DOCSLIB.ORG

Comparative Analysis of Labour Market Inequality in Brazil and India: Concepts and Methods of Analysis

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Comparative Analysis of Labour Market Inequality in Brazil and India: Concepts and Methods of Analysis Comparative analysis of labour market inequality in Brazil and India: Concepts and methods of analysis By Alexandre de Freitas Barbosa, Maria Cristina Cacciamali, Ashok Pankaj, Gerry Rodgers and Vidhya Soundararajan Project Paper B September 1, 2013 Working Paper Series No. 4/2014 IDRC Project number 106919-002 (Institute for Human Development, New Delhi, India) IDRC Project number 106919-001 (Cebrap, Sao Paulo, Brazil) IDRC Project title: Labour Market Inequality in Brazil and India Institute for Human Development, NIDM Building, IIPA Campus, IP Estate, New Delhi 110002 Centro Brasileiro Análise Planejamento Cebrap, R. Morgado de Mateus, 615, São Paulo - SP, 04015-051, Brazil Contact: [email protected]; [email protected] This report is presented as received from project recipent(s). It has not been subjected to peer review or other review processes. This work is used with the permission of Institute for Human Development/Cebrap, New Delhi/Sao Paulo. Copyright 2014, Institute for Human Development/Cebrap. Abstract In many parts of the world there has been a growth in economic inequality in recent years. High levels of inequality not only undermine efforts to reduce poverty and promote a general increase in living standards; they also raise questions of social justice, of social solidarity, of the role of public policy and of the acceptability of economic systems. Brazil and India have different histories with respect to economic inequality. The difference in trends in inequality between these two countries is of considerable interest for both research and policy. Among the reasons, patterns of work and employment play an important role – differential access to jobs, inclusive or exclusionary labour market institutions, differences in wages and wage shares, patterns of organization and industrial relations. But the relationships are complex and are embedded in the histories and social structures of each country. This paper explores the historical patterns in the two countries and their consequences for inequality over time, and the characteristics and determinants of inequality between different groups of the population in more recent periods. The paper examines specific dimensions of inequality, in terms of gender, caste, education, region, occupation and other factors relevant in the labour market and analyses studies the economic and social relationships that are responsible for these cleavages. 1 Keywords: economic transformation, economic and social institutions, inequality, state policies, formal and informal institutions, historical framework 2 CEBRAP-IHD research project on labour market inequality in Brazil and India Project paper B Comparative analysis of labour market inequality in Brazil and India: Concepts and methods of analysis Version 1.0. September 1, 2013. Not for circulation In many parts of the world there has been a growth in economic inequality in recent years. High levels of inequality not only undermine efforts to reduce poverty and promote a general increase in living standards; they also raise questions of social justice, of social solidarity, of the role of public policy and of the acceptability of economic systems. This CEBRAP-IHD project on labour market inequality is investigating these issues in India and Brazil in a comparative framework. Brazil and India have different histories with respect to economic inequality. Brazil has long been one of the most unequal countries in the world, and remains so today, despite some success in reducing inequality in recent years. Inequality in India, although deeply rooted, was lower than Brazil’s in the past, but has been rising rapidly. This difference in trends in inequality between these two countries is of considerable interest for both research and policy. Among the reasons, patterns of work and employment play an important role – differential access to jobs, inclusive or exclusionary labour market institutions, differences in wages and wage shares, patterns of organization and industrial relations. But the relationships are complex and are embedded in the histories and social structures of each country. The project will explore both the historical patterns in the two countries and their consequences for inequality over time, and the characteristics and determinants of inequality between different groups of the population in more recent periods. The present paper considers the conceptual and methodological issues that need to be addressed in this project, and suggests research methods that can be applied. • The first section considers concepts of inequality, with particular reference to its labour market dimensions. It looks at how inequality has been conceived and analysed in the past, and the main perspectives that are in common use today. And it considers some of the principal forms of inequality found in the labour market • The second section puts the analysis of inequality in historical context. Its main aim is to set the theoretical frame for the analysis of inequality in the process of economic transformation, by examining the relevance of existing literatures on development and change • The third section examines the main specific dimensions of inequality, in terms of gender, caste, education, region, occupation and other factors relevant in the labour market. It looks into the economic and social relationships that are responsible for these cleavages • The fourth section considers the effects of a range of social institutions and state policies on inequality. Both formal and informal institutions are considered, and both policies that aim to directly change labour market outcomes, and the indirect effects of wider economic and social interventions 3 • The fifth section explores the statistical and quantitative tools that are available for the analysis of inequality, principally in cross-section. It considers alternative decomposition methods as well as the construction of causal regression models. • The sixth and final section considers the role of dialogue with key social actors as part of the research design. This paper is jointly authored by Alexandre de Freitas Barbosa, Professor, University of São Paulo (USP) and Senior Researcher at CEBRAP, São Paulo; Maria Cristina Cacciamali, Professor, USP and Senior Researcher at CEBRAP; Ashok Pankaj, Senior Fellow, Institute for Human Development (IHD), New Delhi; Gerry Rodgers, Visiting Professor, IHD; and Vidhya Soundararajan, Visiting Research Associate, IHD, and includes contributions by Fabio Tatei, Rogerio Barbosa and Ian Prates, Research Assistants at CEBRAP, by Taniya Chakrabarty, Research Associate, IHD, and by J. Krishnamurty, Visiting Professor, IHD. The principal author of section I is Gerry Rodgers; of section II, Alexandre Barbosa; of section III, Maria Cristina Cacciamali; of section IV, Ashok Pankaj; of section V, Vidhya Soundararajan. 4 I. Conceptualizing inequality and its labour market dimensions 1. Why inequality? Amartya Sen starts his book on “Inequality re-examined” (Sen, 1992) with two interdependent questions: Why inequality? And inequality of what? We have to answer the same questions in the project on labour market inequality in Brazil and India. Why is inequality a concern? There are many possible answers, of course. The principle of equality is embedded in much political discourse, and many would regard it as an ethical imperative. There are also much more pragmatic approaches, so that some would consider equality as a sort of welfare optimum, for if the value at the margin of whatever metric we are interested in, a measure of satisfaction or utility for instance, declines as you have more of it, then the sum total of welfare is maximized when all have the same. But even without a belief in the desirability of perfect equality, inequality may be a concern if it reaches unacceptable levels. Societies may readily accept that some have more than others, and find all sorts of legitimate reasons why this may be justified, but refuse to accept that some can have enormously more than others. So there is outrage today when we discover that the chief executives of large companies are paid hundreds of times more than the workers in the enterprises that they manage; but if they are paid 10 or 20 times, the opposition is much more muted. These are subjective perspectives, which sometimes seem arbitrary. Some societies are much more at ease with high levels of inequality, which they justify in terms of effort or personal worth, than others – the United States versus Sweden for instance. In the end the notion of fairness, or perhaps of social justice, may be more compelling as a general principle than the notion of equality. But as the preceding paragraph makes clear, in posing the question, “why inequality?”, we are already embarking on the question, “inequality of what?”. Because there are many different spaces within which equality can be defined or sought. And the extent to which inequality is a concern depends to a large extent on what it is that is unequally distributed. There is a tendency for the discourse on inequality to be dominated by notions of living standards, in the sense of incomes or consumption levels. But of course equality can also refer to health or education, to public services, to employment opportunities, to democratic participation, to citizenship, to rights and freedoms and to many other domains. What is more, equality in one dimension may be incompatible with equality in another. Thus the liberty of enterprise, if it is shared by all, may well be
Load more

Recommended publications
  • Mnes and CLIMATE CHANGE
    UvA-DARE (Digital Academic Repository) Multinational enterprises and climate change: exploring institutional failures and embeddedness Pinkse, J.; Kolk, A. DOI 10.1057/jibs.2011.56 Publication date 2012 Document Version Submitted manuscript Published in Journal of International Business Studies Link to publication Citation for published version (APA): Pinkse, J., & Kolk, A. (2012). Multinational enterprises and climate change: exploring institutional failures and embeddedness. Journal of International Business Studies, 43(3), 332-341. https://doi.org/10.1057/jibs.2011.56 General rights It is not permitted to download or to forward/distribute the text or part of it without the consent of the author(s) and/or copyright holder(s), other than for strictly personal, individual use, unless the work is under an open content license (like Creative Commons). Disclaimer/Complaints regulations If you believe that digital publication of certain material infringes any of your rights or (privacy) interests, please let the Library know, stating your reasons. In case of a legitimate complaint, the Library will make the material inaccessible and/or remove it from the website. Please Ask the Library: https://uba.uva.nl/en/contact, or a letter to: Library of the University of Amsterdam, Secretariat, Singel 425, 1012 WP Amsterdam, The Netherlands. You will be contacted as soon as possible. UvA-DARE is a service provided by the library of the University of Amsterdam (https://dare.uva.nl) Download date:25 Sep 2021 MNE S AND CLIMATE CHANGE : EXPLORING INSTITUTIONAL FAILURES AND EMBEDDEDNESS JONATAN PINKSE * & ANS KOLK ** * Grenoble Ecole de Management, France & University of Amsterdam Business School, The Netherlands ** University of Amsterdam Business School, The Netherlands Both authors contributed equally to this paper Journal of International Business Studies , forthcoming ABSTRACT This paper explores how climate change affects MNEs, focusing on the challenges they face in overcoming liabilities and filling institutional voids related to the issue.
    [Show full text]
  • Introduction
    INTRODUCTION n 1984 the American Economics Association sent a delegation of Ieconomists to the Soviet Union for scientific discussion with So- viet economists. It was the final meeting in a series of cultural ex- changes at a time when the Cold War was heating up. The trip was made in summer, but in terms of intellectual discourse, Moscow was as cold and dark as Mordor. At lunch the head of the Soviet delegation reminded us that the Soviet Union had enough nuclear weapons to destroy the United States many times over, including President Reagan’s Hollywood and Disneyland. My job was to talk about the U.S. labor market. I criticized the United States for rising inequality; unemployment that had hit dou- ble digits in the 1981 recession; declining unionization; reduced company provision of defined-benefit pensions; the stalled advance of black Americans; limited gains in earnings for women; and slow productivity and real wage growth. I saw the United States as losing ground to other advanced economies. Japan, whose labor market and economic institutions were very different from those in the United States, was challenging American firms in automobiles, steel, and high-tech. Advanced Europe, which also had very differ- ent institutions, had adjusted better to the 1970s oil shock. My biggest concern was that the distribution of earnings in the United States was bifurcating. There were more jobs and higher pay at the top of the earnings distribution and also at the bottom of the earnings distribution. The result was fewer middle-class workers. The average hourly earnings of the production and nonsupervisory workers who made up most of the U.S.
    [Show full text]
  • Integration of Non-Market and Market Activities in Cross-Border Mergers and Acquisitions
    This is a repository copy of Integration of Non-market and Market Activities in Cross-border Mergers and Acquisitions. White Rose Research Online URL for this paper: http://eprints.whiterose.ac.uk/124369/ Version: Accepted Version Article: Ahammad, MF orcid.org/0000-0003-0271-2223, Tarba, SY, Frynas, JG et al. (1 more author) (2017) Integration of Non-market and Market Activities in Cross-border Mergers and Acquisitions. British Journal of Management, 28 (4). pp. 629-648. ISSN 1045-3172 https://doi.org/10.1111/1467-8551.12228 © 2017 British Academy of Management. This is the peer reviewed version of the following article: Ahammad, M. F., Tarba, S. Y., Frynas, J. G. and Scola, A. (2017), Integration of Non-market and Market Activities in Cross-border Mergers and Acquisitions. Brit J Manage, 28: 629–648., which has been published in final form at https://doi.org/10.1111/1467-8551.12228. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving. Reuse Items deposited in White Rose Research Online are protected by copyright, with all rights reserved unless indicated otherwise. They may be downloaded and/or printed for private study, or other acts as permitted by national copyright laws. The publisher or other rights holders may allow further reproduction and re-use of the full text version. This is indicated by the licence information on the White Rose Research Online record for the item. Takedown If you consider content in White Rose Research Online to be in breach of UK law, please notify us by emailing [email protected] including the URL of the record and the reason for the withdrawal request.
    [Show full text]
  • Aligning for Advantage
    Aligning for Advantage Competitive Strategies for the Political and Social Arenas Thomas C. Lawton, Jonathan P. Doh, and Tazeeb Rajwani 1 1 Great Clarendon Street, Oxford, OX2 6DP, United Kingdom Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide. Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries © Thomas C. Lawton, Jonathan P. Doh, and Tazeeb Rajwani 2014 The moral rights of the authors have been asserted First Edition published in 2014 Impression: 1 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by licence or under terms agreed with the appropriate reprographics rights organization. Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this work in any other form and you must impose this same condition on any acquirer Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016, United States of America British Library Cataloguing in Publication Data Data available Library of Congress Control Number: 2013954175 ISBN 978–0–19–960474–6 (hbk.) ISBN 978–0–19–960475–3 (pbk.) Printed and bound in Great Britain by CPI Group (UK) Ltd, Croydon, CR0 4YY Links to third party websites are provided by Oxford in good faith and for information only.
    [Show full text]
  • * O U F S O B U J P O B M + P V S O B M P G
    6OJWFSTJUZPGUIF5IBJ$IBNCFSPG$PNNFSDF 5IBJMBOE *O UIF 5IBJ $IBNCFS PG $PNNFSDF GPVOEFE B OPOQSPÜU FEVDBUJPO JOTUJUVUJPO DBMMFE UIF $PMMFHF PG $PNNFSDF UP QSPEVDF HSBEVBUFT JO UIF CVTJOFTT ÜFME "GUFS UIF PVUCSFBL PG 8PSME *44/ 65$$ 8BS**JO UIJTJOTUJUVUJPOXBTDMPTFE*O UIF$PMMFHFXBTSFPQFOFE BOEUIFUXPZFBS *OUFSOBUJPOBM+PVSOBMPG DVSSJDVMVNXBTEFWFMPQFEJOUPBTUBOEBSEGPVSZFBSJO*O JUXBTPGÜDJBMMZBDDSFEJUFE VOEFSUIF1SJWBUF$PMMFHF"DU*O UIJTJOTUJUVUJPOXBTBDDSFEJUFEBTBVOJWFSTJUZBOEUIFOBNF #VTJOFTT BOE &DPOPNJDT XBTDIBOHFEUPUIF6OJWFSTJUZPGUIF5IBJ$IBNCFSPG$PNNFSDF"UQSFTFOU UIF6OJWFSTJUZPGUIF 7PMVNF/VNCFS +VOF 5IBJ$IBNCFSPG$PNNFSDFQSPWJEFTVOEFSHSBEVBUFQSPHSBN5IF4DIPPMPG(SBEVBUF4UVEJFT 65$$*OUFSOBUJPOBM+PVSOBMPG#VTJOFTTBOE&DPOPNJDT *+#& JT SFTQPOTJCMF GPS HSBEVBUF QSPHSBNT BOE HSBEVBUF EJQMPNB QSPHSBN BOE UIF 4DIPPM PG #VTJOFTT"ENJOJTUSBUJPOJTSFTQPOTJCMFGPSDFSUJÜDBUJPOQSPHSBNT"MMQSPHSBNTBSFBQQSPWFECZ UIF.JOJTUSZPG6OJWFSTJUZ"GGBJST ● "RVBMJUBUJWFSFTFBSDIJOQIFOPNFOPMPHZNFUIPEPMPHZ 5IBJMBOE.BOBHFNFOU"TTPDJBUJPO %PFTHPPEDPSQPSBUFHPWFSOBODFFOIBODFUSBOTQBSFODZ PGJOGPSNBUJPOEJTDMPTVSF 5IBJMBOE.BOBHFNFOU"TTPDJBUJPO 5." JTBIJHIMZQSPGFTTJPOBMCPEZPGNBOBHFSTBOEFYFDVUJWFT "UUBXPPU1BQBOHLPSOBOE1IVTJU8POHMPSTBJDIPO GSPN BMM CSBODIFT PG CVTJOFTT JO 5IBJMBOE XIP BSF EFEJDBUFE UP TFFLJOH BOE USBOTGFSSJOH ● 'BDUPST"GGBDUJOH1VSDIBTF*OUFOUJPOPO&MFDUSPOJD$PPLJOH LOPXMFEHFUISPVHIUIFFYDIBOHFPGUIFMBUFTUJOGPSNBUJPOPOBEWBODFENBOBHFSJBMQSJODJQMFTBOE "QQMJBODFJO5IBJMBOE #JBP9JFBOE4VUIBXBO$IJSBQBOEB QSBDUJDFTJOWBSJPVTÜFMET5IJTFYDIBOHFJTDPOTJEFSFEBTBDPOUSJCVUJPOGSPNUIFCVTJOFTTTFDUPS
    [Show full text]
  • Advancing Nonmarket Strategy Research: Institutional Perspectives in a Changing World
    Open Research Online The Open University’s repository of research publications and other research outputs Advancing Nonmarket Strategy Research: Institutional Perspectives in a Changing World Journal Item How to cite: Doh, Jonathan P.; Lawton, Thomas C. and Rajwani, Tazeeb (2012). Advancing Nonmarket Strategy Research: Institutional Perspectives in a Changing World. Academy of Management Perspectives, 26(3) pp. 22–39. For guidance on citations see FAQs. c 2012 Academy of Management Version: Accepted Manuscript Link(s) to article on publisher’s website: http://dx.doi.org/doi:10.5465/amp.2012.0041 Copyright and Moral Rights for the articles on this site are retained by the individual authors and/or other copyright owners. For more information on Open Research Online’s data policy on reuse of materials please consult the policies page. oro.open.ac.uk ADVANCING NONMARKET STRATEGY RESEARCH : INSTITUTIONAL PERSPECTIVES IN A CHANGING WORLD Jonathan P. Doh, Thomas C. Lawton, and Tazeeb Rajwani We thank AMP co-editor Don Siegel for his support and encouragement, two anonymous reviewers for their valuable insights, and the other contributors for agreeing to participate in this symposium and for their unique insights into nonmarket strategy research. Executive Overview Nonmarket strategy is now well established as a legitimate field of research. In this paper, we review the dominant paradigms in contemporary nonmarket research and report on the key insights and findings from those perspectives. We use this review to suggest that the integration of institutional and strategic perspectives provides a logical path for the continued development of nonmarket strategy research going forward. Looking ahead, our premise is that institutional perspectives will have an increased relevance to nonmarket scholarship, particularly with the increasing importance of emergent economies to international business.
    [Show full text]
  • An Evaluation of Antidumping Laws As Applied to Companies Existing in Nonmarket Economies Lydia Brashear
    American University International Law Review Volume 5 | Issue 3 Article 4 1990 Factors or Prices? An Evaluation of Antidumping Laws as Applied to Companies Existing in Nonmarket Economies Lydia Brashear Follow this and additional works at: http://digitalcommons.wcl.american.edu/auilr Part of the International Law Commons Recommended Citation Brashear, Lydia. "Factors or Prices? An Evaluation of Antidumping Laws as Applied to Companies Existing in Nonmarket Economies." American University International Law Review 5, no. 3 (1990): 893-920. This Article is brought to you for free and open access by the Washington College of Law Journals & Law Reviews at Digital Commons @ American University Washington College of Law. It has been accepted for inclusion in American University International Law Review by an authorized administrator of Digital Commons @ American University Washington College of Law. For more information, please contact [email protected]. NOTES & COMMENTS FACTORS OR PRICES? AN EVALUATION OF ANTIDUMPING LAWS AS APPLIED TO COMPANIES EXISTING IN NONMARKET ECONOMIES Lydia Brashear* INTRODUCTION One area of United States trade policy focuses on the effect of for- eign imports on American industries.' To counter the effect of foreign import injury, domestic industries request that the United States De- partment of Commerce (DOC) enforce laws to determine whether for- eign companies are illegally "dumping" their products into the United States economy.' To determine foreign companies' compliance with fair competition laws, Congress and the DOC have developed procedures for penalizing foreign companies that harm or threaten to harm Ameri- * J.D. Candidate, 1991, Washington College of Law, The American University. This article is dedicated in memory of my mother, Lydia Rothman Brashear.
    [Show full text]
  • Corporate Market and Nonmarket Strategies in Asia: a Conceptual Framework
    Business and Politics Volume , Issue Article Corporate Market and Nonmarket Strategies in Asia: A Conceptual Framework Vinod K. Aggarwal∗ ∗ Copyright c 2001 by the authors. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher, bepress, which has been given certain exclusive rights by the author. Business and Politics is produced by The Berkeley Electronic Press (bepress). http://www.bepress.com/bap Corporate Market and Nonmarket Strategies in Asia: A Conceptual Framework Vinod K. Aggarwal Abstract Despite recent currency crises, most of the Asia-Pacific economies continue to be among the most attractive markets in the world and now appear to be recovering rapidly. An important element in understanding the dynamics of firm strategies in Asia is the nature of nonmarket strategies, which concern efforts to respond to and influence the political-economic-social environment. To examine such nonmarket strategies and how they fit with other firm tasks, this article first focuses on “positional analysis”-that is, how market forces, firm competencies, and the nonmarket environment influence the choice of trade, investment, or some mix, at the national, regional, or global level. It then considers the nature of “strategic analysis,” consisting of a firm’s choices of market arena, a transac- tion cost analysis of organization forms for market penetration, and a distributive politics analysis of nonmarket issues. These factors combine to influence the firm’s integrated strategic choice. Implementation of this choice is based on “tactical analysis” that focuses on the market, organizational, and nonmarket tactics that firms must pursue to succeed with their chosen strategy.
    [Show full text]
  • Undergraduate Catalog 2016–2017 Houston’S Catholic University
    UNDERGRADUATE CATALOG 2016/2017 Undergraduate Catalog 2016–2017 Houston’s Catholic University Cameron School of Business School of Arts and Sciences School of Education and Human Services Carol and Odis Peavy School of Nursing 3800 Montrose Blvd • Houston, Texas 77006–4626 • 713–522–7911 • www.stthom.edu GRADUATE PROGRAMS The University of St. Thomas offers the following graduate degree programs. Please contact the appropriate graduate school for information. Master of Business Administration (MBA) Master of Science in Accounting (MSA) Master of Science in Finance (MSF) Master in International Business (MIB) Master in Clinical Translation Management (MCTM) Master of Business Administration Education (MBAE) Master in Healthcare Administration MBA) Dean, Cameron School of Business 3800 Montrose Boulevard, Houston, Texas 77006–4626 Telephone: 713–525–2100 [email protected] Doctor of Education (EdD) Master of Education (MEd) Dean, School of Education 3800 Montrose Boulevard, Houston, Texas 77006–4626 Telephone: 713–525–3540, [email protected] Master of Arts in Faith in Culture (MAFC) Director, Center for Faith and Culture 3800 Montrose Boulevard, Houston, Texas 77006–4626 Telephone: 713–942–5066, [email protected] Master in Liberal Arts (MLA) Director, MLA Program 3800 Montrose Boulevard, Houston, Texas 77006–4626 Telephone: 713–525–6951, [email protected] Doctor of Philosophy (PhD) Master of Arts in Philosophy (MA) Director, Center for Thomistic Studies 3800 Montrose Boulevard, Houston, Texas 77006–4626 Telephone: 713–525–3591, [email protected] Master of Public Policy and Administration (MPPA) 3800 Montrose Boulevard, Houston, Texas 77006–4626 Telephone: 713–525– 3856, [email protected] Master of Divinity (MDiv) Master of Arts Theological Studies (MA) Master of Arts in Pastoral Studies (MAPS) Dean, School of Theology 9845 Memorial Drive, Houston, Texas 77024–3498 Telephone: 713–686–4345, [email protected] ACCREDITATION UNIVERSITY OF ST.
    [Show full text]
  • Capitalism Carol E
    RESEARCH INSTITUTE POLITICAL ECONOMY Capitalism Carol E. Heim 2002 Gordon Hall 418 North Pleasant Street Amherst, MA 01002 Phone: 413.545.6355 Fax: 413.577.0261 [email protected] www.peri.umass.edu WORKINGPAPER SERIES Number 41 Capitalism Carol E. Heim Department of Economics and Political Economy Research Institute University of Massachusetts, Amherst Amherst, MA 01003 (413) 545-0854 [email protected] August, 2002 This working paper has been published as the entry "Capitalism," by Carol E. Heim, in Dictionary of American History, Third Edition, vol. 2, Cabeza to Demography, ed. Stanley I. Kutler (New York: Charles Scribner=s Sons, 2003), pp. 41-47. CAPITALISM is an economic system dedicated to production for profit and to the accumulation of value by private business firms. In the fully developed form of industrial capitalism, firms advance money to hire wage laborers and to buy means of production such as machinery and raw materials. If the firm can sell its products for a greater sum of value than that originally advanced, the firm grows and can advance more money for a new round of accumulation. Historically, the emergence of industrial capitalism depends upon the creation of three requirements for accumulation: initial sums of money (or credit), wage labor and means of production available for purchase, and markets in which products can be sold. Industrial capitalism entails dramatic technical change and constant revolution in methods of production. Prior to the British Industrial Revolution of the eighteenth and early nineteenth centuries, earlier forms of capital in Europe—interest-bearing and merchant capital— operated mainly in the sphere of exchange.
    [Show full text]
  • Economics (ECON) 1
    Economics (ECON) 1 Prereq: ECON101 OR ECON110 ECONOMICS (ECON) ECON127Z Introduction to Financial Accounting In this course, no prior accounting knowledge is required or assumed. Students ECON101 Introduction to Economics learn how accountants define assets, liabilities, revenues, and expenses and A general introduction to the principles of economic analysis and their where those items appear in firms' balance sheets and income statements. implications for public policy, covering concepts and issues in both The purposes and limitations of these two financial statements as well as the microeconomics (concerning the function and performance of individual statement of cash flows are considered. Students gain an understanding of markets, organizations, or institutions) and macroeconomics (concerning the the accounting choices allowed to firms for reporting to stockholders and function and performance of the economy as a whole). This course is intended creditors and learn how the use of different accounting methods for similar primarily for students without significant prior study in the discipline, and it economic events creates challenges for analysts. Instances of questionable satisfies the prerequisites for most 200-level economics electives. financial reporting and strategies that can aid in their discovery are addressed. Offering: Host Later assignments focus on ratio analysis of actual firms' financial statements, Grading: OPT including techniques to identify firms in financial trouble. Credits: 1.00 Offering: Host Gen Ed Area: SBS-ECON
    [Show full text]
  • The Impact of Social Structure on Economic Outcomes
    Journal of Economic Perspectives—Volume 19, Number 1—Winter 2005—Pages 33–50 The Impact of Social Structure on Economic Outcomes Mark Granovetter ocial structure, especially in the form of social networks, affects economic outcomes for three main reasons. First, social networks affect the flow and S the quality of information. Much information is subtle, nuanced and diffi- cult to verify, so actors do not believe impersonal sources and instead rely on people they know. Second, social networks are an important source of reward and punishment, since these are often magnified in their impact when coming from others personally known. Third, trust, by which I mean the confidence that others will do the “right” thing despite a clear balance of incentives to the contrary, emerges, if it does, in the context of a social network. Economists have recently devoted considerable attention to the impact of social structure and networks on the economy; for example, see the economists’ chapters in Rauch and Casella (2001) (and the illuminating review essay of this volume by Zuckerman, 2003), as well as Dutta and Jackson (2003) and Calvo´- Armengol (2004). However, I focus here on sociologists’ contributions. Sociologists have developed core principles about the interactions of social structure, informa- tion, ability to punish or reward, and trust that frequently recur in their analyses of political, economic and other institutions. I begin by reviewing some of these principles. Building on these, I then discuss how social structures and social networks can affect economic outcomes like hiring, price, productivity and innovation. Social Networks and Economic Outcomes: Core Principles The following four core principles are important, but not meant to be exhaus- tive or, in any sense, an axiomatic treatment.
    [Show full text]