INDUSTRIAL
REVOLUTION
INDUSTRIAL REVOLUTION
New forms of energy
James Watt applied a
steam engine to the
production of material
goods in 1765
steam power surpassed
muscle-power technology
INDUSTRIAL REVOLUTION
The spread of factories
steam power and large
equipment and machines
rendered cottage
industries operated by
human beings obsolete
work became impersonal
family life became
alienated
INDUSTRIAL REVOLUTION
Manufacturing and
mass production
large scale production
was introduced
the technique in factories
led to mass production
INDUSTRIAL REVOLUTION
Specialization
when a nation or
individual concentrates its
productive efforts on
producing a limited
variety of goods
division of labor was
adopted
DIVISION OF LABOR BY GENDER
Women’s work tend to be confined to traditional roles
as dictated by their biological characteristics.
Men’s work tend to be those requiring physical
strength, frequent travel, assumption of high level of
risk and danger.
DIVISION OF LABOR BY AGE
Elderly people are expected to contribute much food.
Older men and women alike play an essential role in
spiritual matters.
Elders with their past experiences are considered as
repositories of knowledge and wisdom especially in
non-literate societies.
PATTERNS OF LABOR
Cooperative Labor – if the effort involves the whole
community, a festive spirit permeates the work.
Example: Bayanihan
 Craft Specialization – in contemporary industrial
society, there is a greater diversity of specialized task
to be performed. By contrast, in small scale society,
division of labor typically occurs in terms of gender or
age. With division of labor, there is specialization.
INDUSTRIAL REVOLUTION
Wage labor
people became wage
laborers under the
supervision of a factory
staff
supervision became
routine and intense
POST-INDUSTRIAL SOCIETIES
A society where there is a high proportion of workers
employed in tertiary sector.
TYPES OF PRODUCTIVE SYSTEMS
PRIMARY SECTOR (Toffler, 1980)
Agricultural Societies
emphasizes the use of what nature provides and
adapting it to human use
SECONDARY SECTOR
Industrial Societies
transforms raw materials into manufactured goods
with the use of machines and complex division of
labor
TYPES OF PRODUCTIVE SYSTEMS
TERTIARY SECTOR
Post-industrial Societies
focuses on the provision of services, although there
is still dependence on the secondary sector, more
and more division of labor is happening in providing
services
POST-INDUSTRIAL SOCIETIES
Characteristics:
1.decentralization of production
2.the use of renewable energy
3.deurbanization
4.work in the home
5.merging of the roles producer and consumer
POST-INDUSTRIAL SOCIETIES
Four emerging industries:
1.Space industry
2.Industry in the depth of the oceans
3.Genetic industry
4.Electronics industry
ECONOMIC SYSTEMS
Wrote the book entitled “An Inquiry into
the Nature and Causes of the Wealth of
Nations” (1776), which was considered as
magnum opus and first modern work of
Economics.
He laid the foundations of free market
economic theory
“The real tragedy of the poor is the
poverty of their aspirations.”
CAPITALISM
It is a system under which resources and means of
production are privately owned, citizens are
encouraged to seek profit for themselves, and success
or failure of an enterprise is determined by free-
market competition.
EXAMPLE: The United States is one of the most purely
capitalistic societies in the world. Most U.S. businesses
are privately owned, but the government does
regulate business practices.
WELFARE CAPITALISM
It is a system that features a market-based economy
coupled with an extensive social welfare system that
includes free health care and education for all citizens.
EXAMPLE: Sweden allows private business ownership,
but the government controls a significant part of the
economy. High taxes support an extensive array of
social welfare programs.
STATE CAPITALISM
It is a system under which resources and means of
production are privately owned but closely monitored
and regulated by the government.
EXAMPLE: South Korea’s government works closely
with the country’s major companies to ensure their
success in the global marketplace.
Wrote the book entitled “Communist
Manifesto” (1848), the one of the world’s
most influential political documents
believed that workers (proletariat) were
being treated badly by the
capitalist/middles class (bourgeoisie) and
should rise up and demand for classless
society and eliminate private property
proponent of Conflict Theory
 the closest collaborator of Karl Marx in the
foundation of modern communism
coauthored The Communist Manifesto
(1848), and Engels edited the second and
third volumes of Das Kapital (1867) after
Marx’s death
In Das Kapital, Marx proposes that the
motivating force of capitalism is in the
exploitation of labor, whose unpaid work is
the ultimate source of surplus value
COMMUNISM
It is a system of political and economic organization in
which property owned by the community and all
citizens share in the enjoyment of the common wealth,
more or less according to their needs.
EXAMPLE: The rise of Marxist-inspired Bolsheviks in
Russia in 1917 and under the power of Vladimir Lenin
and Joseph Stalin, communism came to denote as a
totalitarian system which a single political party
controls the government.
SOCIALISM
It is a system under which resources and means of
production are owned by the society as a whole, rights
to private property are limited, the good of the whole
society is stressed more than individual profit, and the
government maintains control of the economy.
EXAMPLE: China is a socialist country. The government
owns and controls almost all natural resources.
 REFERENCES:
BOOKS:
Palispis, Epitacio S. (2007), INTRODUCTION TO SOCIOLOGY AND ANTHROPOLOGY, Rex Book Store, Manila

WEBSITES:
Lecture Contents:
https://www.slideshare.net/dan_maribao/dannymaribaolesson-9economicinstitutions
https://www.slideshare.net/workanneship/economic-institution-53829687
https://en.wikipedia.org/wiki/Adam_Smith
https://en.wikipedia.org/wiki/Karl_Marx
https://www.britannica.com/biography/Friedrich-Engels

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