Work and the Economy - Theoretical Perspectives on the Economy (SOCI 1306)

Work and the Economy SOCI 1306 Theoretical Perspectives on the Economy The functionalist sociological approach provides a prism through which the economy and the labour force are seen as vital parts of a well-oiled machine, intended to maximise efficiency and preserve social stability. According to functionalists, every aspect of society has a role in maintaining the general equilibrium and stability of the social structure. From this viewpoint, the economy and work are seen as essential components that support society's smooth functioning by enabling the creation and exchange of commodities and services. This point of view holds that the economy is more than just a collection of distinct marketplaces and transactions; rather, it is an essential system that guarantees the ongoing supply of resources required for population survival and well-being. The functionalist framework includes the Davis-Moore thesis as a central idea, contending that social stratification serves a necessary and functional purpose in society. This concept, which was developed in 1945 by sociologists Kingsley Davis and Wilbert Moore, contends that in order to draw in the best competent candidates, some social roles—especially those that need for advanced education and specialised skills—must provide higher compensation. This is justified by the argument that more complicated, demanding, and expert-level employment are essential to society's ability to operate. For example, scientists, engineers, and medical professionals play essential roles in the upkeep and development of civilisation. Years of schooling and training are necessary for these jobs, which involve large financial and personal commitments. Society provides more status, pay, and perks to people who choose to pursue these demanding jobs. According to Davis and Moore, this stratification structure guarantees that the most competent people are driven to take on the most important positions, adding to the general effectiveness and stability of society. According to a functionalist viewpoint, the state of the country and the economy are closely related. A strong economy makes sure that products and services are distributed consistently and effectively, which supports the operation of other social institutions. To satisfy the population's expectations, for instance, the agricultural sector—which produces food—must work effectively. To get to metropolitan areas, where a sizable majority of the population lives, the food produced on farms must first be carried via a network of highways, railroads, and other transportation networks. These cities operate as centres of economic activity, bringing people together to participate in the creation of commodities and services. Functionalists believe that this complex system of distribution, transportation, and manufacturing is necessary for civilisation to survive. Every aspect of the economy, including urban infrastructure, transportation, and agriculture, is essential to preserving societal stability and order. Functionalists do acknowledge, nevertheless, that not every social function promotes social stability. Sociologist Robert K. Merton used the term "dysfunction" in 1968 to describe aspects of society that have the potential to upset or damage the social order. Social institutions become dysfunctional when they are unable to change with the times, which has detrimental effects on society. For example, a functionalist perspective would see the Great Recession, which was brought on by the housing bubble bust in the late 2000s, as a significant economic dysfunction. Unstable lending practices and a loosely regulated banking sector made it impossible for the economy to continue operating at its prior level. Widespread consequences of the ensuing economic collapse included high unemployment rates, home foreclosures, and a general drop in economic activity. The Great Recession made clear how crucial it is to have a stable, well-regulated economic system in order to avoid these kinds of dysfunctions, according to functionalist theory. Functionalists also take into account the fact that the economy is cyclical. Economies generally experience expansion and contraction, denoted by times of excess, inflation, and recession. When there is a surplus, there may be more output than demand, which results in underutilisation of resources. When money loses buying power and becomes more costly, it is referred to as inflation. Conversely, a recession is marked by a drop in economic activity in a number of sectors, which frequently leads to more unemployment and lower consumer expenditure. According to functionalists, these economic cycles are normal and unavoidable because of how the market self-regulates. They contend that the long-term viability of the economy depends on letting market forces vary during these cycles. Functionalists may support letting the economy run its course, but they also recognise that extended downturns in the economy may have dire repercussions. An economic depression can result from a prolonged recession in several industries, which can have catastrophic repercussions for society. Governments frequently interfere in the economy to reduce the danger of depression by changing monetary policies, such as interest rates, to promote lending and expenditure. For instance, in a recession, the U.S. Federal Reserve may cut interest rates to make borrowing more affordable, which in turn encourages investment by companies and spending by consumers. This interventionist strategy is a reflection of the understanding that although economic cycles are inevitable, their effects on society may be controlled and lessened by means of legislative actions. In conclusion, the functionalist viewpoint sees the economy and the workforce as essential elements of a stable and effective society. The Davis-Moore thesis emphasises how social stratification is essential to guaranteeing that the most competent people occupy the most important jobs. Since it makes it easier to produce and distribute necessities, many believe that a strong economy is crucial to society as a whole. Functionalists do, however, also accept the cyclical nature of economic activity and the possibility of economic dysfunction, as seen by the Great Recession. They support government action to avert catastrophic economic downturns, even as they support letting market forces work organically. In the end, the functionalist viewpoint highlights how critical it is to preserve a stable and effective economic system in order to guarantee society's continuous stability and prosperity.