Economy and Society
All societies are organized around an economic base. The economy of a society is
the system by which goods and services are produced, distributed, and consumed.
We first look at the economic significance of the historic transformation from
agriculturally based societies to industrial and now postindustrial societies.
Comparing Economic Systems
The three major economic systems found in the world today are
capitalism,
socialism,
and communism.
Many societies have a mix of these economic systems.
Capitalism is an economic system based on the principles of market
competition, private property, and the pursuit of profit. Within capitalist
societies, stockholders own corporations—or a share of the corporation’s
wealth. Under capitalism, owners keep a surplus of what is generated by the
economy; this is their profit, which may be in the form of money, financial
assets, and other commodities.
• Socialism is an economic institution characterized by state ownership
and management of the basic industries; that is, the means of
production are the property of the state not of individuals. Modern
socialism emerged from the writings of Karl Marx, who predicted that
capitalism would give way to egalitarian, state-dominated socialism,
followed by a transition to stateless, classless communism.
• Many European nations, for example, have strong elements of socialism that
mix with the global forces of capitalism.
• Sweden supports an extensive array of state-run social services, such as health
care, education, and social welfare programs, but Swedish industry is capitalist.
Other world nations are more strongly socialist, although they are not immune
from the penetrating influence of capitalism.
• The People’s Republic of China was formerly a strongly socialist society that is
currently undergoing transformation to a mix of socialist and capitalist
principles, including state encouragement of a market-based economy, the
introduction of privately owned industries, and increased engagement in the
international capitalist economy.
• Communism is sometimes described as socialism in its purest form. In
pure communism, industry is not the private property of owners.
Instead, the state is the sole owner of the systems of production.
Communist philosophy argues that capitalism is fundamentally unjust
because powerful owners take more from laborers (and society) than
they give and use their power to maintain the inequalities between
the worker and owner classes. Communist theorists in the nineteenth
century declared that capitalism would inevitably be overthrown as
workers worldwide united against owners and the system that
exploited them. Class divisions were supposed to be erased at that
time, along with private property and all forms of inequality. History
has not borne out these predictions.
Lenski’s Sociocultural Evolution Approach
Sociologist Gerhard Lenski takes a very different view of society and
social structure. In Lenski’s view, a society’s level of technology is
critical to the way it is organized. Lenski defines technology as “cultural
information about the ways in which the material resources of the
environment may be used to satisfy human needs and desires” (Nolan
and Lenski 2009:357). As technology advances, Lenski writes, a
community evolves from a preindustrial to an industrial and finally a
postindustrial society.
Society Based on Technology
