Chapter 14: Capitalism and the Economy

Family Wage

a wage period to make workers sufficient to support a dependent wife and children.

Socialism

economic system in which most or all the needs of the population are met through non market methods of distribution.

Capitalism

economic system in which property and goods are primarily owned privately, investments are determined by private decisions, and prices, production, and the distribution of goods are determined primarily by competition in an unfettered marketplace.

Monopoly

form of business that occurs when one seller of a good/service dominates the market to the exclusion of others, potentially leading to 0 competition.

Agricultural Revolution

the period around 1700 marked by the introduction of new farming technologies that increased food output in farm production.

Income effect

the same higher wages that the opportunity cost of not working-the amount of earnings she is missing out on if she declines work opportunities.

Service Sector

the section of the economy that involves providing intangible services.

Champagne Glass Distribution

the unequal, global distribution of income, so named for its shape.

Limited Liability

form of ownership that creates a division between the individual-that is, the shareholder or executive-and the business entity. A legal way to protect investors from personal responsibility for any liabilities beyond the value of the company itself.

Fief

property of the lord but vassal reaped harvests from fief. In return, the vassal gave protection for the lord.

Lord

a nobleman who owned land.

Offshoring

a business decision to move all or part of a company's operations abroad to minimize costs.

Union Busting

a company's assault on its workers union with the hope of dissolving it.

Corporation

a legal entity unto itself that has a legal personhood distinct from that of its members, namely its owners and shareholders.

Union

an organization of workers designed to facilitate collective bargaining with employers.

Karl Marx

capitalism created alienation from: 1. the products that they produced 2. the production process 3. other workers 4. their species being, he said that capitalism would ultimately destroy itself, workers would rise against capitalists, leading to socialism then of communism.

Alienation

condition in which people are dominated by forces of their own creation that then confront them as alien powers; according to Marx, the basic state of being in a capitalism society.

Oligopoly

condition when a handful of firms effectively control a particular market.

Parceling out of the soul

people becomes alienated from any sense of right of wrong and from a human connection.

Serf

person bound to the land, gave lord protection, allowed to own property and could not be owned.

Vassal

person who granted the land.

Adam Smith

person who said that competition maintains cohesion, specializing increases productivity/innovation, a money and not barter system makes trading efficient.

Georg Simmel

person who said that piecework payment to wage labor depersonalizes workers, gives greater freedom to worker, separate public and private spheres, increased private life and leisure time.

Communism

political ideology of a classless society in which the means of production are shared through state ownership and in which rewards are tied not to productivity but to need.

Feudalism

pre capitalist economic system characterized by the presence of lords, vassals, serfs, and fiefs.