Group 2

Nature of Economy
Structure of Economy

Historical Evolution of the

Philippine Economic System

Economy as a Social Institution

Nature of Economy
Economy can be viewed as a social institution organized around

production, consumption and distribution of goods and services.

Production
Primary production consists of taking directly from earth and

using without much processing. materials.

Secondary production involves making something from raw Tertiary production involves providing assistance and

information and covers activities.

 Distribution - Once the goods and services have

been produced.

Rule of reciprocity common distribution

principle

Degree of complexity require a centralized

government with its rulers to collect taxes and demand payments.

Free market system major method of distribution

- any items depends on how much others are willing to pay for it, which in return, depends on how many other buyers and sellers are there in the marketplace.

Consumption it means to eat up. It is important how members use and consume goods and services. Economics is the systematic study of social adjustment to, and management of, the scarcity of goods and services.

The idea of supply and demand demand for a product lies on consumers willingness to buy a large quantity at a low price and very high price. Supply is determined by the producers willingness to produce and market a larger quantity.
Goods products which are needed.
Services activities which are performed.

Sociology and Economics

Neil J. Smelser (1991) who described the

relationship between sociology and economics.

He noted that when sociologists look at economic

activity, they ask questions which are broader and less technical. They usually focus on less rational aspect of economic behavior.

THE ECONOMY IN PERSPECTIVE

Types of Economic Systems
1. Pre-industrial societies

2. Industrial Societies
3. Post-industrial Societies

Pre-industrial societies

Hunting-gathering societies relies for food primarily on hunting of animals and gathering of food that grows in the natural environment. Pastoral Societies developed in areas where there is not much rainfall Horticultural Societies People start to raise plants based mainly in human labor. The people become less nomadic

Agrarian Societies one whose economy is based primarily on farming that employs the plow to increase the fertility of the soil. Animals are used for greater productivity.

Industrial Societies

Industrialization refers to the process in which an economy based primarily on energy supplied by animals and human beings changes to one energy such as steam engine.

Five Revolutionary Changes to the Economics of Western Societies

New forms of energy The spread of factories Manufacturing and mass production Specialization Wage Labor

Post-industrial Societies
- It is a society where there is high proportion of workers employed in tertiary sector. Types of Productive system 1. Primary Sector This includes farming or agriculture. This activity emphasizes the use of what nature provides and adapting it to human use 2. Secondary Sector This is concerned with producing finished goods out of raw material. 3.Tertiary Sector It focuses on the provision of services.
Money is any medium of exchange which buyers and sellers agree has some relative fixed value.

THEORIES OF THE ECONOMY

1. Classical Economic Theory Wealth of Nations Adam Smith believed that the nations wealth was tied directly to the amount of money and precious goods 2. Keynesian Economics John Maynard Keynes Keynes General Theory of employment, Interest and Money advocated government stimulation of the economy to avoid inflation and unemployment/ However, he recognized that there would have to be some trade-off between the two. He distinguished between monetary policy and fiscal policy 3. Marxs theory of capitalism His main criticism was that it divided societies into the wealthy few who own the means of production and many poor who do not.

Three Major features of Capitalism

Private Ownership of Property The capitalist economy supports the right of individuals to own almost anything Pursuit of personal Profit A capitalist society encourages individuals to acquire greater amount of private property, even at the expenses of others. Free Competition and Consumer Sovereignty This resulted from Adam Smiths defense of profit The principle of the economy should operate without interference from the government.

Hess, et al. (1992) identified certain features of capitalist economy that focuses on trends toward concentration of power. Theory of Imperialism is based on an analysis of capitalist multinational corporations. This theory argues that when competitive capitalism gives way to monopoly and oligopoly, then large capitalist corporations expand beyond the borders of their own society looking for highly profitable economic opportunities.

Communism
Is a social, political and economic system in which all property is publicly owned.

Socialism The socialist economic system maybe considered as he polar opposite of the capitalist system.

Production are collectively owned and the distribution of the goods and services is guided by public needs.

Nature of Work

Work has been defined as an effort aimed at producing a product or service that is usually rewarded with pay and to which individuals attach a moral value. Types of Work

1.

1.

1.

Blue-collar work This refers to occupation that requires either specific skills or physical effort to produce goods and services. This type of work involves manual exertion. white-collar work Workers are non manual employee. The term is mainly applied to thise who occupy relatively routine posts in the lower sectors of non-manual employment. Professional and managerial work This includes the people who have something to do with policy-making and decision making. They are those who coordinate the many people in the organization.

Profession

This is a prestigious calling, traditionally described before as white-collar job. The purpose of this classification, it is categorized in the third type of work. It requires extensive formal education. The term profession indicates a public declaration to abide by certain privileges.

Four Characteristics to make occupations qualify as profession

1. Theoretical knowledge

2. Self-regulating practice 3. Authority over clients 4. Community orientation rather than self-interest

Some Innovations in the Workplace

1. Flexi time This refers to variations on the standard office or work time. This is especially helpful for people who are having second job usually on part-time basis. 2. With job sharing Two part-time workers may perform a job ordinarily held by one full-time employee and share fringe benefits 3. Quality circle This involves teams of employees and managers who typically meet for an hour a week to discuss how to improve their work performance

4. Team production system This involves groups of workers and a group leader who control the entire production process, and who are responsible for the quality of the products. Workplace democracy This exists where employees become the owners 5. Employee stack ownership plans Some companies agree to employee stack ownership plans whereby the owners contribute shares in the company as part of the workers benefit package

The Changing Nature of work

1. 2. 3. 4.

Creative autonomy Competitive work teams A flatter organization Greater flexibility

New Information Technology and Work

The Information Revolution or Computer age has brought about many remarkable changes, Macionis (2003) noted that one major factor affecting the present day workplace is the increasing role of computers and other new information technology
Computer are deskilling Computers are making work abstract Computers are limiting interaction in workplaces

Computer enhance employers control of workers