We have seen how the economies of some capitalist countries such as the United States have features that are very similar to socialism. Some industries, particularly utilities, are either owned by the government or controlled through regulations. Public programs such as welfare, Medicare, and Social Security exist to provide public funds for private needs. We have also seen how several large communist (or formerly communist) countries such as Russia, China, and Vietnam have moved from state-controlled socialism with central planning to market socialism, which allows market forces to dictate prices and wages, and for some business to be privately owned. In many formerly communist countries, these changes have led to economic growth compared to the stagnation they experienced under communism (Fidrmuc 2002).
In studying the economies of developing countries to see if they go through the same stages as previously developed nations did, sociologists have observed a pattern they call convergence. This describes the theory that societies move toward similarity over time as their economies develop.
Convergence theory explains that as a country's economy grows, its societal organisation changes to become more like that of an industrialised society. Rather than staying in one job for a lifetime, people begin to move from job to job as conditions improve and opportunities arise. This means the workforce needs continual training and retraining. Workers move from rural areas to cities as they become centres of economic activity, and the government takes a larger role in providing expanded public services (Kerr et al. 1960).
Supporters of the theory point to Germany, France, and Japan—countries that rapidly rebuilt their economies after World War II. They point out how, in the 1960s and 1970s, East Asian countries like Singapore, South Korea, and Taiwan converged with countries with developed economies. They are now considered developed countries themselves.
The theory is also known as the catch-up effect because the economies of poor countries that have capital invested in them will generally grow faster than countries that are already wealthy. This allows the income of poorer countries to "catch up" under the right conditions (“Catch-up Effect” 2011). To experience this rapid growth, the economies of developing countries must to be able to attract inexpensive capital to invest in new businesses and to improve traditionally low productivity. They need access to new, international markets for buying the goods. If these characteristics are not in place, then their economies cannot catch up. This is why the economies of some countries are diverging rather than converging (Abramovitz 1986).
Another key characteristic of economic growth regards the implementation of technology. A developing country can bypass some steps of implementing technology that other nations faced earlier. Television and telephone systems are a good example. While developed countries spent significant time and money establishing elabourate system infrastructures based on metal wires or fiber-optic cables, developing countries today can go directly to cell phone and satellite transmission with much less investment.
Another factor affects convergence concerning social structure. Early in their development, countries such as Brazil and Cuba had economies based on cash crops (coffee or sugarcane, for instance) grown on large plantations by unskilled workers. The elite ran the plantations and the government, with little interest in training and educating the populace for other endeavors. This retarded economic growth until the power of the wealthy plantation owners was challenged (Sokoloff and Engerman 2000). Improved economies generally lead to wider social improvement. Society benefits from improved educational systems, allowing people more time to devote to learning and leisure.
Now that we’ve developed an understanding of the history and basic components of economies, let’s turn to theory. How might social scientists study these topics? What questions do they ask? What theories do they develop to add to the body of sociological knowledge?
Someone taking a functional perspective will most likely view work and the economy as a well-oiled machine, designed for maximum efficiency. The Davis-Moore thesis, for example, suggests that some social stratification is a social necessity. The need for certain highly skilled positions combined with the relative difficulty of the occupation and the length of time it takes to qualify will result in a higher reward for that job, providing a financial motivation to engage in more education and a more difficult profession (Davis and Moore 1945). This theory can be used to explain the prestige and salaries that go to those with doctorates or medical degrees.
Like any theory, this is subject to criticism. For example, the thesis fails to take into account the many people who spend years on their education only to pursue work at a lower-paying position in a nonprofit organization, or who teach high school after pursuing a PhD. It also fails to acknowledge the effect of life changes and social networks on individual opportunities.
The functionalist perspective would assume that the continued health of the economy is vital to the health of the nation, as it ensures the distribution of goods and services. For example, we need food to travel from farms (high-functioning and efficient agricultural systems) via roads (safe and effective trucking and rail routes) to urban centres (high-density areas where workers can gather). However, sometimes a dysfunction––a function with the potential to disrupt social institutions or organisation (Merton 1968)––in the economy occurs, usually because some institutions fail to adapt quickly enough to changing social conditions. This lesson has been driven home recently with the bursting of the housing bubble. Due to irresponsible lending practices and an underregulated financial market, we are currently living with the after-effects of a major dysfunction.
Some of this is cyclical. Markets produce goods as they are supposed to, but eventually the market is saturated and the supply of goods exceeds the demands. Typically the market goes through phases of surplus, or excess, inflation, where the money in your pocket today buys less than it did yesterday, and recession, which occurs when there are two or more consecutive quarters of economic decline. The functionalist would say to let market forces fluctuate in a cycle through these stages. In reality, to control the risk of an economic depression (a sustained recession across several economic sectors), the
U.S. government will often adjust interest rates to encourage more spending. In short, letting the natural cycle fluctuate is not a gamble most governments are willing to take.
For a conflict perspective theorist, the economy is not a source of stability for society. Instead, the economy reflects and reproduces economic inequality, particularly in a capitalist marketplace. The conflict perspective is classically Marxist, with the bourgeoisie (ruling class) accumulating wealth and power by exploiting the proletariat (workers), and regulating those who cannot work (the aged, the infirm) into the great mass of unemployed (Marx and Engels 1848). From the symbolic (though probably made up) statement of Marie Antoinette, who purportedly said “Let them eat cake” when told that the peasants were starving, to the Occupy Wall Street movement, the sense of inequity is almost unchanged. Both the people fighting in the French Revolution and those blogging from Zuccotti Park believe the same thing: wealth is concentrated in the hands of those who do not deserve it. As of 2007, 20 percent of Americans owned 80 percent of U.S. wealth (Domhoff 2011). While the inequality might not be as extreme as in pre-revolutionary France, it is enough to make many believe that the United States is not the meritocracy it seems to be.
Symbolic Interactionist Perspective
Those working in the symbolic interaction perspective take a microanalytical view of society, focusing on the way reality is socially constructed through day-to-day interaction and how society is composed of people communicating based on a shared understanding of symbols.
One important symbolic interactionist concept related to work and the economy is career inheritance. This concept means simply that children tend to enter the same or similar occupation as their parents, a correlation that has been demonstrated in research studies (Antony 1998). For example, the children of police officers learn the norms and values that will help them succeed in law enforcement, and since they have a model career path to follow, they may find law enforcement even more attractive. Related to career inheritance is career socialisation, learning the norms and values of a particular job.
Finally, a symbolic interactionist might study what contributes to job satisfaction. Melving Kohn and his fellow researchers (1990) determined that workers were most likely to be happy when they believed they controlled some part of their work, when they felt they were part of the decision-making processes associated with their work, when they have freedom from surveillance, and when they felt integral to the outcome of their work. Sunyal, Sunyal, and Yasin (2011) found that a greater sense of vulnerability to stress, the more stress experienced by a worker, and a greater amount of perceived risk consistently predicted a lower worker job satisfaction.
Log in to save your progress and obtain a certificate in Alison’s free Sociology Studies - Social Institutions online course
Sign up to save your progress and obtain a certificate in Alison’s free Sociology Studies - Social Institutions online course
Please enter you email address and we will mail you a link to reset your password.