Econ 1020winter 2019overview Of Economic Historythe Economic Systems ✓ Solved

Econ 1020 Winter 2019 Overview of Economic History: The Economic Systems Prior to Capitalism Outline : · Historical development and description of pre-capitalist economic systems (up to the end of the 16th century): Description and comparison on the basis of: 1. TECHOLOGY 2. ECONOMIC INSTITUTIONS 3. SOCIAL INSTITUTIONS 4. IDEOLOGY · Prehistoric communal societies · Transition to class-divided civilizations: · Slave society · Feudalism · Assessment of pre-capitalistic economic system: the defining characteristics PREHISTORIC COMMUNAL SOCIETIES They emerged 100,000 years ago (when the homo sapiens – our current species – appeared).

They lasted for about 90 percent of human history. · TECHNOLOGY: simple stone tools; hunting and fishing, gathering of fruits and vegetables. · ECONOMIC INSTITUTIONS: isolated extended families (minimal division of labor between men/women and young/old). Strengthening of communal bonds was the driving force of economic interaction (survival was a concern, but it was not the dominant economic drive) => collective nature of economic institutions (non-market societies). · SOCIAL INSTITUTIONS: collective decision-making, direct democracy (i.e. consensus of the group). · IDEOLOGY: collectivist thinking; cooperation; high degree of equality; beliefs in myths; the value of tradition => the belief in collective action was the glue that held each society together.

How did a transition to a class-based civilization occur? · The ideology, social institutions and economic institutions of the early communal economy all held back rapid technological progress => yet, they were sufficient to promote extremely slow technological progress over the tens of thousands of years. · Development of better tools and agriculture · Dramatic increase in productivity => people could produce a surplus above their subsistence needs (using jars from newly developed pottery, people could put more food away for winter to prevent starvation in cold climates). · From collective labor to division of labor => cumulative process (specialization and development of intellectual work => further increase in productivity). · Higher productivity => increase in population and social & economic stability (from villages to towns to cities). · Higher productivity => accumulation of goods and wealth => economic and political inequality. · Surplus => wealth => wars => wars brought prisoners, who were enslaved. => Movement to a system in which some people owned slaves and others were slaves (dominant classes VS subordinate classes).

SLAVE SOCIETY · TECHNOLOGY: bronze and iron tools; agriculture. · ECONOMIC INSTITUTIONS: slaves work; masters take the product. · SOCIAL INSTITUTIONS: Class differentiation; masters rule. · IDEOLOGY: elitist prejudice, naturalization of slavery, gender discrimination, racism. Constraints and limitations (after hundreds of years): 1. Economic problem: stagnation of productivity; 2. Safety issues: weakening of the army. · The decline in safety and productivity made slavery less appealing to the elite + revolts of the slaves (3rd and 4th centuries C.E.) · On many plantations, slaves were given a little more freedom => SERFS · Eventually, all Western Europe became a set of feudal manors, consisting of lords and serfs (the most powerful and ambitious lords became kings of large territories).

FEUDALISM · TECHNOLOGY: the level of technology fell in the early feudal period and increased only slowly thereafter => little innovation. · ECONOMIC INSTITUTIONS: The countryside was dominated by “manors.†A manor was a social and political entity in which the lord of the manor not only was the landlord, but was also the protector, judge, police chief, and administrator. Each manor was mostly self-sufficient (production for own use, not for the market). Trade involved only goods that could not be produced directly (military and luxury goods for the lords). Towns were the center of manufacturing, which took place through a system of “guilds†(professional associations; division between guild masters, journeymen, apprentices; regulation of both work and social life). · SOCIAL INSTITUTIONS: legal, economic, and political power was held by the lord of the manor; system of mutual obligations and services up and down feudal hierarchy. · IDEOLOGY: Christian paternalism (society=family; the notion of “just priceâ€; money-lending at interest was a sin; the desire to accumulate wealth was sharply condemned) => religion played a central role during Feudalism.

Assessment of pre-capitalistic economic system: the defining characteristics Up to the 16th century (up to the end of Feudalism in Western Europe), markets did not play an important role (they always played a subsidiary role to the main processes of production and distribution). Correspondingly, production and distribution were not based on the search for material gain. · customs, traditions, and religion were at the basis of economic life. It is only after the 16th century, in the context of a growing role of trade and merchants, that the idea of personal gain started to emerge. It is only in the 19th century, after the Industrial Revolution, that we have the introduction of a self-regulating market system (= an economy directed by market prices, and nothing but market prices).

This transformation is entirely unprecedented in human history. · Karl Polanyi (1944) in The Great Transformation : The Political and Economic Origins of Our Time uses the terms “EMBEDDED†VS “DISEMBEDDED†economic systems. · Before the advent of a market system, production and distribution used to be organized according to 3 principles (or some combination of these 3 principles): 1. RECIPROCITY 2. REDISTRIBUTION 3. HOUSEHOLDING · “TRADITION†and “COMMAND†explain the functioning of the economy before the advent of capitalism => it used to be the society to provide the institutional rules explaining the functioning of the economy (pure economic motives at the basis of agents’ behavior was an exception rather than the rule).

How Did Feudalism Change? THE TRANSITION TO CAPITALISM The transition occurred in different ways in different places in Europe. The first transition occurred in England, so we focus on England. · The transformation did not occur in cities. The transformation occurred first in the English countryside: THE ENCLOSURE MOVEMENT [the first enclosure movement (15th-16th century) and the second enclosure movement (17th-18th century)]. After the second enclosure movement, a transformation occurred from subsistence farming to commercial farming => this led to a transition from feudal relations (maintained by tradition and force) to the monetary relations that characterize capitalism.

1 My Topic is Personal Protective Equipment Training Using your Health and Safety Training Topic and OSHA.gov, answer the following questions. This worksheet is meant to assist your exploration of the OSHA website and you training topic area; the more you put into this, the more ahead you will be when developing your safety training. Work to make your answers unique. Students with consistently same answers as other students will get zeros. 1) Name five industries, and their NAICS code, that are required by OSHA to keep injury and illness records.

2) Search OSHA regulations and standards, using your training topic. List the regulation/standard number and title for your topic. a. Are there multiple standards for this topic? What are they? 3) Name five industries/workplaces your training topic would be applicable for.

4) Does OSHA provided training for your topic? a. Share links to this training if OSHA provides them. 5) There are 10 most frequently cited standards. Can you find them (they are listed on OSHA.gov) and is your topic one of them? 6) Find 5 accidents related to your topic.

Copy and paste the descriptions of each accident here (Summary Nr, Date, Locations, Event description, and abstract.) a. In each incident, define where training improvements could be made. 7) Where are the regional offices for each OSHA region? 8) Create 4 objectives for your health and safety training 9) Create 4 outcomes for your health and safety training 10) How will you assess that your training worked? ADAM SMITHS – Quotes: THE THEORY OF THE MORAL SENTIMENT (1759) Motives of human behavior “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their self-interest.†“How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.

Of this kind is pity or compassion, the emotion which we feel for the misery of others, when we either see it, or are made it to conceive it in a very lively manner. That we often derive sorrow from the sorrows of others, is a matter of fact too obvious to require any instances to prove it.†THE WEALTH OF NATIONS (1776) Division of labor => Productivity “…the important part in making a pin is this manner, divided in about 18 distinct operations, which, in some manufactories, are all performed by different hands, though in others the same man will sometimes perform 2 or 3 of them.†“…this great increase in the quantity of work, which in consequence of the division of labor, the same number of people are capable of performing, is owing to 3 different circumstances: 1) The increase in dexterity of every particular workman; 2) The saving of the time which is commonly lost in passing from one species of work to another; 3) The invention of a great number of machines which facilitate and abridge labor, and enable one man to do the work of many.†Market prices and natural prices “The market price of every particular commodity is regulated by the proportion between the quantity which is brought to the market, and the demand of those who are willing to pay the natural price of the commodity.†“The natural price is the central price to which the prices of all commodities are gravitating.†Distribution of income and social classes “The whole annual produce of every country naturally divides itself into 3 parts: the rent of land; the wages of labor; and the profits of stock.†“Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labor.†ADVISING TO THE GOVERNMENT “The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention.

It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.†“…he (i.e., the landlord) will be not only ignorant, but incapable of that application of mind needed to become an intelligent advisor to the country.†“The man whose life is spent in performing a few simple operations (i.e., the laborer)…generally becomes as stupid and ignorant as it is possible for a human creature to become.†“…his dexterity at his own particular trade seems, in this manner, to be acquired at the expense of his intellectual, social, and martial virtues.

But in every improved and civilized society this is the state into which the laboring poor, that is, the great body of the people, must necessarily fall, unless the government takes some pains to prevent it.†Econ 1020 Winter 2019 Overview of History of Economic Thought: ADAM SMITH Outline: · The birth of “Economics†· Adam Smith’s view of the system of “perfect liberty†· The birth of “Economics†When “tradition†and “command†rule (like during the entire pre-capitalist era), there is no need for a discipline called “economics†to understand the functioning of the economic life. In this context, the way in which production and distribution work are intrinsically intermixed with the cultural, technological and/or political features of those societies.

Capitalism differs substantially from previous economic systems, as production and distribution occur through markets. · Economic activities are left to men and women freely responding to the opportunities and signals given by the market, not to the established routines of tradition or the dictates of someone’s command. · Each person can do what it is in his/her individual monetary advantage. Individual gain becomes the motive of economic activities. It is not obvious how all the needs of a society can get fulfilled if each person is only after his/her individual gain => there is need for “Economics.†· Adam Smith’s view of the system of “perfect liberty†Adam Smith () lived during the development of what is called “commercial capitalism†(pre-industrial capitalism).

In this era, England experienced a very rapid productivity growth that put England into the position of the greatest economic and political power of its time + by the mid-18th century, in many cities a significant amount of production took place in what have been called “ manufactories †· In this context, Smith wanted to understand how the system of perfect liberty came into being and how it worked. 1759: The Theory of the Moral Sentiment . Questions: How does it happen that a man, whose economic behavior is driven by self-interest, can form moral judgment and conform to the prevailing rules? What saves us from disorder and anarchy? It is “ sympathy â€: human ability to understand actions and emotions of many kinds.

It is the effect that is produced when we imagine that another person’s circumstances are our own circumstances + the desire to be respected and be honorable beings. In a complex commercial society, economic exchanges are motivated by self-interest. There is “something†that ensures that the interest of the whole society (i.e. social harmony) is realized through the pursuing of private interests · Smith wants to understand how this system works. 1776: The Wealth of Nations . Question: How can a society get rich and powerful? · Wealth = the goods that people consume in a society => Smith proposes a new definition of wealth with respect to the traditional notion of ‘treasures.’ For Smith, it is labor that produces wealth (= seeds of the ‘labor theory of value†elaborated by David Ricardo and Karl Marx) => the role of “ division of labor .†The larger the market, the more finely detailed is the degree to which labor can be specialized and divided, largely with the use of machinery. · There is a limit to the extension of markets and there is a limit to the possible division of labor.

In the very long run, the growth momentum of society would come to a halt. Smith mentioned 200 years to be the longest period over which a society could grow. · The price of commodities . Smith distinguishes between “market prices†and “natural prices:†· The market price was the actual commodity price that existed at any particular point in time in a particular market; · The natural price was a kind of equilibrium price around which day-to-day changes in the market price fluctuated, and it was the forces of supply and demand in a competitive environment that tended to make the market price gravitate around the natural price. · The market is a “ self-regulating system †through the power of competition .

Competition is the regulator of self-interest. This explains the functioning of the “ invisible hand .†· In a capitalist society, for Adam Smith, there are three clear social classes (laborers, entrepreneurs, and landlords), which are due to different conditions of property ownership. Of the three classes, for Smith only labor was the true creator of wealth (=> labor theory of value). The distribution of income between wages and profits was determined in the class struggle between laborers and capitalists over what the wage rate would be. Smith had no doubt that the capitalists were the dominant class in the conflict.

According to Smith, however, in a competitive environment this conflict would be solved in a manner conducive to social welfare. Both the interests of the landlords and the interest of the workers, according to Smith, are directly related to the general interest of the society (whatever obstacles one, it necessarily does the same to the other). The story is different for those who live by profit: they do not have the same connection with the general interest of the society as the other two classes (they always aim to reduce competition). Even though the interests of the landlords may coincide with those of the nation, rent comes to him without any participation on his part. And laborers lack education and time. · For different reasons, landlords, laborers and capitalists cannot become ‘advisors’ to their country. · There is need for a separate government. · The roles of the government .

In a society of perfect liberty, the government should perform three tasks: 1) DEFENSE 2) JUSTICE 3) ‘PUBLIC GOODS’ (i.g. infrastructures, education,..) + The government should prevent the formation of market power. · Smith’s intellectual influence can be seen in two rival traditions in the 19th and 20th century economic thinking: A. One tradition emphasizes the labor theory of value and class conflict => see Karl Marx and the radical tradition of critical economics; B. The second tradition is based on Smith’s idea of the ‘invisible hand’ => see the model of supply and demand in traditional economics (Ch.3 of the textbook). 1 Econ 1020 Winter 2019 Overview of Economic History: Capitalism Outline : A) The defining characteristics of capitalism as an economic system B) The key changes brought about by capitalism A) The defining characteristics of capitalism as an economic system: 1) Institution of private property and “ rule of the law †2) Market-system : most economic exchanges occur through monetary exchanges in markets (sellers, buyers, prices as regulating mechanisms).

3) According to conventional economics, in a capitalist system we can identify a “ representative individual .†In contrast, according to critical economics, capitalism always has always at least 4 different economic classes: A) The class of wealthy capitalists B) The class of small business people and independent professionals C) The class of working people D) The class of destitute 4) Objective = Profit => in a capitalist economy, it is the pursuit of profit that determines: - What will be produced; - How and where will be produced; - By whom and for whom it will be produced. B) The key changes brought about by capitalism Capitalism began in Western Europe around the 16th century (England, the Netherlands, Belgium and Italy) => Mercantilism.

It spread around the world through colonialism. The development of capitalism became particularly rapid and intense after the Industrial Revolution at the end of the 18th century. The notion of change itself, which is now taken for granted, was essentially unknown in human history before capitalism. 1. Technical change 2.

Expansion of consumption possibilities 3. Growing inequality (especially within countries) 4. Population growth 5. Migration 6. Urbanization 7.

The nature of work 8. The transformation of the family 9. Environmental degradation 10. Political developments => the rise of democratic institutions/the welfare state 11. Globalization => shift away from “Keynesianism†(Post-WW2-1970s) to “Neoliberalism†(early 1980s - ) 12. Propensity to economic crises 1

Paper for above instructions

Overview of Economic History: The Economic Systems Prior to Capitalism

Introduction

The evolution of economic systems is interconnected with the socio-cultural, technological, and ideological frameworks that have shaped human societies throughout history. Before the advent of capitalism in the 16th century, human economies predominantly operated under communal, slave, and feudal systems. This paper aims to delineate these pre-capitalist systems, focusing on their technological advances, economic institutions, social structures, and prevailing ideologies.

Prehistoric Communal Societies

Prehistoric communal societies date back around 100,000 years, marking a substantial portion of human existence. These societies were characterized by a subsistence economy reliant on rudimentary technologies.

Technology

Technology in prehistoric communal societies was rudimentary, featuring simple stone tools chiefly used for hunting, fishing, and gathering (Gadamer, 2014). The absence of complex machinery and large-scale agricultural techniques kept productivity levels low and stagnant.

Economic Institutions

The economic institutions functioned around small, isolated family units where division of labor existed minimally. Typically, tasks were distributed according to age and gender, thereby fostering communal bonds essential for survival (Friedman, 1998). As survival was not solely driven by economic gain, these societies embodied non-market characteristics.

Social Institutions

Decision-making was communal, often characterized by direct democracy (Gintis, 2017). Community members collectively discussed and determined the course of action, aiding in resource allocation and conflict resolution.

Ideology

The collective ideology emphasized cooperation and equality, hinging on shared myths and traditions (Bourdieu, 1990). Such a frame of mind fostered a strong sense of community, facilitating collective survival and resource management.

Transition to Class-Divided Civilizations

The slow transition from communal societies to class-divided civilizations stemmed from technological advancements and social changes.

Technology and Economic Institutions

The advent of agricultural practices, alongside innovations like pottery, allowed for surplus production (Polanyi, 1944). Surplus generated by higher productivity became a pivotal factor in the social stratification, leading to wealth accumulation and the establishment of an elite class that owned resources and labor (Piketty, 2014).

Slave Society

From approximately the 3rd century B.C. to the 4th century C.E., slave societies emerged, primarily within the contexts of ancient Greece and Rome.

Technology

Technological advancements in iron produce enabled slave societies to achieve substantial agricultural and industrial productivity (Marx, 1867). However, these societies faced constraints stemming from declining economic returns and security issues.

Economic Institutions

In slave societies, economic institutions were starkly stratified. Slaves worked under the orders of masters, with the latter appropriating the produced goods (Harris, 1999). This stark imbalance established a rigid class system, reinforcing the dominance of elite slave owners.

Social Institutions and Ideology

The social structures upheld strict hierarchies based on class differences. Elitist ideologies naturalized slavery and justified the systemic exploitation of others, fostering cultural acceptance of discrimination and subordination (Finley, 1980).

Feudalism

Feudalism predominated in Western Europe from around the 9th to the 15th century. The period is marked by a distinct decline in technological innovation and mobility.

Technology

Post-Roman Empire, technology regressed initially. Over time, minor advancements, like heavier plows, facilitated agricultural improvements, albeit slowly (Webber, 1980).

Economic Institutions

The economy became organized around manorial systems, wherein lords controlled an estate and provided protection to serfs, who worked the land (Dobb, 1973). Production aimed primarily at self-sufficiency rather than market exchange. Towns operated as hub centers for manufacturing through craft guilds that regulated work and social engagements.

Social Institutions and Ideology

Social order was deeply hierarchical, with lords dictating terms within their manors. The ideology of Christian paternalism framed societal roles based on mutual obligations coupled with notions of a ‘just price’ (Eisenstadt, 1973). Wealth accumulation was largely shunned, and usury condemned. Thus, personal wealth pursuits were not central to feudal life.

Assessment of Pre-Capitalist Economic Systems

By examining the three fundamental economic principles—reciprocity, redistribution, and householding—that predate capitalism, it becomes evident how entrenched customs, religion, and tradition were in shaping economic interactions (Karl Polanyi, 1944). The role of markets prior to the 16th century was merely supplementary rather than foundational in economic life.

Conclusion: Transition to Capitalism

The transition to capitalism was marked by incremental shifts rather than abrupt changes, beginning primarily in England through the Enclosure Movement (Overton, 1996). Increasing privatization in agricultural holdings transitioned societal structures away from feudal ties and community modalities toward a market system driven by profit motives—a transformation unprecedented in human history, setting the stage for the development of modern economics.

References

1. Bourdieu, P. (1990). In Other Words: Essays Towards a Reflexive Sociology. Stanford University Press.
2. Dobb, M. (1973). Studies in the Development of Capitalism. Routledge.
3. Eisenstadt, S. N. (1973). The Political System of Urban-Industrial Societies. Academic Press.
4. Finley, M. I. (1980). Slavery in Classical Antiquity: Forms, Functions, and Substitutes. Cambridge University Press.
5. Friedman, H.L. (1998). The Emergence of Economic Society in the Roman Empire. University of Oklahoma Press.
6. Gadamer, H.-G. (2014). Truth and Method. Continuum.
7. Gintis, H. (2017). The Bounds of Reason: Game Theory and the Unification of the Behavioral Sciences. Princeton University Press.
8. Harris, W. V. (1999). Greek Economic Documents. Oxford University Press.
9. Marx, K. (1867). Capital: Volume I. Penguin Classics.
10. Overton, M. (1996). Agrarian Change in England, 1500-1800. Cambridge University Press.
This comprehensive overview allows for deeper understanding and appreciation of the economic frameworks that preceded capitalism, exploring how technology, ideology, and social institutions coalesced to shape the foundations of economic systems.