The Great Transformation was the most influential set of events that lead to the emergence of the market society. This had significance affect on the history of economics, which effected society throughout the ages that determined how we live.
Economics is a social science that studies how individuals, social organizations and governments make choices on allocating resources to satisfy their material needs.
According to Heilbroner, “the economic problem is simply the process of providing for the material well-being of society”(Heilbroner p.159). In essence the problem lies in the illusion of scarcity that motivates production and distribution of material goods. This illusion of scarcity ...view middle of the document...
These economy systems provide a solution to the production and distribution dilemma either working independently or in combination. Tradition economy is the oldest system based on a social organization that valued customs and beliefs. Traditional skills were perfected over time and passed down from father to son. Historically members of the community had responsibilities fulfilling roles that ensured the daily needs of society. Although distributing of goods was not always equal but human survival needs were met. The disadvantages of tradition economy, was little or no economic growth or social change.
Command was a combination of tradition and authoritarian economy system, which was practice back in the ancient times of the Egyptian, Greek and China’s history. History has shown that command economy system did effectively sustain its self through the power of the economic leader. He would expropriate and allocate the distribution of wealth at his discretion according to social status. This left many people feeling the injustice of being exploited. Command economic system proved to be advantageous during a crisis such as during a famine or at wartime, at which time goods were distributed effectively and rapidly.
Today we live in a free market economy that came into existence towards the end of feudalism. Free market economy, in essence is a system that controls, regulates and directs itself.
Employment was created by the demand of the market economy. With this economy individuals have the freedom of choice of where they want to work, it relies on the existence and circulation of capital through fictitious commodities i.e. land, labor and money. Market economy is profit driven that controls the production and distribution of commodities to satisfy the needs of society.
From studying Polanyi we get the fundamental understanding that production and distribution up to the end of feudalism, was organized into one of the three principles; reciprocity, redistribution and house holding. According to Polanyi, reciprocity is “Man’s economy, as a rule, is submerged into his social relationship” (Polany, 165). In order for a male provider to be perceived as a good husband and ensure his high social stature, he had to maintain his own family sustenance and gift his sister and her family with his finest produce from his crop without any financial gain.
Redistribution was a method where the tribal chief implemented and maintained a storage system for the substantial part of all the produce that was delivered to his tribe, and to be used at his desecration. The tribal chief also ensured that the produce would be filtered evenly throughout the tribe with some of the produce used in the forms of gift giving or for facilitating long distance trading.
The only reason reciprocity and redistribution successfully function as a socioeconomic system is because of symmetry and centricity; money, land, labor and...