Differentiate between economic systems and discuss theoretical views of economics

In this section, you’ll examine the basics of economies, which refer to the social institution through which a society’s resources (goods and services) are managed. The Agricultural Revolution led to development of the first economies that were based on trading goods. Mechanization of the manufacturing process led to the Industrial Revolution and gave rise to two major competing economic systems. Under capitalism, private owners invest their capital and that of others to produce goods and services they can sell in an open market. Prices and wages are set by supply and demand and competition. Under socialism, the means of production is commonly owned, and the economy is controlled centrally by government. Several countries’ economies exhibit a mix of both systems. Convergence theory seeks to explain the correlation between a country’s level of development and changes in its economic structure.

What You’ll Learn To Do:

• Understand types of economic systems and their historical development
• Describe capitalism and socialism both in theory and in practice
• Discuss how functionalists, conflict theorists, and symbolic interactionists view the economy and work

LEARNING ACTIVITIES

The learning activities for this section include:

• Reading: Introduction to Work and the Economy
• Reading: Types of Economic Systems
• Reading: Capitalism and Socialism
• Reading: Theoretical Perspectives on Economics
• Self-Check: Economic Systems