Soc.173 (Economics + Sociology)
Soc.173 (Economics + Sociology)
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Date Created: 05/17/14
Lecture Notes Max Weber 18641920 Marxhow capitalism worked Webermeaning of how capitalism works Weber def of capitalism o A Profit seeking markets I cultural or mental orientation I ideal I Markets Marx in different words 0 B Theory of History I Progressive rationalization I Relational rationality I Rationality is always based on some social setting means to an ends I Instrumental rationality rationality with respect to means think about how your going to accomplish something the method I Value rationality rationality with respect to ends think about the goals you want to reach 1 they are socially equitable Contrast in neoclassical views the ends are fixed tastes or preferences so there is no value rationality o C Economies are associated with organizational forms In particular forms of authority I E g capitalism is associated with legal rational authority we do what people say because th are in a position associated with bureaucratic rules EX A police officer pulls you over and gives you a ticket and you oblige Violates neoclassical assumption that economy is separate from society 0 ABC Summary Weber is pointing out that economies are associated with a substantive orientatior some sort of ideal cultural mental outlook Labor MarX s Labor Theory of Value Humans can labor I Work what you do alone I Labor work social relations Capitalist economy has mostly labor 0 Different amounts of work and labor in different economies I For Marx 2 types 0 1 Petty small Commodity Production work for survival C Capitalcommodity M Money C Commoditycapital I ex small shopkeepers in medieval Europe the point isn t to make a huge amount of product but just to get the goods I work and labor in equal amounts 0 2 Capitalist production for pro t M moneyC capitalcommodityM more money I Point isn t for capitalist to get other goods but is to make pro t I Very little work I Lots of labor labor makes that chain MCM possible I Laborers work all day because they have nowhere else to go and bc of private property the capitalist keeps the extra commodities that the laborer makes A Labor Theory of Value contends that the value of all commodities is determined by the amount of embodied labor time socially average depends on factories skill 0 Ex In LA drive car wear jeans eat sandwiches have CDs Different use values usefulness of a commodity Entail a social division of labor splitting up tasks and then assigning those tasks to different people Some people make things that they don t use and use things that they don t make Exchang ofgoods it takes 100000 hrs to make car 50 hrs for jeans 01 hrs for sandwich 1000 hrs for CDs 100 CDs 1 Car 10000000 sandwiches 2000 jeans make the numbers equal based on embodied labor time gt Exchange Value equivalent to the price Money makes absolutely no difference in an intrinsic sense just figure out the amount of embodied labor time and that tells you the exchang rate for those goods Exchange value amount of embodied labor time Commodity use valueexchange value Commodity also entails the social division of labor 0 Point of this for labor to get money M the capitalist has to embody labor in commodities goods B To embody labor Capitalist has to extract surplus labor from laborers o Preconditions historically I Laborers have to exist separated from the means of production and the means of their owr reproduction they cant have any capital of their own like a factory and they cant own a fan that could produce goods to survive They cant pay people to make goods for them and they cannot grow their own food so they have to work I Elements of production forces of production raw materials factories all accumulated ti one point 0 Extraction of surplus labor consider food transportation housing that the laborer needs to survive I Embodied labor time in a laborer Level of subsistence s level of commodities associated with this level of substistence Also need means of generational reproduction have to supp kids until they can go off to work themselves subsistence level associated with monej wages amount of commodities 0 Because of competition between the laborers because they cant do anything else capitalists only pay the subsistence wage but laborers work for the whole day Capitalist keeps all of the commodities that the workers have made in extra other than what they need to survive The extra commodities surplus value which is where the capitalist gets M new money 0 gt Industrial capitalism I Generalize the idea of using work and labor to describe economies o 4 Economies I 1 Production for use I 2 Petty commodity production I 3 Industrial capitalism I 4 Postindustrial economy a bit of shift back to work bc rise of service economy Ex Ca hire people to do their garden clean their house So its more work and less labor bc ppl are actually doing things for each other Flexible specialization goods are produced in really short runs and then some things are done by hands at very end status of handmade I As you shift from 1gt 4 more labor and less work Look at Pahl and Mills examples of these types of economies Lampland I Writing in Hungary socialist economy Pre 1989 all countries in eastern Europe were socialist state owned factories people were assigned on the basis of quotas and could buy goods on basis of quotas I Paradoxically Weberian orientation to profit according to Marx you shouldn t in a socialist economy 0 Why Neoclassical say profit is innate No actually socialist state created capitalist institutions Meeting 3 Work What you do alone Labor Work social relations Marx would never really talk about the worker but would talk about the laborers Buying and Selling Labor Wage Rate Determination I Marx wage will drop due to competition 0 Labor power capacity of a human to labor Labor power is bought and sold I sum total of mental and physical abilities o A Preconditions to buysell labor power 1 Individuals must be able to offer hisher labor power on the market as a commodity Use value of labor the usefulness of labor bc you can use it to make stuff Exchange value of labor the person who is alive has to survive e g clothes food and the person has to reproduce O O O a Individuals must control their own labor power b Buyer and selling of labor power have to be formally equal before the law c seller of labor power has to sell it for a limited period of time 2 Possessor of labor power must offer his or her labor power in the market 0 0 They don t possess the means of production They don t possess the means of their own reproduction or their own subsistence They don t have any other option besides to work With conditions 1 2 Marx says you will get a labor market 0 But historically produced usually through violent class con ict England 1517 0 1 Laws eliminate feudal tenures subsistence farming it was in the interest of the state to eliminate some of the feudal laws that kept peasants in place introduced changes that limited the amount of time that people worked 2 Evictions landlords displace tenants 3 Enclosure make people more formally equal before the law bc it gave people the opportunity for land 4 Dissolution of the Catholic Monasteries allowed people to survive on very little bc the monasteries gave hand outs so the people didn t have to offer their labor power in the market I B Wage Rate Determination 0 Labor Theory of Value value is given by the amount of embodied labor time 0 Apply to laborers Amount of labor embodied in the laborer amount of labor embodied in the commodities used by the laborers to survive and reproduce 0 Why the wage rate drops to the subsistence level Competition drives the wage rate down to the subsistence level according to Marx historically not always true Wage rate can t be less than the subsistencereproduction level Ex 2 capitalists frugal mean person pays only subsistence level wasteful nice person pay more than subsistence level Frugal Mean Wasteful Nice Subsistence reproduction Subsistence reproduction Surplus value Mercedes cost for laborer Reinvested capital into factories Surplus Value less than the Pro t frugal capitalist reinvested Wasteful Nice capitalist does not have any extra profit because it is all spent in the form of the Mercedes for the labor so now the capitalist has nothing to survive Wasteful Nice capitalist goes out of business Commodities exchange value Neoclassical View of Wage Rate Determination o Critique of Marx I Socially average time Averaging across different people 0 1 Human Capital capital is something we can build on and we as humans can build on ourselves Ex Leaming o 2 Supply and Demand I Neoclassical theory of wage rate determination is similar to Marxist theory in that commodities and human labor is valued according to a single theory so it s a different theory in Neoclassical and Marxist For NC supply and demand applies to commodities and humans Marxist Labor theory of value applies to commodities and humans I With Neoclassical theory we don t know the wage rate in the abstract as in the Marxist theory but we can observe it empirically I Neoclassical theory elegant and simple but can be expanded to handle quite a bit In general it works less well for labor than commodities wage rate is sticky downwards furloughs people had to take some unpaid vacation days pay cuts layoffs Meeting 4 0 Both Marx and Neoclassical theorists believe on theory will be sufficient in describing costs supply and demand curve 0 Wage rate determination supply and demand curve invisible hand in uences people to reach equilibrium in price 0 From Neoclassical perspective Unions increase wage rate leads to less demand for that labor due to that price It might be good for the unionizers but might have an overall effect by reducing the number of people who have a job 0 Marxist theory would not really attend to this unionized situation Human Capital invest in ourselves so we are more productive in the long run 0 Capital building block what is used to generate value assets and wealth o Generalization of this idea and applied to humans I Invest in yourself and make yourself more productive Ex health preventative care education can make labor more efficient effective and more exible I Initial investment labor or resources have to be withdrawn from the economy but this investment is repaid through more productive labor during the rest of the life course 0 Human capital will affect the wage rate I Ex highly skilled labor HSL 1 HSL is in short supply because of the extensive training period 2 additional human capital increases the productivity of labor which makes HS laborers more valuable they work better 0 Neoclassical perspective humans have the ability to become skilled and more valuable Marxist theory doesn t address Sociological Perspectives on Labor Markets or Wage Rate Determination 0 These are often criticisms than overarching explanations in comparison to NC neoclassical and M Marxist theory 0 Criticisms I 1 Matching it doesn t work as in NC theory depends if j ob or person has wage rate attached to them People are looking for types of jobs not just the wage rate that the job has Jobs that wage not the person entry level low skill ex Minimum wage HS laborers engage in bargaining Person has a wage attached to them and to move to another job they are not going to take less so they bargain Job queue Jobs are filled based on social stereotypes not supply and demand or the wage rate per se people usually have already socially contextualized the kind of person they want to hire ex Age race class appearance etc Employers have a mental list in their head and take the people that matches that queue I 2 Institutionalist view Weber or Polanyi behavior is set through social norms norms for businesses best practices Firms institutions look to other firms and just copy their behavior I 3 Internal Labor Markets Outsiders are generally NOT considered except at entry level I 4 Segmentation economies within economies segments There isn t a supply and demand that will work across the economies just within a specific segment segments within segments its hard to change jobslaborers across those segments I 5 Networks people hire people they know Article by Royster Argues that in schools the employment counselors start to shift white children towards a certain set of jobs and other children towards other jobs people hold implicit or explicit prejudice o Problematic of RaceEthnicityGender The theories about why there is segregation and discrimination do not explain reasons well enough I Differentials in wage rate for the same jobs people of different ethnicities gender get paid different amounts for same job I Occupational segregation minorities women tend to be clumped in lower paying jobs I No theories account well for these differences I Royster Leidner trying to bring sociological perspective to account for these differences Construction of the gender of the job The job itself tends to pick up a gender 101013 Commodities mostly Marxist perspective I What is a Commodity o 1 Commodity use Value exchange value I Use Value usefulness of an object Has quality I Exchange Value amount of embodied labor time Has quantity From the amount of embodied labor time we can gure out the rate at which the goods are exchanged which implies a price 0 2 What sorts of things are not commodities I Have use value but no exchange value No embodied labor time Or they are never actually exchanged production for own use goods have embodied labor time but goods not sold I ex Water in a river air in a room Clean air depends if being used for oneself or if its being puri ed and sold Cap trade commodi cation taking things that are naturally not a commodity and tuming it into one ex Clean air being commodi ed Marx hallmark characteristic of capitalism o 3 Commodities also entail the division of labor I Division of Labor splitting up the tasks and assigning them to different people I People make things they don t use and use things they don t make lmplies that there has to be some way to coordinate the exchange of commodities by comparing the amount of embodied labor time I Commodities with different use values produced by the division of labor have to be exchanged 11 How are commodities produced 0 Through the division of labor not necessarily a factory line can take different forms in different societies 0 Adam Smith 0 1 Can vary I Spatial arrangement Factors of production all in one place Degree of the division of labor Degree of specialization Use of technology Degree of mechanization o 2 Smith argues that the increase in division of labor increases productivity I if one person produces a single piece over and over repitition production becomes more efficient because the worker becomes better and better at doing the simple task Occupations emerge from this blacksmith 9 pin maker 9 wire drawer jobs become more speci c and simplified o 3 Application of technology not so central to smith I save time in a consolidated workshop I machines make the work go faster division of labor between humans and machines 0 Smith argues for 3 effects of the increase in the division of labor repetition spatial arrangements mechanization o Marx expands idea of applying technology I Capitalists compete by substituting capital for labor Short run advantage in doing this capitalist can increase pro t Long run no advantage all capitalists will eventually figure out the same substitutions which will decrease the amount of surplus labor that they can extract so they will all end up producing at the same price 4 Negative aspects of the division of labor I Boredom I Separates mental laborers and manual laborers I Service jobs separated from production jobs Leidner article I Organizations that specialize in different types of jobs ex Universities factories restaurants hospitals Weber s form of authority 9 beaurocracies different organizations will have different norms rules and understandings of interaction and work 0 5 What commodities are available I Smith and Marxs Degree of the division of labor also determines what we can buy and sell Reading ex Sugar Mintz Processed sugar came from global trading and the division of labor Imported slaves from Africa into the West Indies to grow sugar cane and molasses Ship it to N America N America make rum and ship to England etc 0 III Social construction of use values 0 Tea needs sugar 0 Factory I Workers need lunch bread with jam which has sugar and tea 0 Sure sugar is sweet Use value is makes stuff taste good 0 But social use value is based on intemational trade division of labor l0l5l3 Fetishism of Commodities o Fetishism of Commodities Marx def Relations between people get disguised as relations between people and things Because of the social division of labor people produce things that they don t need and need things that they don t make So there has to be some sort of exchange to allow for the obtainment of commodities Ex 100 CD 1 Car 10000000 sandwiches 2000 jeans from earlier example about hours of embodied labor time Jeans shopping mall question are these jeans or anything worth it for this price Marx thinks that people are fundamentally misleading themselves confused We are forgetting the social relations that went into making the object which made it possible for us to know what the price is We disregard the embodied labor time and the social division of labor The machines and the jeans were make by people People search for bargains which many times is made in other countries under terrible conditions We do not see the social division of labor involved in making the object We think it is a relationship between us and the object but it really is a relationship between us and the people that made the object We are fetishizing commodities don t see the social relationships that make the objects possible Appearances can be deceiving This happens because of the complicated division of labor in capitalist economies and because all value comes to us in monetary form in a capitalist economy commodification Cultural critique of capitalism affects our minds how we think Reading Appadurai Commodity candidacy in different societies different things have possibilities to be bought and sold almost everything has a commodity candidacy Social arenas and cultural units it depends on the social and cultural circumstances Georg Lukacs 18851971 Capitalism is more advanced than in Marx s time Agreed with fetishism of commodities but more things are being commodified and it is affecting our brains Reification means taking something that isn t a thing and tuming it into something that has the characteristics of a thing Def taking abstract or human or intangible and giving it objectlike characteristics extension of fetishism of commodities by Lukacs time capitalism had spread and affected more spheres of life more of our culture 0 Ex Time why do we count weeks hours and months in the way that we do Time is a human creation very abstract However we treat it like an object Ex she s wasting my time 0 Ex Money goods have embodied labor time but we calculate that and create dollars coins 0 Ex Love very abstract but we reduce love to the object She doesn t love me she doesn t spend a lot of time with me double reification 0 Just as Marx understood capitalism but which was much more developed in Lukacs time affects how we think and we tend to understand everything in terms of a commodity form Why is it an extension of fetishism of commodities o Marx fetishism of commodities consumed the economic sphere o Lukacs 1 reification consumed all spheres of life bc capitalism spread all spheres of life are affected by capitalist mentalities Extension beyond the economic sphere 2Rei cation can apply phenomena in the economic sphere but fetishism of commodities cannot apply to phenomena outside of the economic sphere 3 Appearances can be deceiving is a Way to understand both f of c reification Marx o CMC o MCM o Profit is the main goal so fetishism of commodities becomes the focus Weber o Profit making motive capitalism is profit seeking in markets means come to dominate 9 instrumental rationality people discover better and faster ways to do things o Just interested in the means of how to produce in the best Way possible Ex garbage recycling Recycling electronics 9 poor people in india and china take apart old electronics without safety regulations and the people get sick We do not think that recycling electronics has a negative affect on other people The social relations get obscured f of c Ex Used clothing toothpaste Time Reading Thompson people had to be taught to be on time when before they used the sun Shows how time is a social construction rei ed Waming in the readings authors will mix up reification and f of c L11 intangible goods Intellectual property Rei cation in general but sometimes buying and selling property rights so ts into f of c Taussig could be Wrong about historical facts great example of reverse f of c Argues that the Indians chewed on sugar cane mined tin in small quantities Sugar cane and tin had use value before the Spanish colonists but they had no exchange value possibly bc they had no embodied labor time When the Indians were first given money as a wage labor they attributed the fact that they exchanged goods for the money as the work of the devil For us f of c is very natural but if your not used to it it is seen as very strange and that the commodities seem to have a life of their own 101713 In HW Rulesnorrns institutions Jobs have wages matching Taussig commodities tin sugar had use value before the Spanish colonists When the Spanish colonists introduced wage labor the Indians then worked for a wage and they viewed the commodities as work of the devil Reverse fetishism of commodities Because the Indians didn t go to the shopping mall and buy things They made things and used them and when they didn t understand how things were made then they viewed it as having a life of its own Labor labor power f of c reification They attributed working in the fields or mines is the working of the devil same with using their objects They are not used to using their labor power in that way Zelizerl Landes amp Posner Markets Zelizer insurance in 1800 s insurance was considered immoral to put a price on peoples lives when it was first sold people wouldn t buy it but later on a market grew up for it Posner babies should be bought and sold instead of adopted babies are not commodities not bought or sold but lands and Posner say that they should be a commodity There would be fewer babies in foster homes if babies were bought and sold However most people disagree it has low commodity candidacy Both show different types of commodity candidacy Fetishism of Commodities relations between people get disguised as relations between people and things Most people don t know who made the goods how it got there etc Reification taking something abstract or human and giving it object like characteristics Types of Economies o 1 Subsistence pre modem 2 Petty Commodity pre modem 0 o 3 Capitalist modem 0 4 Post industrial post modem I some argue that commodities are not actually commodities in post modern society Post Modem PreModem 9 Modem 9 PostModem PreModem Modem PostModem Authors theorists Weber Marx Baudrillard discuss changing from Durkheim Simmel one era to another Freud Smith Attributes Production for use Production for sale Production for sign agriculture low division industrial high division value postindustrial of labor charismatic of labor Legal rational production computers patriarchal authority outsourcing technology handcrafts are more popular no one believes in authority ex everyone thinks politicians are crooks Things with use value Commodities signs PreModem 9 Modem Normatively viewed as good Modem 9 PostModem No normative evaluation its not better just different Baudrillard Jean board of lard o Started out as a Marxist but then moved to cultural theory 0 Founder of school of thought PostModemism 0 Signs are important in postmodem economy 0 Three in uences I 1 Conspicuous consumption consumption to mark wealth or high social status Thorstein Veblen Theory of the Leisure Class describes incredibly rich people who have so much money that they don t know what to do with it People had lots of servants to do the things that they didn t want to do cleaning cooking etc Servants would stand around doing nothing wasting money but showed that the people were so wealthy that they could just throw that money away Wealthy people are consuming conspicuously everyone can see that they are wasting money Present day ex People driving very expensive sports car it just makes them look rich Baudrillard generalizes this everyone can use objects to mark social status I 2 Semiotics process of interpreting signs symbols Saussure Ferdinand word concept sound image Ex Pen thing to write with attempting to make ideas clearer Saussure says that you can attach any image or sound to anything 9 Gok can rename pen Gok Sign attachment is arbitrary but it unfolds historically Ex Pen comes from the latin word for feather because we used to write with feathers As the writing tool changed over time the name stuck with the concept Word concept sound image signi ed signifier sign I 3 Marx Commodity Use Value Exchange Value Baudrillard describes Marx s project as understanding a political economy of production where commodities circulate o Baudrillard writes book For a Critique of the Political Economy of Sign 1977 He is extending on Marx s idea Says that presently there is a political economy of consumption Baudrillard focuses on the why PostModem economy why do people keep buying stuff and consuming much more than they need to survive I Analytic task is no longer understanding production like Marx but is trying to understand why people buy and use so much stuff in postmodem society when they don t really need it o Commodity exchange value use value signi er signi ed sign I Ex Of sign Shorts in Chicago in Winter no use value bc they do not keep you warm no exchange value bc kids made them The baggy shorts showed that they were cool had sign value I Marx political economy of production modem Marx Baudrillard Political economy of Political economy of production modem consumption post modem post industrial Commodities that circulate Signs that circulate Extension of f of c rei cation Another way of understanding f of c exchange value predominates over use value ex Sales entice you to buy things that you don t really need or will use often 0 By extension 9 signi er predominates over the signi ed o Hallmark cards pure signi er represents love affection getting the card is more important than what it is used for 102213 Baudrillard conspicuous nonconsumption cartoon trying to be ecologically friendly image says that you could be driving around in a tropical place without using a lot of gas lmplies what is good for the environment We can use objects to denote our social status We don t buy them because we need them not because they have use value we only buy things because of what they mean socially social status When we see objects we connect the actual physical object together with what they stand for 9 allows us to understand people s social status 0 Exchange value signi er doing the work of standing in for something else 0 Use value signi ed what it is used for or what it actually represents 0 Commodities signs representational purpose and have use Baudrillard late America De Toqueville from Europe visits America and nds civil society and democracy Baudrillard visits southem Califomia Finds Disneyland City Walk spoof of de Toqueville Baudrillard says he found simulacra fakes representations of reality ex Mickey mouse at Disneyland not a real mouse Not real objects beyond a sign Extensions of f of c rei cation signs Another extension of concepts 0 Criticisms of needs Social construction of objects Marx socially average there is a socially average set of needs Mintz sugar need of objects is socially construction set of power relations created that social need for sugar Social need is constructed through a set of social relations Baudrillard other post modemists needs are deliberately created Advertising corporate headquarters how can we get people to think they need our products Hirsch intangible goods How do you create need for something intangible ex Videogames Cultural organizers media savvy help create need for intangible objects have to understand fads rapid turnover Carruthers Babb characteristics of postmodem economy Money Most Natural view of money Smith people instrinsically use money money is linked to division of labor Division of labor Aside Hobbes Leviathan Lord of the Flies humans will be in a state of war if left to govem themselves need a strong state to maintain order Smith is actually a increased efficiency production specialization had affect on commodities People make things they don t use and use things they don t make need some way to coordinate that exchange Money appears to facilitate this exchange Any number of objects that can do this exchange but not very convenient ex Shells cattle gold Money is discussed as logical natural outcome of individual decisions to increase efficiency All that is needed is people acting in their own selfinterest bc individuals decisions aggregate Apply to money Weber critique of Smith s natural view of money money develops over time and historically Distinguishes more social factors Money Means of Exchange any material object that is offered in exchange shells cattle omament grain Can be useful or symbolic objects Means of Payment the acceptance is guaranteed by law Means of Payment can be chartal 1 definite amount 2 amounts are divisible can be used in calculations Can be paper or coin Half way btwn m of e and m of p coins that have to be weighed coins made out of gold in middle ages they could be shaved off critique of the strong state gold or silver standard is also sort of halfway W Marx Most socially Simmel money is a social construction constructed view of money 102413 Weber consequences of money 1 2 3 4 possible to have indirect exchange separate people goods and exchange in time and space increase possibilities of types of exchange relationships possible to have debts credits delays in exchange in time Possible to store value in money Increasing transformation of all economic advantage into the ability to control sums of money not in subsistence petty commodity economy where economic advantage was through land C MC capitalist economy from Marx but Weber agrees M capital in monetary C M more capitalmoney 5 Use of money to acquire all types of goods and services Weber contrast to smith who links the increasing acquire of goods and services to the division of labor similarity to Marx fetishism of commodities Luckhas reification a lot of those services are intangible 6 Businesses are organized around how much money they can control eg shift from a budgetary unit to a pro t making unit budgetary unit family business subsistence or petty commodity economy profit making unit ethnic entrepreneurs capitalist economy 7 Orientation of business activities towards exchanges that make money expansion of these in time and space eg fmancialization 8 Depend on possibility of monetary calculation monetary values have to be assigned to all goods and services people have to be able to enter into these transactions 9 chartal form of money Ways that money can be produced 1 Market money money that is coined by private mint old coins brought in by the individuals purchase new coins a Licensed by govemment govemment gets a fee for each coin b Ex Cipolla reading 15th century Florence Very low level of capitalization Gold and silver orins called lire coins i Florins 38 in 21 century 2 Administrative money notes sometimes debased coins Government is making arbitrary decisions about money a Usually printing money to cover debts usually in times of war 9 creates in ation 3 Regulated money xed laws government can print money only in accordance with them US Historical shift from 2 9 3 1700 s lots of different forms 1863 national banking act regulation about what could be accepted at banks 9 national currency 1879 election bullionists greenbackers political parties who wanted notes or coins 1896 gold silver standard 19001968 US had a gold standard 1933 all other money was outlawed Midterm Review Thompson There were a set of historical changes that occurred around the same time 9 allowed something to be xed and reified time Describes a set of changes technological creation of clocks factory organization Division of Labor helps determine what commodities we have Smith increase in efficiency and production specialization 9 different products Marx technology substituting capital for labor 9 divisions of labor bc machines make more things specific Mintz sugar entailed a set of social power in social relations that were global Entailed a global division of labor Demand for sugar created by this factory labor system in England Marx dialectical materialism material focus on physical being ideal from mental or ideas dialectical way of understanding causality why things happen Always two things that happen together and their opposites I Thesis antithesis 9 synthesis this trend repeats I Pattern represents class con ict Why is the Labor of Men and Women Remunerated Differently nothing explains this well However suggestions are I 1 job ques I 2 statistical discrimination I 3 occupational segregation I 4 investment in human capital I 5 social norms 103113 Money and The State 0 Smith rational decisions of individuals acting in self interest economicnatural o Weber means of exchange means of payment consequences of money how money is created marketadministratedregulated 9 social institutions less economicnatural Goes beyond smith and says that money is more socially constructed 0 Marx o Simmel most sociological socially and historically constructed Marx and Money 0 Labor Theory of Value eg 100 CD s 1 car 2000jeans unit is arbitrary e g sandwich can be unit Since it can be anything might as well be money Gold as the money commodity mostly for convenience Lots of labor embodied in making gold coins mining smelting stamping exploration 9 gold exchanges at a rate that is proportional to the amount of embodied labor time Main Point medium of exchange is arbitrary must be accepted by social convention accepted bc state regulates money 0 Money allows for the circulation of commodities Valorizes makes it into something of value the surplus value embodied in commodities Makes it possible for capitalist to realize a pro t 0 Contrast point of production vs point of circulation more similar to neoclassical theories Role of The State 0 State as regulator of money in Marx Weber Contrast Neoclassical economics emphasis on invisible hand smith 0 Marx Weber economy is not a separate entity but strongly tied to social institutions in particular to state 0 Marx forces of production technology Relations of production ownership of production property relations Superstructure law family politics State Capitalist class is most powerful the functions of the state support the capitalist class 9 monetary policy would support the capitalist class the interest of the capitalist class 0 Weber Economic forms tend to be associated with organizational forms I Capitalism associated with legal rational authority bureaucracy Assure citizenship rights property rightsassure economic transactions I Possible to calculate profit coin money Important for money creates possibilities for regulated money 0 Contrast Power of capitalist class for Marx assures stability of money through the state Weber organization form legal rational authority that assures the stability of money Weber 0 The modem State A Monopoly of regulating the monetary system by statue regulator B monopoly on the creation of money creator C the state becomes the largest receiver and maker of payments user 0 Forrnal Substantive Formal given by law Substantive given by use 0 Apply to Money formal substantive validity of money Formal validity of money state says its value how it can be used etc Substantive validity of money whether that money is actually used in practice 0 State is important for formal validity but state is also very important for substantive validity Ex Prof husband bartering for lower price on bracelet in Turkey and the employee accepted US money it had substantive validity but not formal validity Strong states 9 high substantive validity Weak states 9 low substantive validity Constant formal validity Link between money and the state Weber very important Implications Interesting Things 1 Generally marketization increases over time 0 Money is an exception from Weber s point of view bc market money 9 administrative money 9 regulated money lmplies a decline in marketization contrast to neoclassical economics 0 Weber advocates for a gold standard 2 Challenges to Weber s link between money the state 0 Dollarization dollars shouldn t be taken anywhere where there isn t formal validity and the fact that they are widespread challenges necessity of formal validity 0 Euro should not exist from Weber s point of view bc it is used across all the different states of the European union Weber seemed wrong initial differences between the French Germans but became very strong widely used more countries joined Weber seemed right Greek financial collapse looked like Euro was going to collapse but it didn t Weber seemed wrong Germans bailed out the Greeks 3 Intemationalization of currencies o Intemational system above the level of the nation states national currencies can be bought sold contradicts Webers theory bc no political system for international system 0 9 1800 s 1900 s most countries with stable currencies had a gold or silver standard US had gold standard through 1900 s 0 Bretton Woods 19461971 established a global monetary policy after the chaos of world war II Collapsed early 1970 s gold standard wasn t working There wasn t enough gold in the world to allow people to conduct business There weren t enough gold reserves to make that possible at the exchange rates that were set 9 Countries adopted a oating exchange allows people to buy and sell using different currencies Countries bid on how much they think other currencies are worth no strong political unit that goes along with oating exchange Webers theory doesn t work Floating exchange sort of like market money 0 Money Most Natural Smith 9 Weber 9 Marx 9 Simmel Zelizer Bourdeau contemporary Most Sociological 1 Simmel 18581918 The Philosophy of Money a What is money 0 Money facilitates comparison between commodities similar to Marx 0 Money has no value itself its just a symbol step away from Marx b Properties of Money 0 Instrument tool to get something not something we want in and of itself compare Marx Weber 0 Impersonal neutral the reason that it can be accepted easily between people is that it is very neutral not interesting in and of itself 0 Abstract doesn t have any meaning in and of itself focuses on the economic nature of objects 0 Potentiality confers on people the possibility of doing something c Fiat Money let it be tacere to make has no intrinsic value not backed by a reserve Money is just a symbol or tool that stands in for something else and it has no intrinsic value to it That s why it is so useful bc all of the personal or speci c elements have been abstracted away from that 2 Zelizer a Regroups similarities critiques of theorists on money 0 Similarities between Smith Weber Marx Simmel 1 Market model of money do not confuse with market money a Functions and Characteristics of money are all defined in economic terms don t talk about how money works in the social sphere b All money is the same c Sharp dichotomy between money and other values ex sacred personal social d Money expands into more and more areas of social life 0 e Money can transform nonmonetary values into money but those values cannot change money 2 Criticisms of the Market Model of Money Zelizer criticizes it for not being sociological enough Multiple or special Monies a Money also exists outside the sphere of the market ex Tip b Many kinds of monies ex Tip wages gifts allowances savings accounts for different purposes c Money can have nonmarket roles ex Giving daughter money so she feels that she should visit parents more d Money is sometimes unchangeable gift e Cultural Social limits to modemization Transformative power of money is not endless ex Organs babies Economic and social spheres are interconnected 3 Mechanisms of how multiple of special monies work a Earmarking ex Having a separate savings account for different things b Different users of money are designated ex Will c Different allocations to different people ex Tip vs wages salary vs contract d Different people control different types of money ex Manager who can allocate wages vs ceo who can move assets around stocks vs wages other assets e Sources of money tips from customers vs wages from employer Ex Welfare poor relief specifying that certain users can allocate that money to certain sources Ex dirty money prostitute uses money on other expenses but daytime job as waitress for daily expenses Ex Grants fellowships allowance budget designating how money can be used Bourdieu Capital economic capital wealth income combines marx and weber 0 Cultural Capital education human capital build upon skills know how ability to get along in a variety of contexts 0 These tend to be convertible you can get one if you have the other Ex If you are wealthy then you can pay for your kids education NOT completely convertible I Ex Money high economic capital low cultural capital Beverley Hillbillies struck rich from oil but were white trash They don t have the cultural capital or knowledge to mix with the people in Beverley Hills 0 Point on Money impossible to use money in this case to be cool be knowledgeable 9 limits to monetaization E 0 Marx Own the means of production capitalist Don39t own the means of productions laborers 9 definition of class based on assets wealth o Weber Position in the market 9 definition of class based on income other mechanisms of social stratification I power status cultural capital is generalization of other mechanisms Bourdieu Class 1 High e c Marx High cc Ex doctors lawyers ceo s 2 high ec Bourdieu low cc ex Beverly hillbillies 3 low ec Bourdieu high cc ex academics 4 low ec Marx low cc ex laborers Labor commodities money 9 markets Markets o coordinate the ow of goods services o Def Market mechanism for the distribution of goods services resources o Types of Markets real to virtual locational to abstract 1 Physical Market 2 Space in the abstract sense over which buyers and sellers negotiate exchange space in the sense of social space 3 From the point of view of a Household firms from which it can buy some well defined product 4 From the point of View of a firm the buyers to whom it can sell a well defined product o Types of Markets for Different Entities that can be exchanged 5 Labor Market space in which laborers exchange their labor power capacities in exchange for wages 6 Product Market space in which goods services are bought sold 7 Capital Market financial market space in which money cash credit stocks bonds futures are bought sold 8 Factor Market space in which factors of production land labor and capital are bought and sold 9 Resource Market a raw materials minerals water b infrastructure ex When California tried to buy energy from other states during the energy crises physical entities permits ex St Mary Fire Road professor would jog next to the development company that wanted to put up houses had to get permits and get arrangements to make sure its safe c access to other organizations mergers acquisition d ideas patents copyrights trademarks 10 Political Market access to a politician to change the rules in some way to make it more favorable bargain for the help of the state lobbyists political action committees tax policies tariffs licenses contracts loans use of public lands different actors are trying to change the law and they try to gain access through a lobbyist or political action committees refer to Fligstein politicians lobby the state to try and get laws that are good for their businesses Note for Markets we will distinguish between the classic the neoclassical view 9 Smith as the classic view correct in 13 1 propensity to truck carry things back and fourth from place to place barter and exchange a Ties to the division of labor as d of 1 increases humans naturally figure out that they need to exchange and markets arise naturally from that 9 Markets arise naturally from innate characteristics of individuals 2 The extent of the division of labor is related to the extent of the market a Increase in d of l 9 increase in the market 3 Emphasizes production similar to Marx a Stems from emphasis on the division of labor 4 Tendency to see a market as a physical space region of a city or concrete location a Ex Radford Reading as an example talks about a prisoner of war camp where cigarettes become a unit of currency applies to money unit as well Cigarettes are a means of exchange but not payment bc they are not divisible War camp physical location It shows how market arises naturally and how different people end up with different goods and that they are exchanged through this medium Shows naturalness of markets because all of these men are trapped in a camp and they have stuff that they can get but they don39t use all of it so they exchange to get what they want Neo Classical View more abstract 0 Focuses more on markets in abstract social space sense of markets o retains classic view that markets are natural Shift to analyzing exchange instead of production o Theory of how markets actually work contrast to class view which mostly describes what it is but not the mechanism by which it works o Key Ideas ofNeo Classical Markets are characterized by a degree of competitiveness structure of the market I Extent to which individual firms have the power to in uence the price or other terms of exchange 0 o 2 Extremes 1 Perfectly competitive market no firm or person has the power to in uence the price Lots of buyers and sellers Ex Me not buying a t shirt from the gap will not in uence their sales that much because plenty of people will still buy shirts from them Because there39s so many buyers and sellers the disappearance of a few of them will not in uence the price No individual competition 2 Monopoly market single buyer single seller usually single seller individual firms have lots of power over the price ex Electricity can only buy from one company bc lines have to be laid down and only one company does it They say how much your electricity is going to cost and we have no control over that No individual competition Cell phone carriers ATT Sprint Verizon T mobile lots of competition half way between 2 extremes Also 3 Planned Market socialist countries ex Lampland Reading government sets quotes and prices everything by legislation Standard Assumptions of Neo classical Model 1 Lots of firms and supply demand works look at supply and demand curves 2 Preferences are fixed stable 3 Buyers and sellers have to have equal information if they don39t then one will have more power than the other 4 Spot Market transactions occur on a one time basis between people who don39t know each other Normative Assumptions what should be from neo classical perspective 1 Markets are good lower prices higher outputs and production markets are efficient 11 12 13 Neo classical View Economists know that these assumptions are not met Methods of residues in relation to reality interest focus o Economists Assumptions hold majority of world Don39t hold residue minimal part of world that they are not interested in o Sociologists Assumptions hold minority of world Don39t hold residue majority of world Why the Neo Classical Assumptions often Don39t Hold Refer to Block 1 Marx all markets tend toward monopolies a Capitalists compete substitute capital for labor division of labor between human and machines capital reduces labor costs in short run i Some capitalists are successful some are unsuccessful go out of business and become laborers 9 fewer capitalists over time 9 monopoly market 2 Asymmetries of information a In general buyers have less information b Ex Professions doctors have more information about health than their patients doctors have to take boards to ensure continual learning 3 Clientelization refer to Geertz reading bazaar a Return to the same seller b Networks personal ties supply and demand are not coordinating buying decisions the way that neoclassical theorists say they would 4 Sets of cultural prescriptions drive buying selling not supply demand ex Zelizer a Ex Spillman article 5 Advertising creates tastes preferences creates problems for neoclassical view of markets a Advertising creates demand ex Hirsch article cultural objects advertised through media 9 makes people buy things that they wouldn39t normally want Sociological Views of Markets A Weber 1 Difference between Neo classical Weber39s view Weber rationality that39s relational you only know what39s good for you in some sort of social setting where you can compare to other people a theorizes that interests are inseparable from participation in a market process interest struggle between 2 parties who are actually engaged in exchange ex Clerk selling something in a store competition struggle between all the people potentially interested in exchange ex Group of producers thinking about making something new so they perform surveys or ask other companies to figure out if it is a good idea and if people will buy it both struggles over price people do not know what it is that they will want until they compare to others b more attributes are described in variable terms people can be more or less engaged in interest or competition struggle c degree of con ict competition is peaceful con ict People are always engaged in a set of social relations with others in a variable way Contrast to NC where preferences are stable and set 2 Central Terms a Market situation for any object of exchange is all of the opportunities of exchanging it for money known to the parties engaged in the struggle relation to people Weber is interested in understanding what can be bought and sold where there are humans engaged in a social interaction in a certain context ex Radford market situation defined by the Prisoner of War camp ex Zelizer Landless possner insurance babies weren39t available 9 available for purchase b Marketability the degree to which an object tends to be exchanged on a market related to object depends on context c Market Freedom the degree of autonomy enjoyed by the parties to engage in market struggle cf compared toMarx s preconditions for wage labor parties had to be formally free before the law d Regulation of the market what kind of things reduce this autonomy or what kind of autonomy do people need to engage in the market Restrictions 1 tradition 2 convention social disapproval norm 3 law 4 Voluntary action inaction Collusion ex Firms act as a group to set price Professional agreement B Harrison White refer to Swedberg reading Neo classical considers exchange but White says that most markets are actually production markets reverts to the classic view of markets Revenue volume not supply demand 0 Price is set firms pick a volume to obtain a certain revenue 0 Niche or some particular good that no one else is making so that they don39t have to compete ex Make certain type of shoe that no one else has made and charge certain price in comparison to other objects so make volume accordingly C Neil Fliggstein focus on pp 656661 says that economic interests aren39t the most important profit is not primary Firms interested in stability and survival not going out of business cf budgetary unit profit making unit budgetary unit purpose of survival Firms interested in long term stability of employees number Assuring steady predictable income not profit Problems in assuring stability 0 1 Price competition firms can go out of business I a cooperation not competition agree on prices terms etc I b integration control more aspects of production I c diversification producing more and different types of products o 2 Firms try to form political coalitions 9 state crucial for markets I States provide stable reliable conditions under which the firms operate firms don39t want things to change they want a set of laws to be constant and steady over time so they know what conditions they have to operate under I 9 conceptions of control created cultural orientations toward action knowledge of how to operate understanding of what39s appropriate I firms also directly try to in uence politics policies generally in their benefit 1 own property themselves not the state 2 want the state to uphold their property rights 3 firms want states to restrict competition to keep stability Politics as Markets different from other views Unmarketables on the Market variables list of Weber39s terms Life Insurance Zelizer sociologist Insurance at first considered immoral to say how much a persons life was worth Despite structural changes no one would buy the insurance It took a certain sales strategy to increase marketability over time Market situation changed Babies Landes posner NC economists taking this point of view Normative Argues that babies should be bought and sold its more efficient bc there would be fewer babies in foster care They should increase market situation marketability for the purchase of babies 111415 Economy Historical understandings of economy 1 Economy oikos Greek household 2 Economy as a manor manorialism a Manor was the Lord39s household b Different spatial patterns c Lord controls or has extensive rights over most of the land Refer to Emigh e article small town called castelnuovo Spatial arrangement househouse are in some sort of central arrangement a bunch roughly clustered in a circle called a nucleated settlement Working land was outside of the circle cluster of houses Not a manor but similar Modern Contemporary Understandings of Economy 3 Economy entails the allocation of scarce resources closest to Neo classical economy 4 Economy is that part of social life that pertains to that distribution of resources contextualizes the economy vis a vis other social spheres a Relationship between economy social life is theorized differently by different theorists b Review i Marx mode of production forces of production technology raw materials relations of production property ownership property rights division of labor Corresponds to a superstructure politics education religion family ii Weber elective affinity tend to be seen together between economic forms organizational forms Ex Capitalist economies legal rational authority bc of that progressive rationalization Ex Precapitalist economies traditional authority household economies patriarchal authority Karl Polanyi 18861964 Economy based on principles of economic integration 1 Reciprocity groups of equal power and generalized exchange between the groups Everything eventually gets around to everyone and not in a pairwise fashion ex Emigh article Castelnuoro practiced generalized reciprocity There was enough property being circulated through inheritance dowrys sales that land was being circulated through the community 2 Householding production for subsistence or own use when it is described separately from reciprocity usually its not generalized reciprocity so its just pair wise exchange 3 Redistribution central authority collects all of the resources and then redistributes them Redistribution is unequal done on some political basis Polanyi ex ancient societies Ex Szelenyi applies this to socialist economies Ex US welfare educational financial aid 4 Market Exchange resources allocated by price buying selling in markets capitalists sometimes 1 2 are identical Primary Mechanisms 0 Reciprocity householding subsistence manorial pre industrial petty commodity feudal 0 Redistribution socialist ancient state economies 0 Market Exchange Capitalist Not a secondary mechanism is possible 0 Lampland socialist primary mechanism is redistribution but secondary mechanism is market exchange 0 Capitalist but secondary mechanism is redistribution taxation welfare Feudal Manorial Very close link between economy society 0 Because resources are allocated through fealty or personal loyalty 0 Political system is directly linked to the economic system Subsistence Economy 0 refer to Emigh article castelnuoro o Householding reciprocity 0 Never feudal really Socialism Redistribution o Szelenyi s extension of Polanyi 1960 s 70s Countries that are still socialist China Vietnam Cuba N Korea Laos But before late 198039s early 199039s most of Eastern Europe lots of Asia were communist Africa Latin America had some elements of socialism Russian Revolution 1917 people had read Marx and wanted to implement his ideas that socialism has no private property or wage labor Weber dies 1921 Lenin no private property state ownership counter Marx o Bureaucrats technocrats managers who ran factories in the name of the state Redistribution o State becomes the primary redistributor I Make economic plans which are implemented through bureaucrats collecting the commodities giving resources back in the form of wages apartments housing vacations etc State Capitalist not really socialist o commentators complained about this ex Szelenyi Transitions to Capitalism 1 Historical rise of capitalism in Europe in the early modern period a transition from feudalism subsistence based economy to capitalism 2 Contemporary transition to capitalism in E Europe Asia China Note Latin America Africa usually discussed in terms of structural adjustment a Transition from socialism to Capitalism 1 Transition from Feudalism to Capitalism a Marx Class Struggle Marx looked at the way in which the balance of power between the lords and the peasants allowed the capitalist class to arrive Thesis lords Antithesis peasants 9 Synthesis Capitalists England 1 cast of full scale transition to capitalism Brenner ideal balance of power after the Black Death in the late 14th century Peasants are granted additional rights over property almost the rights of full ownership they become like agrarian capitalists after black death the lords had to give the peasants more extensive rights over property 9 peasants became more like capitalists Alternative cases I lords have too much power Eastern Europe 9 re enserfment I Peasants have too much power France 9 retain all their traditional rights b Weber a Protestant Ethic Early Weber cultural theory of the transition to capitalism Weber argued that the transition to capitalism was spurred by a religious in uence religious doctrine of predestination 9 incredibly hard work but constant reinvestment god already decided who would be saved and who wouldn39t So people worked incredibly hard because lots of hard work wealth no conspicuous consumption meant that you must be saved b General Economic History Late Weber c Neoclassical Theory of Transition from Feudalism to Capitalism a Neo institutionalist b Secure property rights create incentives for investment need a state to create property rights peoples self interest will lead them to do the hard work that39s necessary for capitalism to develop Smithian perspective people naturally truck barter and exchange i Ex North Thomas The rise of the West states in W Europe in late mideaval early modern period created private property rights States were still feudal but slowly created more and more elements of private property rights 2 Transition from Socialism to Capitalism a Class Theory Marx a Relative balance of power between the classes was crucial for determining the economic transition Important classes in socialism were workers peasants political elite a 1 Elite Theory b Note this is also applied to historical transitions from feudalism to capitalism c Developed by Lachmann argued that it was the balance of power between elites not classes that explained the transition to capitalism eg capitalist state clergy eg England capitalist elites first gain power over other elites then transformed economic relations d Also applied to contemporary debates about the transition from socialism to capitalism Ex Szelenyi Elites under socialism intellectuals communist political technocrats managers who actually ran the factories Szelenyi argues that it39s the balance of power between these three elites that determined how and when capitalism occurred When there is some sort of power sharing between the intellectuals and technocrats more likely to get capitalist relations Intellectuals were the driving force behind this change They b Neo classical Theory a Washington consensus US government support this at the time b Shock therapy idea economies need some sort of shocking c Rapid privatization people have innate incentives to produce and get ahead increase profits in their own self interest i Reading by King argues that this was largely unsuccessful bc profit seeking isn39t natural institutions don39t arise over night there are social and culture in uences which in uence buying etc sociological critiques of neoclassical theories c Weberian Theories a Usually discussed either in terms of state theory or organizational theory States need to do basic things to establish capitalist relations b Developmental state create opportunities for investment set up infrastructure State establishes institutions and organizations that structure or make possible capitalist relations eg foreign investment inputs investments technology infrastructure accountability laws rules from above Theories can be contradictory Debate over Eastern Europe China Change from above or below From above transition to capitalism was started by state elites From below starts from ordinary peoples peasants and workers Ordinary people find ways to invest and innovate and they force the people above to make changes Victor Nee below State leaders have been resistant to capitalist changes Ordinary workers and peasants got together and formed coalitions and figured out how to buy and sell things more efficiently Szelenyi shift in the balance of power towards peasants and workers which forced the state to relax on regulation etc Andrew Walder above state allows enterprise zone where they relax rules about redistribution and allow people to engage in profits Eastern Europe Consensus above State actors initiate most changes Fits Weber theory better Comparative Capitalisms So far discussed capitalism more or less as a single entity that could be described by a single definition Cc instead varieties of capitalism or think about different manifestations of the definition historically 2 predominant forms of capitalism emerged 1 LME Liberal Market Economies AmericanUS model UK Markets do work roughly like the neo classical model suggests competition between firms There are lots of firms there is buying and selling trying to make lots of profits trying to compete State plays relatively little role in the economy 2 BCME Business Coordinated Market Economy State plays a much more active role compare to Weberian developmental state Lots of cooperation between firms and between sectors of the economy 0 Eg education businesses Businesses send people from their firm to teach classes Or classes may actually be held at business site Lots of cooperation and overlap Businesses assume many other infrastructural investments building roads developing electricity etc Eg Germany Under Pressure of globalization considerable pressure for countries to conform to the LME model at least ideologically to establish free markets and free trade What happens Reading FG Babb compare four countries two of each kind and they try to understand what happens under this pressure to conform to this model of LME Compare Britain Chile Implementation of reforms strictly in the LME model Compared that to Mexico France where they already followed more of a BCME model and LME reforms implemented more loosely Findings Mexico France reforms actually create economic growth the countries remain more or less in line with the BCME model 9 2 forms of Capitalism both are fairly robust Past Present Link LMEBCME linked to historical conditions eg reading Biernacki Labor theory of value Cultural differences in the labor theory of value were different in different countries England LME Germany BCME Talks about the historical cultural interpretations and then the outcomes LME and BCME England the way that labor was controlled during the transition to capitalism was that the wage rate was regulated 9 employment was thought of in terms of how much production was accomplished or how many commodities were produced o So producers thought about the exchange of those commodities o Like a Marxist Point of exchange theory Germany Labor power itself was the most important consideration The ability to produce in a particular setting Wage was a compensation for that labor power 9 labor power that was considered to be bought and sold point of production theory Implications o England labor seems much more to be a contract for labor but because the exchange of commodities is key the contract is often interpreted as a contract for the amount of commodities produced o Germany contract is seen strictly as one for labor power between a powerful employer and a subordinate employee 0 Effects o 1 Workers demands have different forms I a England laborers want higher wages for the commodities they produced I b Germany laborers stress more vacations breaks and being compensated for expending labor power 0 2 Different models I LME comes out of English individualism this more contractual model I BCME comes out of German corporatism less contractual model Over time this actually leads to more protest in Germany more cooperation between the sectors Final Review Cumulative review definitions Si ns Word sound image concept Gok thing that Emigh writes with Original attachment of these two things is arbitrary can rename things to anything Unfolding historically over time two create a single unity the two things become attached Generalization Signifier signified Sign word soundimage concept meaning Sound or image is doing the work of making something understandable Er endings are doers ied endings are past tense so signified concept which is the thing that it represents Ex Backpack signifier physical object of the backpack concept belong to a community of learning at a university 9 sign of collective belonging at a university Beaudrillard exchange value use value Commodities signs signifier signified Polanyi Mechanisms of economic integration corresponds to different types of economies 1 Reciprocity equal exchange between equal units generalized Subsistence economies feudalism tribal small holding communities in Tuscany e article Emigh property was sold to their neighbors so property circulated in the community ex dowrys bc there were a lot of daughters in the community and dowrys people ended up getting property from Polanyi reading each of the islands trade in a circle so eventually all of the goods would go around to all of the islands 2 Householding very similar to reciprocity but usually exchange is not generalized Ex frontier US like little house in the prairie o Production for own use 3 Redistribution unequal exchange between unequal units Central authority collects all of the resources and redistributes them to the units ex Polanyi ancient civilizations revolved around water in middle east Egypt irrigation systems states more powerful than individual houses o Szelenyi applied this to socialism Socialism was widely interpreted to mean no private property which meant ownership of private property by the state 9 socialist state was a redistributor 4 Market Exchange goods services are bought and sold Price is the mechanism that allocates economic resources ExCapitalist economies Zelizer Market Model of Money 1 Functions and characteristics of money are always defined in economic terms 2 All money is the same 3 Sharp dichotomy between money and other types of social values 4 Monetary concerns expand into all areas of life that everything will eventually be taken over by money you will be able to buy and sell everything 5 Money can transform non monetary values into money but non monetary value cannot change money Directionality Summary of the similarities among Smith Weber Marx Simmel Zelizer Sociological Orientation to Money Special Multiple Monies 1 Money exists outside the sphere of the market 2 Many different kinds of money 3 Money has non market roles 4 Money is sometimes un exchangeable 5 Cultural social processes that limit monetization criticism of point 4 of Market model of money ex selling Teeth or buying and selling babies is not acceptable Money and Simmel in regards to the state 1 Money facilitates comparisons between commodities definition of money or answers the question what is money 2 properties of money 0 Money is an instrument 0 Money is impersonal 0 Money is abstract 0 Money has potentiality allows people to do things Thursday 112113 Culture and exchange The Performativity of Markets Markets Definition mechanism for the distribution of goods services and resources Culture Definition patterned ways of organizing thought that informs the way we interact w the social world 0 Shared cognitions values norms expressive symbols 0 Fetishisms of commodities is an example of culture we think about things by price which exemplifies culture bc it39s the way we think about things culture provides the categories of understanding htat enable us to engage in economic action 0 ex the importance of trust in the New Girl clip culture constitutes rational actors the atoms of the market economy culture and the constitution of market societies culture provides markets w a distinct set of repertoires strategies and institutions that constitute market society 0 teaches us what39s acceptabe unacceptable Culture as Market Institutions Institutions have to do w reification Like all things in life culture can be reified into institutions 0 Reification taking something abstract human and giving it objective characteristics 0 Institutions shared rules which can be laws or collective understandings held in place by custom explicit agreement or tacit Examples of market institutions Fligstein 1996 0 Property rights governance structures conceptions of control rules ofexchange Three ways culture is developed 1 the state can instill a culture in a market through legal rules Fligstein 1996 2 firms and actors that are trying to exchange the same commodities can observe one another and develop cultural understandings Hirsch 1972 3 technical instruments used by firms and actors can provide institutionalized knowledge Performativity Definition market technologies like economics the theories and models that make up the academic discipline produce and reproduce the life and social relations of market actors Market actors will perform according to the knowledge provided by these technologies 0 Were performing this technical theory way of thinking when we39re making decisions Sef fufiing prophecy applied to firms in the market Merton definition a false definition of the situation evoking a new behavior which makes the original false conception come true 0 public definitions of a situation in the forms of prophecies or predictions become an integral part of the situation and thus affect subsequent developments Example Strawberry Auctions Garcia Parpet 2007 found that the strawberry auction market in Fontaines En Sologne France was a perfect free market o 1 Prices of goods were given None of the actors were strong enough to influence the price exchange 0 2 Products are homogenous o 3 Buyers and sellers are free to enterleave the market 0 4 Market is transparent Everybody has perfect knowledge The perfect market emerged due to the active coordination of few interested parties which include and economic advisor who was well versed in neoclassical economic theory The strawberry market is a performance of neoclassical economies Example doube entry bookkeeping Carruthers and Espeland 1991 tries to explain why certain technologies and instruments become institutionalized They provide a historical account documenting how doube entry bookkeeping becomes so popularly used 0 Documents with revenues debits As a practical method it increases rationality 0 Provides mechanisms of trust between exchange partners The rhetoric of accounting also gave businessmen the legitimacy needed to garner trust from their trade partners Trustworthiness is associated to ones proficiency in performing double entry bookkeeping In other words one can perform and signal trustworthiness in investment conversations by being good at doube entry bookkeeping Market information regimes Another type of technical instruments that shapes the behavior of market participants Definition sets of regularly updated market information 0 Ex billboard for music These instruments serve as tools to help firms and actors in the market to understand the relative performance of their commodities Firms want to be deemed successful by these lists To be deemed successful by these information regimes firms and actors adopt behaviors that are valued in the methodology of these instruments Ex Law school rankings Espeland and Sauder 2007 looked at the US News and World Report39s Law School Rankings and its effect on law school behaviors Law school rankings are institutionalized in the field people equate it to a ranking of quality law schools around the world started to perform the behaviors that will help improve their rankings A lot of these behaviors do not actually correspond to a rise in quality in law school 0 Ex peer assessment from other law schools Ex Billboard Top 100 Anand and Peterson 2000 looked at the historical development of biboard s top 100 hot singles chart Pre soundscan an accounting measure of counting scanned barcodes behind CDs billboard relied on sales people at record shorps to capture the sales performance of music 0 Wasn39t accurate 0 Sales people generally only reported good numbers for music they like Once billboard started using soundscan a newfound recognition of country music was established Change in billboards methodology led to music labels started dedicating more of its resources in developing and advertising country music talent Evidence that music labels are performing what is deemed valuable by this instutionalized instrument 92613 15 Goal Denaturalize the economy They seem natural to us because we do them all the time Neoclassical economics reinforces the natural view Inevitable efficient Generally read about in newspaper NPRpopuar press This is not the only way of thinking of things Historically constructed in a particular way Assumptions of Neoclassical Perspective of Economy Economy is an separate entity You can take economy activity and carve it off and look at it by itself If you understood the laws of economics it would give you the tools to understand all the aspects of a corporation Rationality Black Box rationality The idea that I could step into a big black box all by myself and with the information in my head decide what is ration and what is best for me and that I can calculate the options for different actions Woudn t need any input from the outside world You need constant social input to be able to decide what to do Methodological Individualism Way of studying somethingpeople on their own Way of studying something based on an individual Way of knowing empirically about the world by studying what individuals do separately and add up what they do to get the whole picture as if the social setting doesn t matter Invisible Hand Impersonal forces that guide the economy Pnces Generally sociologists believe there are broader things like culture family relations that will affect the economy Pareto optimal Adam Smith is an example WRONG Off by 200 years 1723 1790 Take Marx and Weber as a critique of neoclassical view Come after this view but are responding to Smith Marx 1818 1883 Ends up in London and meets up with wealthy Angles to supports him to write Great analyst of capitalism Interested in how seemingly moral people could exploit others Dialectical Materialism Materialism human activity is the driving force of history Dialectical way of understanding causality There are two polar opposites constituted at the same moment Thesis and antithesis There is a con ict between them and something needs to be worked out o Synthesis a new thesis Ideal ways of thinking thoughts Marx economy is a mode of production 2 parts Forces of production Technological machines and raw materials Relations of production Property ownershiprights division of labor Super structure Politics law family education Therefore 0 Marx is analyzing capitalism as a combination of ideal and material factors 0 We are generalizing this to be true of all economies that are a mix of ideal and material 0 You cannot analyze an economy by itself Formally Marx defines capitalism as a system based on private property and wage labor OOOOO
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