Summary
Economics is a social institution that helps to manage the resources of society. Previously, the economy was called a simple exchange of goods, and although the economy is now more complex, the goals remain the same. There are two types of solidarity correlated with the economy, namely mechanical and organic. Mechanical solidarity exists in communities built on the same work, religion, and education. Organic solidarity is based on the interdependence created by the specialization of labor.
Types of Economic Systems
There are many different economic systems, but the main ones are socialism and capitalism. Plans change under the influence of the financial situation and when the ruler changes. Previously, people were engaged in hunting and gathering and lived as nomads moving in search of food. After there were no more resources left in this area, they moved to another location with all the things they had. They could not trade with other groups because they did not have enough goods.
The economy began to appear when people started to engage in agriculture. New technologies and jobs appeared, and the surplus was learned to store, process and transport. With the advent of agriculture and the economy, villages began to grow and become cities. Administrative employees started to be required, and disputes arose about various aspects of people’s lives.
The money became the same for everyone, and the cost and the exchange rate were set. Taxes and fees for the maintenance of the state began to appear, and monopolies, exclusivity and high tariffs were created. After the 18th century, machines were invented to speed up and simplify the production of goods. For agriculture, tools with a gasoline engines began to be used to produce more goods. The invention of more convenient ways to perform tasks efficiently was called the Industrial Revolution. Undoubtedly, this has created social inequality between wealthy owners and poor workers. Later, post-industrial that is, information communities began to develop.
Capitalism and Socialism
Capitalism is an economic system in which private property exists, and there is a motivation to make a profit. Under capitalism, people invest their funds in producing goods and services. With an increase in demand and an excess of supply, the cost of the product increases, and with an increased supply and low demand, the price falls. Competition occurs when several companies offer the same products, leading to lower costs.
Socialism is an economic system based on state ownership; everything produced is public. The state controls the ownership, production, and distribution of what is produced. There is market socialism that has the features of capitalism, for example, considering the market’s requirements.
Theoretical Perspectives on Economics
Convergence theory demonstrates that as a country’s economy grows, its social organization can change. For the rapid growth of the economy, the government must have the opportunity to attract cheap capital for investment and the availability of new technologies. The functionalist point of view is to maintain the active functioning of the economy. The conflict theory is that the rich save money at the expense of the poor’s labor. Symbolic interactionist theory consists of children’s inheritance of a career from their parents.
Globalization
Globalization is the merging of governments and financial markets through international trade into a single market. The global economy and multinational corporations are the main driving force of globalization.
Recent Economic Conditions in the United States
In 1963, a law was passed to reduce the wage gap between men and women. In addition to gender discrimination, there is also racial and ethnic discrimination, which impacts earnings. During the high economic pressures of the United States, the financial system could not withstand, people could not pay their loans and mortgages, and default began.
Work in the United States
Increasingly, people have begun to earn money through online games over the Internet. Women who undergo many training courses to get a high-paying job began to join the work actively. Immigrants are changing their location in search of a job with a decent salary.