# Study Guide: Chapter 12 — Work And The Economy > Organized by textbook section. Review the objectives, study topics, key takeaways, and questions for each section. ## 12.1: Overview of the Economy ### Study Topics - Types of Economic Systems - Comparing Capitalism and Socialism - Democratic Socialism - Lessons from Other Societies - The US Labor Force ### Key Terms - **Capitalism** — An economic system in which the means of production are privately owned. - **civilian labor force** — All noninstitutionalized civilians 16 years old or older who work for pay or are looking for work. - **democratic socialism** — An economic system in which the government owns several important industries, but much property remains in private hands, and political freedom is widespread. - **economic inequality** — The extent of the economic difference between the rich and the poor. - **economy** — The social institution that organizes the production, distribution, and consumption of a society’s goods and services. - **family** — A group of two or more people who are related by blood, marriage, adoption, or a mutual commitment and who care for one another. - **health care** — The provision of medical services to prevent, diagnose, and treat health problems. - **Socialism** — An economic system in which the means of production are collectively owned, usually by the government. - **tertiary sector** — The part of the economy that provides services rather than products. ### Learning Objectives 1. Describe the three sectors of the economy. 2. Distinguish the two major economic systems in the world today. 3. Discuss the advantages and disadvantages of capitalism and socialism. ### Key Takeaways - The economy is the social institution that organizes the production, distribution, and consumption of a society’s goods and services. It consists of three sectors: the primary sector, the secondary sector, and the tertiary sector. - The two major economic systems in modern societies are capitalism and socialism. In practice, most societies have economies that mix elements of both systems but that lean toward one end of the capitalism–socialism continuum. - Social democracies combine elements of both capitalism and socialism. They have achieved high economic growth while maintaining political freedom and personal liberty. ### Review Questions 1. In what ways might capitalism be a better economic system than socialism? In what ways might socialism be a better economic system than capitalism? 2. Write a brief essay in which you discuss the values capitalism and socialism seem to develop among the people who live under either type of economic system. ## 12.2: Sociological Perspectives on Work and the Economy ### Study Topics - Table 12.1 Theory Snapshot - Conflict Theory - Symbolic Interactionism ### Key Terms - **Capitalism** — An economic system in which the means of production are privately owned. - **conflict theory** — The view that society is composed of groups with different interests arising from their placement in the social structure. - **economy** — The social institution that organizes the production, distribution, and consumption of a society’s goods and services. - **Functionalism** — The view that social institutions are important for their contributions to social stability. - **sexual harassment** — Unwelcome sexual advances, requests for sexual favors, or physical conduct of a sexual nature that is used as a condition of employment or promotion or that interferes with an individual’s job performance and creates an intimidating or hostile environment. - **Socialism** — An economic system in which the means of production are collectively owned, usually by the government. - **Symbolic interactionism** — A perspective in sociology that focuses on the meanings people gain from social interaction. ### Learning Objectives 1. List any two functions of work and the economy as emphasized by functionalism. 2. Summarize conflict theory’s critique of work and the economy. 3. Explain the overall approach of symbolic interactionism to understanding work and the economy. ### Key Takeaways - Functionalism emphasizes the importance of the economy for any society, and the income and self-fulfillment that work often provides. - Conflict theory highlights the control of the economy by the economic elite, the alienation of work, and various problems in the workplace. - Symbolic interactionism focuses on interaction in the workplace and how workers perceive many aspects of their work and workplace interaction. ### Review Questions 1. Which of the three major sociological approaches to understanding work and the economy do you most prefer? Why? 2. Write a brief essay in which you use a symbolic interactionist approach to understand some aspect of a job you have held or hold now. ## 12.3: Problems in Work and the Economy ### Study Topics - The Loss of Jobs and Wages - The Decline of Labor Unions - Applying Social Research - Race, Ethnicity, and Employment - The Impact of Unemployment - The Hidden Casualties of Unemployment - Economic Inequality - People Making a Difference - Occupy Wall Street - The Role of Tax Policy - The Impact of Economic Inequality - Tax Evasion - Crime in the Workplace - Employee Theft - Workplace Violence ### Key Terms - **capital flight** — The moving of manufacturing companies from US cities to sites in the developing world in Asia and elsewhere. - **Capitalism** — An economic system in which the means of production are privately owned. - **Child abuse** — Maltreatment of children in the form of physical or sexual assault, emotional trauma, or neglect. - **civil war** — War within nations. - **corporation** — An organization that has a legal existence apart from that of its members. - **crime** — Behavior considered so harmful or offensive that it is banned by the criminal law. - **Deviance** — Behavior that violates norms and arouses negative social reactions. - **Discrimination** — With regard to racial and ethnic inequality, the arbitrary denial of rights, privileges, and opportunities to members of subordinate racial and ethnic groups. - **drug** — Any substance other than food that, when taken into the body, affects the structure and/or functioning of the body. - **economic inequality** — The extent of the economic difference between the rich and the poor. - **economy** — The social institution that organizes the production, distribution, and consumption of a society’s goods and services. - **embezzlement** — The stealing of money in its various dimensions (cash, electronic transactions, etc.) by employees from their workplaces. - **family** — A group of two or more people who are related by blood, marriage, adoption, or a mutual commitment and who care for one another. - **life expectancy** — The average age to which people can be expected to live. - **multinational corporation** — A corporation with headquarters in one nation but with factories and other operations in many other nations. - **outsourcing** — The hiring by US companies of overseas workers for customer care, billing services, and other jobs that Americans used to do. - **professional fraud** — Stealing by physicians, attorneys, and other professionals from their patients/clients or from the government. - **race** — A category of people who share certain inherited physical characteristics, such as skin color, facial features, and stature. - **random sample** — A subset drawn from the larger population in which every unit in the population has the same chance of being included in the subset. - **sociological imagination** — From C. Wright Mills, the realization that personal troubles are rooted in public issues. - **white-collar crime** — Crime committed by people in the course of their occupations; Edwin Sutherland’s definition emphasized crime by people of high social status. ### Learning Objectives 1. Outline recent trends in jobs and wages. 2. Discuss the effects of unemployment. 3. Summarize the problems associated with increasing economic inequality. ### Key Takeaways - The move to a postindustrial economy has resulted in a loss of jobs and wages in the United States, thanks in part to capital flight and outsourcing. - Unemployment soared after the Great Recession that began in late 2007. Joblessness has significant consequences for the financial and psychological well-being of the millions of people who are unemployed. - Economic inequality has greatly increased since the 1970s, thanks in large part to changes in the tax code that favored the wealthy. - Corporations often engage in white-collar crime that costs hundreds of billions of dollars annually and results in tens of thousands of deaths. ### Review Questions 1. Write a brief essay in which you discuss the benefits and disadvantages of corporations in modern society. 2. Write a brief essay in which you summarize the problems associated with increasing economic inequality. 3. Fewer workers belong to labor unions now than just a few decades ago. Do you think this is a good development or a bad development? Explain your answer. 4. Think of a job you now have or your most recent job if you are currently not employed. On a scale of 1 (very dissatisfied) to 10 (very satisfied), how satisfied are you (were you) with your job? Explain why you have (had) this level of satisfaction. ## 12.4: Improving Work and the Economy ### Key Terms - **Capitalism** — An economic system in which the means of production are privately owned. - **crime** — Behavior considered so harmful or offensive that it is banned by the criminal law. - **Discrimination** — With regard to racial and ethnic inequality, the arbitrary denial of rights, privileges, and opportunities to members of subordinate racial and ethnic groups. - **economic inequality** — The extent of the economic difference between the rich and the poor. - **economy** — The social institution that organizes the production, distribution, and consumption of a society’s goods and services. - **race** — A category of people who share certain inherited physical characteristics, such as skin color, facial features, and stature. ### Key Takeaways - Certain social reforms are necessary to improve aspects of work and the economy. - Returning tax codes to their rates before the 1980s will help lessen economic inequality. - Stricter federal and state oversight of corporate behavior is needed to help address corporate crime. - A greater investment of federal funding in job creation and the raising of taxes for the very wealthy is necessary to create jobs while stimulating the economy. ### Review Questions 1. Write a brief essay that summarizes any three strategies for improving work and the economy. 2. To what extent, if any, do you think capitalism is to blame for the problems in work and the economy discussed in this chapter? Explain your answer. ## 12.5: End-of-Chapter Material ### Key Terms - **Capitalism** — An economic system in which the means of production are privately owned. - **conflict theory** — The view that society is composed of groups with different interests arising from their placement in the social structure. - **crime** — Behavior considered so harmful or offensive that it is banned by the criminal law. - **democratic socialism** — An economic system in which the government owns several important industries, but much property remains in private hands, and political freedom is widespread. - **Discrimination** — With regard to racial and ethnic inequality, the arbitrary denial of rights, privileges, and opportunities to members of subordinate racial and ethnic groups. - **economic inequality** — The extent of the economic difference between the rich and the poor. - **economy** — The social institution that organizes the production, distribution, and consumption of a society’s goods and services. - **Functionalism** — The view that social institutions are important for their contributions to social stability. - **Socialism** — An economic system in which the means of production are collectively owned, usually by the government. - **Symbolic interactionism** — A perspective in sociology that focuses on the meanings people gain from social interaction. ### Chapter Summary 1. Capitalism and socialism are the two primary types of economic systems in the world today. Capitalism involves private ownership, the pursuit of profit, and competition for profit, while socialism involves the collective ownership of goods and resources and efforts for the common good. Several nations practice democratic socialism, which is meant to combine the best of capitalism and socialism. 2. According to functionalism, the economy makes society possible by providing essential goods and services, while work gives people income and self-fulfillment. According to conflict theory, work is alienating, and the economic elite uses its control of the economy to maintain their elite position. Symbolic interactionism focuses on social interaction in the workplace and on how they perceive the work they do. 3. Problems in work and the economy include the following: (a) the loss of jobs and wages; (b) the decline of labor unions; (c) unemployment; (d) corporate misbehavior; (e) rising economic inequality; (f) tax evasion; and (g) workplace crime. 4. Social reforms based on sound social science research are needed to improve work and the economy. Two important reforms would involve stricter enforcement of laws against racial discrimination in hiring and employment and of penalties for corporate crime. ### Application You graduated from college a year ago and have begun working in sales for an electronics company. You’ve become good friends with a coworker, with whom you often “hang out” at bars and the occasional party. However, one day you notice this coworker pocketing a smartphone, and you realize that a theft is occurring. What, if anything, do you do? Explain your answer. ### Action Ideas To help deal with the work and economy problems discussed in this chapter, you may wish to do any of the following: 1. Start or join a group that tries to educate the public about economic inequality. 2. Assist a local labor union in its efforts to have safer workplaces.