SOCIOLOGY II

Sessions 14 &
15
Sociology of Work and Economic
Life
Learning objectives
• Assess the social significance of work and the sociological ramifications of paid and unpaid work
• Understand that modern economies are based on the division of labor and economic interdependence. Learn
Marx's theory of alienation.
• See the importance of the rise of large corporations; consider particularly the global effect of transnational
corporations.
• Learn about the effect of global economic competition on employment, Consider how work will change over
the coming years.
BASIC CONCEPTS

• Work: The activity by which people produce from the natural world and so ensure their survival. Work should not be thought of exclusively as paid
employment. In traditional cultures, there was only a rudimentary monetary system, and few people worked for money. In modern societies, there remain types
of work that do not involve direct payment (e.g., housework).
• Occupation: Any form of paid employment in which an individual regularly works.
• Housework: Unpaid work carried out in the home, usually by women; domestic chores such as cooking, cleaning, and shopping. Also called domestic labor.
• Economy: The system of production and exchange that provides for the material needs of individuals living in a given society. Economic institutions are of
key importance in all social orders. What goes on in the economy usually influences other areas of social life. Modern economies differ substantially from
traditional ones because the majority of the population is no longer engaged in agricultural production.
• Capitalism: An economic system based on the private ownership of wealth, which is invested and reinvested in order to produce profit.
• Technology: The application of knowledge of the material world to production; the creation of material instruments (such as machines} used in human
interaction with nature.
• Division of labor: The specialization of work tasks by means of which different occupations are combined within a production system. All societies have at
least some rudimentary form of division of labor, especially between the tasks allocated to men and those performed by women, With the development of
industrialism, the division of labor became vastly more complex than in any prior type of production system. In the modern world, the division of labor is
international in scope.
BASIC CONCEPTS
• Economic interdependence: The fact that in the division of labor, individuals depend on others to
produce many or most of the goods they need to sustain their lives.
• Informal economy: Economic transactions carried on outside the sphere of orthodox paid
employment
1 - The social structures of
economic life: formal economy
Formal economy
• Work can be defined as the carrying out of tasks that require
the expenditure of mental and physical effort, which has as its
objective the production of goods and services that cater to
human needs.
• An occupation, or job, is work that is done in exchange for a
regular wage, or salary. In all cultures, work is the basis of the
economic system, or economy. The economy consists of
institutions that provide for the production and distribution of
goods and services.
Capitalism

• Modern societies are capitalistic. Capitalism is a way of

organizing economic life that is distinguished by the
following important features: private ownership of the
means of production; profit as incentive; free
competition for markets to sell goods, acquire cheap
materials, and use cheap labor; and restless expansion
and investment to accumulate capital.
• Capitalism, which began to spread with the growth of
the Industrial Revolution in the early nineteenth century,
is a vastly more dynamic economic system than any
other that preceded it in history. Although the system has
had many critics, such as Marx, it is now the most
widespread form of economic organization in the world.
Capitalism

• The study of economic institutions is of major

importance in sociology, because the economy
influences all segments of society and, therefore, social
life in general. And economic institutions are themselves
always changing.
• One reason for such change is technology which
harnesses science to machinery in order to produce an
ever-increasing variety of goods more cheaply.
• Another reason is globalization, which creates global
competition among not only firms but also workers:
Whether you are an auto worker in a Detroit factory, an
engineer in Silicon Valley, or a graphic designer in New
York City, there is likely to be someone half a world
away with the skill, talent, and drive to challenge you
for your job.
Work as a way of life

Work has more going for it than drudgery, or people would not feel so lost and disoriented when they became unemployed. How would you feel if you thought you would never
get a job? In modern societies, having a paid job is important for maintaining self-esteem as well as paying the bills. Even where work conditions are relatively unpleasant, and the
tasks involved dull, work tends to be a structuring element in people's psychological makeup and the cycle of their daily activities. Several characteristics of work are relevant here:
• Money. A wage or salary is the main resource many people depend on to meet their needs. Without such an income, anxieties about coping with day-to-day life tend to multiply.
• Activity level. Work often provides a basis for the acquisition and exercise of skills and capacities, Even where work is routine, it offers a structured environment in which a
person's energies maybe absorbed. Without it, the opportunity to exercise such skills and capacities may be reduced.
• Variety. Work provides access to contexts that contrast with domestic surroundings. In the working environment, even when the tasks are relatively dull, individuals may enjoy
doing something different from home c hares.
• Structuring one's time. For people in regular employment, the day is usually organized around the rhythm of work. Although work may sometimes be oppressive, it provides a
sense of direction in daily activities. Those who are out of work frequently find boredom a major problem and develop a sense of apathy about time. As one unemployed man
remarked. "Time doesn't matter now as much as it used to.
• Social contacts. The work environment often provides friendships and opportunities to participate in shared activities with others. Separated from the work setting, a person's
circle of possible friends and acquaintances is likely to dwindle.
• Personal identity. Work is usually valued for the sense of stable social identity it offers. For men in particular, self-esteem is often bound up with the economic contribution they
make to the maintenance of the household. In addition, job conditions—such as the opportunity to work in jobs that are challenging, not routinized, and not subject to close
supervision—are known to affect a person's sense of self-worth.
2 - The social structures of
economic life: informal economy
THE INFORMAL ECONOMY
• Many types of work do not conform to orthodox categories of paid employment as they cannot be classified. Much
of the work done in all societies, for example, is performed outside formal business firms, and indeed outside the
formal economy itself. The term informal economy refers to transactions outside the sphere of regular employment,
sometimes involving the exchange of cash for goods and services provided, for which no official records are kept,
and which therefore escape government notice. In poor countries, a significant part of the national economy consists
of such informal work; one study estimates that informal work accounts for nearly four-fifths of all nonagricultural
employment in Africa, contributing as much as 40 percent of GDP in the subSaharan part of the African continent.
THE INFORMAL ECONOMY

• Housework, which has traditionally been carried out mostly by

women, is usually unpaid. But it is work nonetheless, sometimes
satisfying, often difficult and exhausting. Unpaid housework includes
such things as having primary responsibility for raising children,
cleaning, shopping, and attending to countless (and unending)
household chores. It typically involves one of the most important tasks
of any society: the socialization of children, a crucial step in preparing
them for adulthood.
Volunteer work

• Another form of unpaid labor that

has an important social role
involves volunteer work for
charities or other organizations.

• When the New York City Marathon

got canceled after Superstorm
Sandy, many runners who had
planned to race turned to volunteer
cleanup efforts Instead. What social
role does such unpaid labor play?
The Impact of the Volunteer Sector

• The non-profit sector touches millions of people through

employment, volunteer opportunities, and providing services. It also
impacts the gross domestic product, or GDP. In 2018, 63 million
Americans served about 8 billion hours to support communities.
Voluntary service has a financial value to the economy of $24.69
per hour, which is equivalent to $197.5 billion/year.
THE INFORMAL ECONOMY

• Finally, illegal drugs constitute a major part oft he informal economy in

many countries, estimated to range globally from only several hundred
billion dollars to as much as 1.48 trillion U.S. dollars in 2022.
• There is widespread disagreement over the exact numbers —not
surprising, perhaps, given the illicit and secretive nature of the global drug
trade. Moreover, drug enforcement agencies have an interest in showing
that there is a significant need for their services, which may result in
inflated estimates of the problem.
3 - The rationalization of
society
The social division of
labor
• One of the most distinctive characteristics of the economic system of modern societies is the existence
of a highly complex division of labor.

• Work has become divided into an enormous number of different occupations in which people
specialize.

• In traditional societies, non-agricultural work entailed the mastery of a craft. Graft skills were learned
through a lengthy period of apprenticeship, and the worker normally carried out all aspects of the
production process from beginning to end. For example, a metalworker making a plow would forge the
iron, shape it, and assemble the implement itself.

• With the rise of modern industrial production, most traditional crafts have disappeared altogether,
replaced by skills that form part of more large-scale production processes. An electrician working in an
industrial setting today, for instance, may inspect and repair only a few parts of one type of machine;
different people will deal with the other parts and other machines.
• One of the main features of modern societies, by contrast, is an
enormous expansion of economic interdependence. We all depend
on an immense number of other workers — today stretching right
across the world — for the products and services that sustain our
lives. With few exceptions, the vast majority of people in modern
societies do not produce the food they eat, the houses in which they
live, or the material goods they consume.
The rationalization of society:
from an enchanted to
disenchanted world

• Max Weber (1864 - 1920)

• Disenchanted of the world:
societies are becoming more
complex where science,
calculation and predictability
are becoming part of
everyday life

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The rationalization of society

Max Weber (1864 - 1920), founding father of sociology, was the first to define rationalization as a process of modern society.

Economy and society: Weber was concerned about the relationship between economy and society, how a society shapes its own
economy, as well as the scale of its economy. In other words, modern societies’ economy can be understood by the scale of their
trades, that are no longer local, but became global.

For Weber, the increasing rationalization of society, of politics, and of the affairs of humanity is something unique to contemporary
times. According to Weber, rationalization is the central driver of the modern industrialized world.

The rationalization refers to the process by which modern society has increasingly become concerned with: Efficiency (achieving
the maximum results with a minimum amount of effort).

With efficiency comes: division of labor, specialization, industries, and modern technologies. All of these factors contributed in
making the society more rational and thus less traditional.

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 Karl Marx in The Capital, argued that the central problem of modernity was (1) the capitalist economy (the
capitalist structure of domination), combined with (2) the exploitation of workers (alienation) by the "capitalist
industry”.

For Karl Marx the search for profit (capital) is considered to be the main driver of the rational “capitalist
industry” which in turn creates more social inequalities and social domination through the social division of

Rational labor. Also other Marxist scholars such as Theodor Adorno observes that rationalization and the capitalist
industry leads to more globalization (i.e. cultural homogenization).

capitalism
and cultural But Max Weber analyzed in contrast, how cultural values such as the Christian religion in western culture
(and especially Protestantism), also played an important role in the definition of the modern and rational
"capitalist structure”. By comparing different religions, Max Weber observes that Protestant religious values

values
had a strong impact on the rationalization process of the modern society. The Christian Protestant ethic adopted
ascetic and rational behaviors towards financial calculation and investment, especially when compared to
other religions such as the Christian Catholic church, or Hinduism.

In other words, according to Max Weber, the rational and capitalist society has been partly created (or
influenced) by Christian Protestant religious values in the West. Thus, secular capitalism has religious origin
that spread first among Western societies and then around the world.

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The social and
religious origins
of modern
capitalism

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The Protestant
Ethic

• The Protestant ethic has contributed in

many aspects to define the spirit of the
capitalist culture.

• The Protestant ethic is a religious action

or orientation – idea of a “calling” –
where individuals must view
work/accumulation of profit as a spiritual
calling from God.

• Hard work and money is a sign of God’s

favor and reward.

• Doctrine of predestination: path to heaven

or hell, are predetermined by God-
allowed justification of class system
(winners vs. losers: winners are God
elected).

• Ascetic behavior: save and invest to

accumulate more (but don’t spend for self
pleasure).

• Last but not least: Time is money

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The modern economy is
based on rational and
industrial capitalism

• Large multinational corporations

can now be found all over the
world
• The spirit (management)of these
large corporations is based on the
Protestant ethic of capitalism

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Rationalization

• The rationalization refers to the process by

which modern society has increasingly become
concerned with: Efficiency (achieving the
maximum results with a minimum amount of
effort).

• The concept of rationalization can be compared

to the process of division of labor for Emile
Durkheim.

• Division of Labor: the assignment of different

parts of a manufacturing process or task to
different people in order to improve efficiency.

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4 - TYPES OF
CAPITALISM
Family capitalism

• There have been four general stages in the development of business

corporations, although each overlaps the others and all continue to coexist today.
The first stage, characteristic of the nineteenth and early twentieth centuries, was
dominated by family capitalism. Large firms were run either by individual
entrepreneurs or by members of the same family, and then passed on to their
descendants. The famous corporate dynasties, such as the Rockefellers and
Fords, belong in this category. These individuals and families did not just own a
single large corporation but held a diversity of economic interests and stood at
the apex of economic empires.
Managerial capitalism

• In the large corporate sector, family capitalism was increasingly succeeded by managerial
capitalism. As managers came to have more and more influence through the growth of very
large firms, the entrepreneurial families were displaced. The result has been described as the
replacement of the family in the company by the company itself.
• The corporation emerged as a more defined economic entity. In studying the 200 largest
manufacturing corporations in the United States, Michael Allen (1981) found that in cases in
which profit showed a decline, family-controlled enterprises were unlikely to replace their chief
executive, but manager-controlled firms did so rapidly. There is no question that managerial
capitalism has left an indelible imprint on modern society. The large corporation drives not only
patterns of consumption but also the experience of employment in contemporary society.
Welfare capitalism

• Welfare capitalism refers to a practice that sought to make the corporation—rather

than the state or trade unions — the primary shelter from the uncertainties of the
market in modern industrial life. Beginning at the end of the nineteenth century, large
firms began to provide certain services to their employees, including child care,
recreational facilities, profit-sharing plans, paid vacations, and group life and
unemployment insurance. These programs often had a paternalistic bent, such as
sponsoring "home visits" for the "moral education" of employees. Viewed in less
benevolent terms, welfare capitalism had as one of its major objectives coercion, as
employers deployed all manner of tactics, including violence, to avoid unionization.
Institutional capitalism

• Institutional capitalism refers to the emergence of a consolidated network of

business leadership, concerned not only with decision making within single
firms but also with the development of corporate power beyond them.
• Institutional capitalism is based on the practice of corporations holding
shares in other firms. In effect, interlocking boards of directors exercise
control over much of the corporate landscape. This reverses the process of
increasing managerial control because the large blocks of shares owned by
other corporations dwarf the managers' share-holdings.
5 - CORPORATIONS AND
CORPORATE POWER
The new power of corporations

• Since the turn of the twentieth century, modern capitalist economies have been more and
more influenced by the rise of large business corporations. Whether they are run by owners
or managers, the power of the major corporations is very extensive. When one or a handful
of firms dominate in a given industry, they often cooperate in setting prices rather than
freely competing with one another.
• When one firm occupies a commanding position in a given industry, it is said to be in a
monopoly position. More common is a situation of oligopoly, in which a small group of
giant corporations predominates. In situations of oligopoly, firms are able more or less to
dictate the terms on which they buy goods and services from the smaller firms that are their
suppliers.
GLOBAL OUTSOURCING

• Changes in industrial production include not only how products are

manufactured but also where they are manufactured. In flexible
production systems, there is truly a global assembly line: The
companies that design and sell products seldom make them in their
own factories, instead outsourcing production to factories around
the world.
JOB INSECURITY

• Flexible production has produced some benefits for consumers and the economy
as a whole, but the effect on workers has not been wholly positive, Though sonic
workers undoubtedly do learn new skills and have less monotonous jobs, the
majority find their work lives less secure than before. For many workers inside
the United States, the long-term employment, rising wages, career advancement,
and health and retirement benefits once associated with a job at a General Motors
or Ford plant have become a thing of the past. To keep their jobs, as previously
noted, U.S. workers have had to accept pay cuts and reduced benefits packages.
And, of course, many have lost their jobs to overseas competition.
GROWING UNEMPLOYMENT

• Several factors probably explain the increase in unemployment

levels in Western countries at that time, One was the rise of
international competition in industries on which Western prosperity
used to be founded. For example, in 1947, 60 percent of steel
production in the world was carried out in the United States. Today,
the figure is only about 8 percent, whereas steel production has
tripled in China.
Will automation make things
better or worse for workers?
Thank you for your
attention 🙏