ECONOMY & WORK

Instructor: Dr. T. Sebeelo

 THE ECONOMY:
HISTORICAL OVERVIEW
Economy: A social institution that organizes a society’s production, distribution,
and consumption of goods and services.
 Agricultural revolution---Led to dramatic expansion of the economy due to:
1. Agric. Technology
2. Productive specialization
3. Permanent settlements
4. Trade
 Industrial revolution---Industrialization changed the economy in 5 ways: New
forms of energy, centralization of work in factories, manufacturing and mass
production, specialization and wage labor.
ECONOMIC INSTITUTION
3 major types of economic systems: Pre-industrial, Industrial and post-
industrial economic systems
Pre-industrial Economic systems
 Characteristic of simple societies.
 Production units & settlements are small and widely dispersed.
 Major energy sources are human and animal power.
 Vast majority of the labor force is engaged in primary production; extract
raw materials from the environment. E.g. Farming, Herding, hunting and
mining.
 INDUSTRIAL ECONOMIC
STRUCTURES
Characterized by:
 Large and bureaucratically organized work units.
 Reliance on new sources of energy (gasoline, electricity, coal and steam) rather
than muscle power.
 Shift to secondary production or the processing of raw materials---leads to
surplus (better health, educ & standards of living).
 Might lead to –ve changes: Population growth, assault on the environment,
growth of cities etc
 POST INDUSTRIAL
ECONOMIC STRUCTURES
Refers to a productive system based on service work and extensive use of
information technology.
 Concerned with the production of information & services (tertiary
production).
 Occupations within tertiary sector include physicians, schoolteachers,
police, computer programmers etc.
 Information revolution has transformed the world since the 1950’s: From
tangible products to ideas, Mechanical skills to literacy skills, Factories to
almost anywhere.
SECTORS OF THE ECONOMY
 Primary sector: Part of the economy that generates raw materials directly
from the natural environment.
 Secondary sector: Transforms raw materials into manufactured goods
 Tertiary sector: Involved in services rather than goods.
GLOBAL ECONOMY
 Recent emergence of the global economy that expands economic activity across all territories
of the world.
 Global division of labor. Each region specializes in specific economic activity.
 US, Canada, Western Europe, Australia & Japan perform mainly service work.
 More products pass through the economies of more than one nation.
 Governments struggle to fully control the economic activity that takes place within their
borders.
 A small number of businesses control the vast share of the world’s economic activities.
EXAMPLES OF BIG
CORPORATIONS
 COMPARATIVE ECONOMIC
SYSTEM: PATHS TO JUSTICE
 Modern world characterized by two types of economic systems: Capitalism and Socialism.
 CAPITALISM: An economic system in which natural resources (and the means of
production) are privately owned. Owners use these resources for their own gain.
Has some characteristics:
 Private ownership of property
 Pursuit of personal profit.
 (Free) competition and consumer sovereignty (choice)

Major drawbacks: Neglects aspects of distribution. Those with nothing to exchange are left
outside the marker. Pure capitalism does not provide for public goods. E.g. sewers, streets,
defense etc
 SOCIALISM
 An economic system in which productive tools (e.g. land) and the means of producing goods
and services (labor and capital) are collectively owned & used for the collective good.
Has some characteristics
 Collective ownership of property
 Pursuit of collective good.
 Government control of the economy.

Some advantages:
 Central planning
 Equitable resource distribution
 RELATIVE ADV. OF
CAPITALISM & SOCIALISM
 Capitalist societies considerably more economically productive.
 Socialist societies display considerably less income and wealth disparity.
 Statistics and data not enough to compare overall well-being in either system.
 Capitalist characterized by more civil liberties & political freedom.
OTHER ECONOMIC
SYSTEMS
 Communism: All members of society are socially equal. No society has achieved true
communism.
 Democratic Socialism: Economic and political system that combines significant government
control of the economy with free elections. Found in some European countries.
 State Capitalism: Economic and political system in which companies are privately owned by
cooperate closely with the government.
 Welfare Capitalism: Economic and political system that combines a mostly market-based
economy with extensive social welfare programs. Found in some European nations.
 WORK IN THE POST-
INDUSTRIAL ECONOMY
 Accompanied by a transformation from agric to factory then service work.
 This manifests in dual labor market: Primary and Secondary Labor Market

Primary Labor Market

 Occupations that provide extensive benefits to workers. E.g. White collar professions and high
mgt positions.
 Employment characterized by:

1. High income/pay
2. Personally/challenging and intrinsically satisfying jobs.
3. Job security
4. Internal labor markets (career paths/promotional or ladders)
SECONDARY LABOR
MARKET
 Jobs providing minimal benefits to workers.
 Jobs mainly blue-collar requiring low skills.
 Some are low-level white-collar jobs. e.g. clerical positions.

Employment characterized by:

1. Low pay
2. Lack of job security
3. Dead-end jobs-no promotional opportunities
4. Alienating and dissatisfying jobs which are also routinized.
Most jobs in the post-industrial economy fall within the secondary labor market.
LABOR MARKET…..
 Decline in agricultural work in the US. Family farms replaced by corporate
agribusiness.
 Move from factory to service work.
 Labor Unions: Organizations of workers who seek to improve wages and
working conditions through negotiations and strikes.
 US unions not as strong as in other advanced societies. In Botswana, unionism
is strong and has shown tremendous growth in recent years.
PROFESSIONS
Display the following characteristics:
 Theoretical knowledge
 Self-regulated practice.
 Authority over clients.
 Community orientation over self-interest. Underemployment and Unemployment major
problems in postindustrial societies.
 Underground Economy: Economic activity involving income that one does not report to the
government as required by law.
COMPUTERS & WORK
 Computers deskilling labor.
 Making work more abstract.
 Limits workplace interaction.
 Increase employer’s control of workers.
 Allows companies to relocate work.
CORPORATIONS
Corporations lies at the core of today’s capitalist economy.
Corporation: An organization with a legal existence, including rights and liabilities, apart from
those of their mentors.
 Corporate economy highly concentrated, with few large firms holding most assets and earning
most of the profits.
 Conglomerates: Giant corporations composed of many smaller corporations.
 An interlocking directorate: social network of people who serve simultaneously on boards of
directors of many corporations
 Monopoly: The illegal domination of market by a single producer.
 Oligopoly: Domination of market by a few producers. Very common.
 TRANSFORMATION OF
AFRICAN ECONOMIES
 Colonization central to understanding African economies.
 Colonization: Led to the emergence of new economic and political structures with significant
impact.
Economic structuring of African countries involved:
 Transformation from traditional to capitalist modes of production.

New economies had characterized by:

 Narrow economic bases: Economies relied on single commodity (monoculture).
 Specialization in the export of raw materials for processing in industries based in Europe and
North America.
GLOBAL & REGIONAL INTEGRATION
OF AFRICAN ECONOMIES
 African economies linked with the industrialized West. Provides cheap raw materials.
 Neocolonialism: a process where former colonizers protect their economic and strategic
interests.
 World evolved in a “global village” with a common market (world market).
 World market not equal. Rich nations (former colonial powers) enjoy comparative advantages
over poor countries.
 Economically powerful countries control the pricing of commodities and general terms of
trade.
 Exploitation of the poor by rich countries. “Core” vs “Periphery”
 Aligns with dependency theory. Andrea Gunder Frank.
MULTINATIONALIZATION
 Process whereby huge capitalist corporations extend their marketing and processing efforts
throughout the world.
 Seek to tap into profits, take advantage of cheap labor, lack of environmental & other
regulations in developing countries.
 Limited economic benefits for developing countries. Exploitative process.

Colonization, Global economy and multinationalization led to:

 Dwindling national incomes, Unemployment
 Rising indebtedness, Poor health, hunger/starvation
 Economic marginalization, Poverty and misery
 Declining provision of social and welfare services, Political instabilities (ethnic/civil wars,
military coups).
THE BOTSWANA CASE
 Attained self-government in 1965 & became a republic in 1966 as one of the poorest Africa
countries.
 Economy dominated by subsistence agriculture.
 British never physically settled in Botswana hence was subjected to indirect rule.
 Botswana achieved independence without any meaningful social overhead capital which the
country could build a strong economy.
 Discovery of diamonds in the late 60’s and 70’s changed the economic fortunes of the country.
Stimulated infrastructural development.
 Mining sector has dominated the economic of Botswana since the 70’s.
 Highest growth rate in the world between 1965-1999, 7% per annum.
BOTSWANA…
 Post-colonial economic development based on export of unprocessed products. “Colonial
legacy”
 Exports raw diamonds valued at $1.3 billion/annum.
 Economy heavily dependent on the global and regional economies to absorb its products.
 South Africa is Botswana’s major trading partner. Relies on RSA for imports, investments &
technical skills.
 Economic challenges in RSA have ripple effects on Botswana.
BOTSWANA….
 Generally perceived as a success story by African standards. “African Miracle”. Acemoglu
and Robinson (2001), Samatar (1999), Holm (1994), Beaulier (2003), Hillbom (2008),
 Hailed as a model country in Africa with good governance and institutions.
 Usually ranks high in international ratings. E.g. Corruption Index, Legatum Prosperity Index.
 Some scholars contest notions of “success” in Botswana. Good (1994, 1996, 2008, 2017),
Taylor (2006), Mogalakwe and Nyamnjoh (2017), Mogalakwe (2008).
 Recent events show a high unemployment rates, elite corruption, inequality, HIV/AIDS,
poverty and crime.