Soc 542 NOTES 08 29 2012 Democracy in America Alexis de Tocqueville 1835 It is difficult to foresee to what pitch of stupid excesses their egotism may lead them into what disgrace and wretchedness they would plunge themselves lest they should have to sacrifice something of their own well being to the prosperity of their fellow creatures The Americans on the other hand show with complacency how an enlightened regard for themselves constantly prompts them to assist one another and inclines them willingly to sacrifice a portion of their time and property to the welfare of the state Weber studies the bureaucracy He calls it an iron cage Necessary only for the government Most efficient system Medicare Medicare Advantage 7 48 million covered by Medicare 1960s Golden Era in Capitalism We observe growth in economy The Embeddedness of Markets Meaning markets coexist with are shaped by and depend on other social relations Markets are embedded institutions Economic sociology the analytic starting points are groups institutions and society Actor in interaction actor in society Assumption actors are linked with and influenced by others Mainstream economics the analytical starting point is the individual methodological assumed Economic sociology the economic action can be rational traditional or speculative irrational Rationality is a phenomenon to be explained not Mainstream economics a given set of preferences utility maximizations Rationality a given assumption or a subject of research constant vs variable Economic Phenomenon Market Exchange o Economy Market we do not assume Market is already there we study how and why the Market emerged in history Econ Soc Start in the middle ground organizations and networks Move to the micro research based on bounded rationality behavioral decision theory Macro conflictual negotiations among inter dependent actors formal and informal mechanism of governance power status legitimation Economic sociology differs from economic theory primarily by the great importance it attaches to social relations and social institutions It is however similar to economic theory in arguing that the concepts of interest and rationality are indispensable for understanding of economic phenomena Bounded rationality rationality is limited because our information is limited Week 2 Karl Marx The difference between human beings and animals is LABOR Labor is a necessary condition independent of all forms of society for the existence of the human race The history of all previous societies has been the history of class struggles conflict o people who own the means of production vs people who want or do not want the means of production Class in itself vs class for itself Class interests vs individual interests Class defines the system Social Structure The relations of production the forces of production and the mode of production Based and superstructure ideology o Economy is the base o Superstructure is the politics culture norm including religion religion is opium relieves pain Calming make you feel good He said religion will disappear in the future We have religion because of our economy base that way they follow the superstructure and the system Everything is governed by the base Relation of production forces of production and mode or production National Debt 16 Trillion rates increase Debt is problematic because it can harm economic growth when interest Two Mechanism that the large national debt increase interest rates When the economy is near full employment booming loans are in short supply and the demand for loans from government will have a significant impact on interest rates Psychological panic lenders worry about the ability of repay and request higher interest rates Solution Reduce spending Raise the government revenue Protestant Ethic and the Spirit of Capitalism About how ideal and material interests drive people s actions Religious Interests economic interests Social Economies Economic Analysis o Economic phenomenon pure economic component Ideal type o Economically relevant phenomenon difference is cause and consequences Other social phenomenon econ o Economically conditioned phenomenon econ other social For example an economic downturn causes a spike in phenomenon crime An election when the economy is bad usually the ruling party is NOT reelected The Protestant Ethic and the Spirit of Capitalism About how ideal and material interests drive people s actions Religious interests Economic interests Social Economics Economic analysis Economic phenomenon Economically relevant phenomenon Economically conditioned phenomenon Economics vs Economic sociology Economics pure economic action which is exclusively driven by economic interests Economic sociology social economic action or action that is driven by economic interests and oriented to other actors Economically oriented organizations o Economic organizations e g firms o Economically active organizations e g Church o Organizations which regulate economic activities e g Union o Organizations which police the economic system e g the laissez faire estate Emile Durkheim The division of Labor in Society Private interest vs General interest The social dimension of the division of labor how it helps to integrate society and make it cohesive by creating a multitude of dependencies Self interest and social balance o The contract is not sufficient by itself but it is only possible bc of the regulation of contracts which is social in origin Gemeinschaft and gesellschaft The individual will thrive because of the warmth that comes from being a member of a group corporation He believed that if economics were ever to become scientific it would have to become a branch of sociology Contrast economic men with real men Attacks economics for being non empirical the ideological tendency of economics Anomie absence of social norms you want to do something right but you don t know what that is Suicide for example does not have just an individual cause there usually is a social cause as well Kari Polanyi The key ideal of the neoclassical economic theory is not applicable to pre industrial societies The market is an outcome of a historical process driven by a social class rather than a natural institution which spontaneously arises from abiding characteristics of human nature o Market is created by human being it is not naturally created Our actions created the Market The Poor Law o Speenhamland Competition between the two below Parish farm land