Loading the lesson
Loading the lesson
Search AllRounder.ai
Search the courses, subjects, tracks, games and features, or jump straight to a page.
Search the courses, subjects, tracks, games and features, or jump straight to a page.
Learn it your way
A short class with Sarah and her students. The other ways are under More.
Sign up free to listen. Transcripts are free to read.
When you hear the word 'economy', what comes to mind?
Money, prices, the stock market and the budget.
Those are part of it. But sociologists ask who works, who owns, and who gets what share. Economic organisation is the whole set of social arrangements for producing, distributing and consuming goods.
So a family farm where everyone helps and shares the harvest is also economic organisation?
Exactly. There the household is both the unit that produces and the unit that consumes. Which other institutions organise economic life?
The market, the government, companies, and maybe the village community.
Right: household, community, market, state and firm. Most economies combine all of them.
In many Indian villages, a barber or potter used to serve the same landowning family for generations. How do you think they were paid?
With money for each haircut or pot?
Mostly not. They received a share of the harvest and gifts at festivals. William Wiser described this jajmani system in 1936.
So caste decided who did what work, and the payment came through a lifelong relationship.
Yes. Karl Polanyi would call that an economy embedded in social relations. Why do you think the system has declined?
Because money, new jobs and migration to cities give people other choices.
How would the economy of a hunting and gathering band differ from that of an industrial city?
The band would share food and have very little surplus. The city would have factories, wages and markets.
Good. Karl Marx said the way production is organised, which he called the mode of production, shapes the rest of society. What would that include?
The tools and technology, and also who owns the factories and who works in them.
Exactly: forces and relations of production. Max Weber added that ideas and religious values can shape the economy too.
So the economy shapes society, and society also shapes the economy.
the social arrangements a society uses to produce, distribute and consume goods and services.
the household, community, market, state and firm each organise part of economic life.
economic action is bound up with kinship, caste, religion and politics, as Polanyi argued.
hereditary service ties between landowning families and service castes, paid mainly in kind, now largely in decline.
the main way of making a living shapes economic organisation, from hunting bands to post-industrial societies.
Marx saw the mode of production as society's base, while Weber showed that values can shape the economy.
In the jajmani system, a village barber might serve a landowning family for generations and be paid with a fixed share of grain at harvest rather than a fee for each haircut.
On a family farm where parents and children share the work and the produce, the household is both a unit of production and a unit of consumption.
Among many hunting and gathering peoples, meat from a large kill is shared out across the band, so economic life rests on reciprocity rather than profit.
An online food-delivery service combines the firm (the platform and the restaurants), the market (prices and customers), the state (licences, taxes and food-safety rules) and households (customers and the families of delivery workers).
Make it, move it, use it too; who decides is the sociologist's view.
Ramu's grandfather cut hair for the same landlord's family all his life and was paid in grain at harvest. Ramu now runs a salon in the town, charges a fixed price, pays GST and advertises online. The work is the same, but its economic organisation has completely changed.
H-C-M-S-F, "Happy Cows Make Sweet Fodder": Household, Community, Market, State, Firm.
R.L.P.E.V. - Resources, Labour, Property rules, Exchange, Values: the building blocks of any economic organisation.
Term
What is economic organisation?
Click to flip
Term
Name the five main institutions that organise economic life.
Click to flip
Term
What did Karl Polanyi mean by embeddedness?
Click to flip
Term
How were service castes mainly paid in the jajmani system?
Click to flip
Term
What two things make up Marx's mode of production?
Click to flip
The social arrangements through which a society produces, distributes and consumes goods and services.
The idea, associated with Karl Polanyi, that economic activity is bound up with social relations such as kinship, religion and politics.
A traditional system in Indian villages in which service castes served landowning families over generations in return for shares of the harvest and customary gifts.
Marx's term for the way a society produces, combining its forces of production with its relations of production.
The tools, technology, raw materials and human labour used to produce goods.
The social relationships of ownership and control in production, such as those between owners and workers.
Production beyond what is needed for immediate survival, which can support people who do not produce food.
A society in which most people work in services, knowledge and information rather than in farming or manufacturing.
Economic organisation is the set of social arrangements through which a society produces, distributes and consumes goods and services; sociologists study it as a pattern of relationships, not just as money and prices.
This lesson introduces the idea that ties the whole chapter together. It explains what economic organisation means, the institutions that carry it out (the household, the community, the market, the state and the firm), and the sociological insight that economic life is embedded in kinship, caste, religion and politics, illustrated by the jajmani system of Indian villages. It then shows how economic organisation changes from hunting and gathering societies to agrarian, industrial and post-industrial ones, and how Marx, Weber and Polanyi explained the link between the economy and the rest of society. The sub-lessons that follow examine economic activities, the division of labour, modes of exchange, economic systems and occupations in detail.
Economic organisation is the way a society arranges the production, distribution and consumption of goods and services. Every society must decide who works, with what tools and resources, who owns what is produced, and how it is shared out. Economists usually focus on prices, markets and quantities. Sociologists ask a different set of questions: which social relationships organise work, what rules and values decide who gets what, and how economic life is connected with family, caste, religion and power.
Any economic organisation combines:
Several institutions carry out economic activity side by side:
The economic historian Karl Polanyi argued in The Great Transformation (1944) that for most of history economic activity was embedded in, or bound up with, social relations such as kinship, religion and politics. Goods moved through reciprocity and redistribution as much as through markets. A self-regulating market economy, he argued, is a comparatively recent development.
The jajmani system of many Indian villages is a classic example, described by the American missionary-scholar William Wiser in 1936. Landowning families (the jajmans) received the services of families of other castes, such as barbers, potters, carpenters and washermen, often over several generations. These service families were paid mainly with a fixed share of the harvest and customary gifts at festivals and ceremonies, rather than a cash wage for each job. Work, payment and status were all tied to caste and hereditary relationships. With the spread of money, land reforms, new occupations and migration to towns, these ties have weakened greatly, and the jajmani system has declined.
Sociologists often classify societies by their main way of making a living:
Together, these ideas explain why the same economic activity, such as growing grain, can be organised very differently in a tribal community, a feudal village or a modern agribusiness.