Question

This chapter states that global economic inequality has personal relevance and importance to people in advanced, affluent economies. Briefly review this argument. Explain whether you were persuaded by it, or not.

Answer 1

• Evaluating Global Theories of Inequality

  • Occupy Wall Street protesters approach inequality from a social justice perspective that holds that all Americans deserve equal life chances and have been denied them by market-oriented approaches to economic regulation (or lack thereof).
  • Occupy Wall Street protesters approach inequality from a social justice perspective that holds that all Americans deserve equal life chances and have been denied them by market-oriented approaches to economic regulation (or lack thereof).
  • Functionalists are likely to embrace market-oriented approaches to inequality, on the basis that a free market will result in prices that benefit the smooth-functioning and growth of economies.
  • These thinkers are likely to support state-oriented approaches to regulating inequality, with governments instating policies to equally distribute opportunities and resources.
  • Whatever sociological theory one adopts to explain the existence of inequality, not all theorists consider inequality to be a problem that needs correction.

• Market-Oriented Theories

  • Market-oriented theories of inequality argue that supply and demand will regulate prices and wages and stabilize inequality.
  • According to market-oriented theories of inequality, the low wage earned by seasonal agricultural laborers will encourage members of the labor pool to acquire other skills, which in term will raise the wage earned by agricultural laborers.
  • Market-oriented theories of inequality are focused on the laws of the free market.
  • According to market-oriented theories, over time the low wages earned by agricultural laborers will induce more people to learn other skills, thus reducing the pool of agricultural laborers.
  • Generally, market-oriented theories hold that when supply of labor and goods meets demand, the economic order will reach equilibrium, and inequality will either be non-existent or will be stable.

• Global Trade: Inequalities and Conflict

  • For centuries, governments restricted international trade based on the principles of mercantilism, which maintained that countries were all competing to maximize their stores of gold.
  • Following a free trade orientation, governments do not discriminate against imports by imposing tariffs or promoting exports with subsides.
  • Economic arguments against free trade criticize the assumptions or conclusions ofeconomic theories.
  • Free trade may favor developing nations in certain areas, may benefit only the wealthy within countries, may increase offshoring, and may destabilize financial markets.
  • Analyze the impact of global trade on society and industry, ranging from mercantilism to free trade orientation

• Production Orientation

  • Production orientation follows the premise that any product of high quality can be readily sold.
  • In the decades since its introduction, marketing orientation has been the model of choice for brands looking to sell products that compete effectively for consumer attention and brand loyalty.
  • Marketing - spreading the cost of advertising over a greater range of output in media markets
  • Jean-baptiste Say was the popularizer, but not originator, of the economic theory, Say's Law.
  • Demonstrate the characteristics of production orientation from an economic and marketing perspective

• Preindustrial Societies: The Birth of Inequality

  • Instead of producing crops for a market, workers exchanged the crops they grew for access to land, which was owned by a feudal lord.
  • The economy was based on the exchange of labor for land instead of the exchange of wages for labor that is typical in industrial society.
  • In general, pre-industrial societies share certain social attributes and forms ofpolitical and cultural organization, including limited production, a predominantly agricultural economy, limited division of labor, limited variation of social class, and parochialism at large.
  • Manorialism was widely practiced in medieval western and parts of central Europe, until it was slowly replaced by the advent of a money-based marketeconomy and new forms of agrarian contract.
  • This painting from feudal time shows how fields surrounded the feudal manor where the noble who owned the farms lived--a good depiction of how society was oriented around the agricultural economy.

• State-Centered Theories

  • According to state-centered theories of inequality, the government should regulate the distribution of resources to protect workers.
  • The laissez-faire era of United States economic history, which occurred around the turn of the 20th century—when the government generally left the economy unregulated—reflects a belief in market-driven theories of inequality.
  • In contrast to market-oriented theories of inequality, state-centered theoriesdo not assert that the capitalist free-market will naturally regulate prices and wages.
  • State-centered theories of inequality critique market-driven ones on the basis that capitalists embroiled in the free-market will act to increase their own wealth, exploiting the lower classes.
  • This map of all states to declare themselves officially socialist at some point in history illustrates the spread of state-centered theories of inequality.

• Social Marketing

  • Social marketing is the systematic application of marketing to achieve specific behavioral goals for a social good.
  • Social marketing has similar characteristics to marketing orientation but with the added proviso that there will be a curtailment of any harmful activities to society, in either product, production, or selling methods.
  • Social marketing theory and practice has been progressed in several countries such as the US, Canada, Australia, New Zealand and the UK, and in the latter a number of key Government policy papers have adopted a strategic social marketing approach.
  • The marketing of sustainable ideals has come to the forefront of social marketing in recent years.
  • Define the concept of social marketing, its application and impact on society

• Addressing Market Needs

  • This influence is a major study of economics and has given rise to several theories and models concerning the basic market forces of supply and demand .
  • There are two roles in markets, that of a buyer and that of a seller.
  • Many companies today have a customer focus (or market orientation).
  • Market trends are the upward or downward movement of a market during a period of time.
  • As an example of a process of addressing market needs, imagine the release of a new film.

• Global Inequality

  • Social scientists offer a few theories which help to explain the causes and consequences of global inequality.
  • This theory blames tradition for global poverty.
  • This theory blames colonialism and neocolonialism (continuing economic dependence on former colonial countries) for global poverty.
  • This theory, similar to dependency theory, suggests that wealthy countries benefit from other countries and also exploit their citizens.
  • They can also set the prices for the agricultural products that peripheral countries export regardless of market prices, forcing small farmers to abandon their fields because they can't afford to pay the labor and fertilizer.

• Microeconomics

  • One of the ways that the economic units interact is through market exchange.
  • Since market transactions are observable and quantifiable, microeconomics tends to focus on competition in the context of market exchange.
  • Orthodox microeconomic theory can be thought of as a set of "tools," as a perspective or as a way of thinking.
  • As a set of tools, economic theory can be envisioned as a road map.
  • The focus tends to be market oriented and exchange is emphasized.