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PLS 230 – concept list and definitionsChapter 3Political economy – a field of political science that focuses on the connections between economics and politicsA Class – a lage group of people with similar economic attributes that shape their lifestyles and life chances.Mode of Production – the type of economic system based on methods of production, patterns of property ownership and relations between workers and owners.Means of production – the individual businesses, factories and other entities that produce goods, as welas the machines and other inputs used to produce themBourgeoisie – term used by political economy scholars like Karl Marx to refer to the individuals who own the means of productionProletariat - term used by political economy scholars like Karl Marx to refer to the individuals who use the means of production in their work but do not own them.Working class – individuals in a variety of occupations, such as manual laborers, who have historically generated relatively low levels of income.Middle Class – includes individuals in a variety of occupations that generate moderate levels of income, including small business owners and those in the service sector. Some scholars distinguish between the old middle class (capitalist owners of the means of production) and the new middle class (service workers, white collar managers, and civil servants).Upper class – the wealthiest and most powerful members in a society.Underclass – the poorest individuals in society with few chances for improvement.Median income – the amount of income above what those in the bottom half of the populations earns but below that earned by the upper half of the populationClass structure - the portions of the population that fall into different classes. Example: A country that has industrialized is likely to have a large middle class.Class consciousness – the combination of awareness of belonging to a particular class, recognition of therelationship between this class and other classes and a sense of solidarity with members of this class.Economic development – changes over time in an economy that enhance its productive capacity and improve society’s prosperity.Economic growth – a way of thinking about economic development.Gross domestic product – the sum value of the goods and services in its economy (within the borders of the state) (turning to GDP because they are counting noncitizen product here)Gross National Product – the sum value of goods and services produced by all citizens regardless of whether they live at home or abroad.Constant dollars – a way of measuring (a technique) that controls for price increases (value increases) as a result of inflation.Informal economy – portion of a country’s economic activity from illegal undertakings as well as unreported legal economic activities (babysitters)-gray versus black marketProsperity – overall wealth and standard of living of a country.GDP per capita – GDP divided by the number of people in the state (size of population control to get a sense of the level of prosperity of the country)Purchasing power parity (PPP) – an adjustment to statistics such as GDP per capita, taking into account the cost of living in a given country. In countries where cost of living is high, GDP per capita-PPP may be dramatically lower than GDP per capita. (how much of your currency do you have to spend on a product? – (hypothetical example – dishwasher in the US – 500 versus dishwasher in Japan 700)Economically developed countries – countries with high levels of GDP per capita, a sizeable middle class and diverse economies.Lesser developed countries – countries with low per capita GSP and a small middle class. Their economic activity is often concentrated in agriculture and raw materials extraction.Least developed of the lesser developed countries (LLDCs) – the poorest countries in the worldNewly industrialized countries (NICs) – the more economically developed LDCs (Latin America and Asia)Finished products – goods produced from raw material. This production adds value, making finished products much more expensive than the raw materials that go into them.Income – wages, interest earnings-income based statistics are easier to measure reliably-may underestimate the true gap between the wealthiest and the least wealthyWealth – the total value of an individual’s assetsEmerging markets –LDCs and CITs that are most desirable to foreign investorsCountries in transition – post communist statesResource curse – term used to describe the tendency for developing countries that have the ability to export a commodity such as oil to focus on the extraction of that resource at eh expense of broader economic development. The resource curse is associated with government corruption and the failure to develop a middle class (Dutch disease).Modernization theory – argues that a country’s move from underdevelopment to modernization can be understood and modeled after development in the west. Thus, industrialization, urbanization, western cultural values and democracy make a country’s move from underdevelopment to modernizationPhysical capital – the means of production used in an enterprise.Human capital – the skills and other productive characteristics of workers in a particular state.Urbanization – the dramatic increase in the portion of a country’s population that lives in large citiesImport Substitution Industrialization (ISI) an economic development strategy emphasizing subsidies of key domestic industries and other protectionist trade policies (protect against foreign competition and theoretically create the environment for domestic industrial emergence) but ISI investment in domestic productive areas was too limited by these states – insufficient job creation and weak creation of consumer base for domestically generated products. So it failed.Dependency theory – argues that LDCs have become economically dependent on the EDCs through the system of international capitalism. According to DT, LDCs cannot follow the path of the EDC as modernization theory proposes, because their dependence on the EDCs effectively bars them from this path.Globalization – process of increasing connections in the areas of economics, communications, technology and politics.Foreign Direct investment (FDI) – investment from outside a country into a particular economic entity in the country that is designed to


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UNCW PLS 230 - Concept List and Definitions

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