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by Phil Bartle, PhD

Training Handout

Like the other five cultural dimensions, and like the mathematical dimensions of length, width and depth, the economic dimension of culture and society is a logical construct

It lies in our minds rather than in the society or object being observed.

So no matter what its size, a social institution has an economic dimension, just as a pencil has a length, no matter how long or short it is.

If the dimension is zero, then the whole object (including all the other dimensions) is not there.

To understand the economic dimension, we go back to the basics of economics.

Although the word "economics" on the street or in the newspapers today usually implies a market economy, the sociological dimension is much more encompassing.

Simply put, it is the distribution of wealth.

That wealth is anything of value –– goods or services. In fact, it is the services that goods supply which makes them valuable.

Wealth is also one of the sixteen elements of strength of families, organizations and communities.

Two elements contribute to economic value: it is (a) relatively useful and (b) relatively scarce. If it is more useful, the value increases. If it is more scarce, the value increases.

Air, for example, is very useful to us air breathing animals. We usually think of air as free. That is because it is not relatively scarce. It is all around us.

If I put my arm around your neck and threaten to cut off your air supply, you will see that the value of that air has increased.

Ask any scuba diver if air for breathing, when it is in a bottle under water, is valuable; you will get the answer.

Conversely, there are few minerals and elements on the chemist’s list that are very scarce. Since they are not seen to have any use, their value still is low.

To be valuable, a good or service must be both scarce and useful.

As a dimension, there is an economic dimension to the smallest social unity, the interaction within a dyad (two people), all the way up to that of a whole country.

In every day conversation and the newspapers, the economic dimension is assumed to be about money.

Money is not wealth, however.

Money is a measure of wealth, a way to store wealth, and a way to exchange or distribute wealth.

If you take two pieces of currency, say a five dollar bill and a hundred dollar bill, there is no difference in their intrinsic value.

Each can be used, for example to roll tobacco in for a cigarette, or perhaps used to clean one’s self in a cafeteria toilet where the management has neglected to provide a replacement roll of tissue.

It is our faith and belief system (our culture) which makes the value of the hundred dollar bill worth twenty times the value of the five dollar bill.

When we look at simple societies, especially those whose technology is based on gathering and hunting, we get a clue about non monetary distribution of wealth.

We see, for example, when someone comes home with some gathered berries or a successfully hunted animal, they will likely distribute it to members of the family, and perhaps to neighbours.

No money changes hands.

There is usually no expectation of exchange or immediate repayment. As with gift giving, there may be some unstated obligations implied, or the distribution may be based merely on kin obligations.

Then we look at our own, complex (eg mainstream Canadian) society. When money and market principles of exchange or distribution were added to our culture, earlier principles of distribution were not lost.

We still give gifts for birthdays, and some annual festivals, such as Christmas or Diwali.

An infant can still be fed by its parents without being expected to pay cash or use a credit card.

Gifts and family obligations, as principles of economic distribution, are institutions which go far back into history, before money and markets were created.

When someone opens up a lunch bag, and offers you a cookie or piece of sandwich from it, no obligations need be assumed, although the act may be seen as a confirmation of friendship.

When your lecturer drones on about the topic at hand, wealth is being distributed. Although you paid school fees, they account for only about a seventh of the cost of putting that lecturer in front of you.

The Government and private donations provide the other six sevenths. No immediate payment of cash is required in the lecture room for this wealth in the form of knowledge, information or wisdom, being distributed.

The labour needed to keep a household running, washing dishes, making beds, cooking meals, wiping junior’s nose, is all wealth.

With the creation and development of the market economy, these were left behind –– culture lag as it were –– as residuals of the pre market societies. They did not disappear.

Since they are forms of labour often left to women (distaff), such labour tends to be undervalued. Since the two waves of the women’s movement, this has become an issue because of the ideal of equal pay for equal work, and the dilemma of determining how to allocate a fair payment for the work that is done around the house.

We can get a deeper understanding of the economic dimension of our society today by looking at the order in which new forms were added to the old.

The first big jump came with the agricultural revolution, and the creation of the agrarian surplus.

This prompted the rise of cities and city states, where the surplus food was consumed by the aristocracy, traders, military and police enforcers, and scribes to keep track.

This was state reallocation of wealth, and prompted the invention of written language and numbers.

It is no coincidence that a few thousand years later, in modern English, the word “account” means two things, a narrative report and a financial statement.

Although money is used for salaries and other expenses, paying for a police force is a modern form of state reallocation.

The government, municipal, provincial or federal, collects taxes from taxpayers, and spends it on running a police force to protect property.

A related occupation, violent extortion as practised by organized criminals (the "mob"), usually is on a fee for service arrangement, where a store owner is protected (from the mob itself) after paying an extortion fee. It is contrasted with a police department only in that it is not state reallocation of wealth.

A health system is modern state reallocation to the degree that tax money is used to cover costs, but part of the market economy to the degree that "fee for service" is also invoked to cover costs.

Barter has not been very important in the development of economic systems.

The problem is that direct exchange, without money, limits the choices available for the traders.

Even modern schemes of persons trading their services and products, in order to avoid being taxed, have often resorted to an accounting system to simulate money, so called "green money," which allows people to provide the goods or services they can, but purchase the goods or services that they want.

Tithing by the church is a form of "state" redistribution, where a “gift” of charity to the church is forced, and the church can then spend the money according to its own priorities, rather than according to the desires of the givers of tithes.

The communist ideology advocates a state redistribution system in which, "From each according to his ability; to each according to his need." This has only been practised in simple gathering and hunting communities, and would be extremely complicated to execute in a modern society.

As societies became more complex, and division of labour expanded far beyond that of the half dozen major roles needed for the earliest cities and states, the invention of money was inevitable.

The first money was some good, relatively durable, that may have had an intrinsic value, such as cows.

Later it became obvious that money served its purpose (to store, measure or exchange wealth) best if it was composed of something that could not be used for anything else.

Gold, for example, has now been removed from our coinage.

Another concept discovered by social sciences when looking at other societies, and then discovered to apply to our own, is that of "Spheres of Exchange."

In many cattle societies, for example, wives can be “bought” by providing cows, but cannot be exchanged for things such as food or tools.

Looking back at our own society, we see that sex and affection are provided by spouses, and are not expected to require payment.

If they are sold on the market, there is a different set of values that are invoked, and the profession is called prostitution or, more often, some epithet or expletive.

Similarly children. We want them. We see them as precious. They are relatively scarce and useful. But to buy or sell them is thought to be immoral and illegal.

Children and sex are thus two areas in our modern society where there are spheres of exchange, and crossing over from one sphere to another is not considered ethical.

While the basic economic principles are the same, Sociology and Economics see the economy in different ways.


The Economic Dimension of Society

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Last update: 2012.02.13

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