SOC 220 Week 6 Discussion 1

SOC 220 Week 6 Discussion 1


In economic terms the word “class” refers to people who share a similar standard of living, in that all members of the class are generally able to achieve a certain level of material well-being with little or no modification to their way of life. This general definition of class is common in both capitalist and socialist economies due to the fact that a large portion of each nation’s population has at least a minimal standard of living. This minimal standard of living is what sets the classes apart from one another, based on certain factors that each class must address within its own unique role in society. The capitalist classes are made up of investors, industrialists, professionals and merchants whereas the lower classes are composed of the proletariat and peasant farmers. A socialist economy separates its classes into the social classes: menial workers, intellectuals and bourgeoisie while a mixed-economy uses an economic system that combines different parts from each economic structure in order to sustain itself as a whole. Although there are some exceptions amongst these three systems, for the most part it is agreed upon that there are distinct class boundaries among all three economic structures. Economic conditions also contribute to class stratification.

Capitalism, socialism and mixed economies are economic systems often considered in debates on the economic benefits of capitalism. Understanding the differences in these economic systems may shed light into the effects they have on classes of people within a nation or a region.

There are many types of economies in the world. An economy is a study of how goods are produced and distributed throughout a society. The main types of economies are capitalism, socialism and mixed. Capitalism is an economy where the means for producing goods is owned by private companies instead of the government. Socialism is an economy where the means for producing goods such as farms, factories and businesses are totally controlled by the government. Mixed economies have aspects of both capitalist and socialist economies. For example, one country may have a large government that operates a huge variety of businesses, but small shops may still be privately owned.

Capitalist economies are based on private ownership of the means of production and distribution. This is a highly unequal society, with a small proportion of the population that owns most of the resources. This leads to social stratification, where some people in society have much more power and wealth and more opportunities to advance in life than others, which often leads to conflicts between social classes.

A good example of a question like this would be the recent Global Economy questions that the AP Economics exam has had. These are mainly based on classifying different economic systems and the strengths and weaknesses of those systems, with some influence from political ideologies. This is an important type of question because it doesn’t have as much to do with basic macroeconomics principles, but more to do with what you understand about how they work. In addition, AP Macroeconomics exams always give room for speeches, which are often cited as one of students’ least favorite things to write in AP classes.

Capitalist economies are based on the principle of private ownership of resources and goods, with distribution based on a system of supply and demand. In capitalist economies, goods and services can be owned by both private individuals or businesses.

A mixed economy is one where the economic activities are guided by both private and public sectors. This multi-sectoral economic system is characterized by a blend of capitalist, socialistic and mercantile elements. Economic performance of mixed economies depends primarily on the degree to which it is socially regulated. Countries that pursue a mixed economy strategy generally accept greater government intervention in the economy but focus primarily on public administration of services like education, transport and health while making little or no attempt to control wages and prices in the market sector.

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Under Capitalism – People work for money – Money is used to make more money – Corporations and the rich are getting richer .

For the past several years, the world has experienced a period of economic instability commonly known as the Great Recession.

According to Giddens, (2002: 55-56) a modern economy is one that is based on the following factors: division of labour and specialisation, market forces, rational allocation of income through interest rates, laws and customs which ensure economic growth and a degree of cooperation among groups





What are characteristics, strengths and weaknesses of capitalist economies? Socialist economies? Mixed economies? Explain how economic conditions contribute to class stratification.

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