CHAPTER 12

Sociology of the

Economy

What is the Place of the economy in the Social Order?

-Economy is the actual organization and utilization of natural and human resources by a

given society, at a given time in accordance with their cultural patterns.

The significance to and important implications on the society and culture:

-we find that human economic activities greatly influence habits, skills, knowledge, expectation, motivation, aspiration and ideology.-economic behavior affects social norms, values and personal relationships within society.-There is then, an interrelationship between people’s economic activity and social behavior. Each affects the other.-to understand human economic life, one has to consider the society and culture that influence it. -to understand social organization, we must analyze society’s various considerations and contexts.

-The sociology of economy studies relations of production, processing, distribution and consumption of the material goods and the influence of economic institutions on social organizations and social change.

The Social Structure of Economy

Economic

System

Agricultural to

Industrial

Subsistence to

Mechanize

-In subsistence economies, the family is the center of the economic activities and is simultaneously the production, processing, and distribution unit.-Mechanized economies employ, to a large extent and degree, mechanized power for the production, processing and distribution of economic goods.

-agriculture dominates the economy of an

agrarian economy; whereas in an

industrial economy, manufacturing,

trade, and commerce and

services dominate.

Underdeveloped

to develop

-a great part of natural human resources are untapped.-A high degree of mechanization, industrialization, urbanization. Automation and a high level of living exist in a highly developed economy.

Capitalism And

Communism

CAPITALISM-Enables a person, through free enterprise, to keep the products of one’s efforts to oneself with a minimum of state control.COMMUNISM-Every person, through governmental collective ownership and control of facilities for production, processing, distribution and consumption, shares in the goods produced by the society.

Classifying economies along these continua have brought about the development of certain scales. These scales may involve the use of correlated psycho-socio-economic-cultural factors :

The number and types of occupation that the people engage in

The use of money as a medium of exchange.The extent and degree of application of mechanized power to economic activities.

The per capita or per family income and expenditures.The quantity and quality of material possessions. The nature of borrowing and/or credit managements and/or market transactions.

The prevailing social norms and value orientation on property, work, exchange, exchange, leisure and others.

Social Subsystems of Economy

PROPERTY

-Refers to the network of “rights and duties of one person or group as against all other persons and groups with respect to some scarce good.”

-Property may be held by individuals, by families, or by groups. Tenure of property may be by leasehold or by ownership. Owned by individuals or small groups, its ownership and control are generally fused; in the case of property owned by large corporations, the two become separate.

-Private and Public. Private property is comparatively free from direct state controls and is generally transferred from the owners to their duly designated heirs. Public property is subject to governmental restraints and is placed under the control of the different social subsystems of the government.

-In the Philippines, land ownership, the foundation of wealth, prestige, power and influence, is heavily concentrated in a few families.

-The more type of ownership is single proprietorship wherein the owners are the managers.

-Concentration ownership, control, transfer and use of property results in paternalistic-employer and subservient-employee relationships. It has tended to produce unequal distribution of family income/ per capita, poverty, malnutrition, poor health, low productivity, low savings and investments, social mobility and inadequate housing, clothing, medicine and recreation.

LAND TRANSFER

-The agrarian reform program was acclaimed by pres. Corazon Aquino as the center piece of her administration.

-E.O. 229 / Comprehensive Agrarian Reform Program (CARP). In line with a Constitutional mandate to institute an agrarian reform program founded on the right farmers and regular farm workers who are landless to own directly or collectively the lands they till, or in the case of other farm workers, to receive a just share of the fruits .

-Congress passed R.A 6657 / Comprehensive Agrarian Reform Law (CARL) . Include all public and private lands, regardless of tenurial arrangement and commodity produced. Other lands of the public domain which are suited for agricultural purposes are to be included.

-Some farmers claim that the quality of their life and welfare improved.

-Peasant and cause-oriented group claim that the CARL is full of loopholes and favor land owners, it was manipulated to fit in an export –oriented foreign dependent agricultural economy in line with agri-business interest. Scams at the sale of lands for distribution have also affected the program.

-The Ramos administration is also accelerating the implementation of the CARP in order to meet the original deadline mandated by law to accomplish the distribution by 1998.

-July 26, 1993, Pres. Fidel V. Ramos pointed out the government’s achievement on CARP implementation.

TECHNOLOGY

-Consists of the knowledge, skills, and attitudes necessary to convert available resources into objects people need and want.

-Acc. To Alvin Toffler, technology feeds on itself, it creates the need for more technology.

-Technological advances consists of three factors:

Creative, reasonable idea

Practical application

diffusion through society

-Robert Blauner views technology as the major factor which influences the behavior and attitudes of workers.-Significant characteristic of population that affect technology:(1)The rate of its growth

(2) the directions of its mobility(3) the density of pressure of its distributions

(4) its supply of technically skilled workers, technicians & managers(5) its value orientation and beliefs with regard to the acceptance or rejection of technological innovations.

-Important aspects of the social organization in relation to technology:

(1)The size and homogeneity of the population

(2) the structure of the leadership and followership and their corresponding personality characteristics

(3) the types of social interaction involved.

-Criteria on which to base the extent and possibilities of technological development:(1)Accumulated body of technological knowledge

(2) technical skills

(3) institutional structures and value orientation

(4) population growth

DIVISION of

LABOR

-Represents the differentiation of functions - institutional and economic roles – performed by the individual member and small groups of the society.-Traditional societies, non-agricultural work was based on a mastery of a craft which entailed long periods of apprenticeship.-In modern, industrialized societies, there are many thousands of distinct occupations.

-Durkheim states that a society continues to industrialize, the “mechanical solidarity” of simple subsistence economies largely based upon the homogeneity of its members develop into the “organic solidarity” of complex mechanized economies greatly depend upon more refined tools, more complex machines and the coordination and synchronization of individual and group contributions into an elaborate organizational apparatus for collective life.

Total Population 15 years and over

38, 003

Labor force employed 24, 491

Employed 22, 556

Employed working less than 40 hours a week

7, 039

Employed wanting more hours of work (working less than 40 hours a week)

2, 754

Unemployed 1, 933

Philippine Labor Status 1990

Source: NSO Monthly Bulletin of Statistics, Integrated survey of households. Manila, National Statistics Office, August, 1990.

Labor force participation rate (%)

64.4

Employment rate (%) 92.1

Unemployment rate (%) 7.9

Visible Unemployment Rate (%)As per cent of labor force

11.24

As per cent of employed 12.4

It shows the employment status of those in the labor force. However,

there is high rate of underemployment. This means that the take home pay of the underemployed are less than those

of the fully employed. Labor participation rate defined as the

percentage of the total persons 15 years and over in the labor force was

64.4 percent.

Employment by Sector 1988-1990 (Thousands)

1988(000)

Per Cent to Total

1990(000)

Per Cent to Total

All Industries 21, 205 100.00 22, 558 100.00

Agricultural, fishery, forestry

9, 969 47.00 10, 160 45.04

Mining, quarrying

160 .75 136 .6

Manufacturing 2, 183 10.3 2, 191 9.7

Electricity, gas, water

55 .45 88 .4

Construction 830 3.9 979 4.3

Wholesale, retail trade

2, 871 13.1 3, 159 14.0Source: NSO Monthly Bulletin Statistics, August 1990. Manila: National Statistics

Office.

Transportation, storage communication

1, 015 4.8 1, 135 5

Financing, insurances, real state, business

390 1.8 443 1.96

Services, community, social, personal

3, 702 17.5 4, 218 18.7

Industry not elsewhere classified

1 .005 43 .2

Table 3 By industry, agriculture, fishery and forestry accounted for 45.04 percent of the total

employed persons.

Table 4. Labor Force Employed, Partially Employed and Unemployed by Region October 1990

Labor Force Employed Partially Employed

Unemployed

Region IIlocos

1, 364 1, 262 (92.5%) 401 (31.8%) 102 (7.5%)

Region IICagayan Valley

999 953 (95.4%) 318 (33%) 46 (4/6%)

Region IIICentral Luzon

2, 407 2, 175 (90.3%) 450 (20.9%) 232 (9.6%)

Region IVSouthern Luzon

3, 212 2, 931 (91.2%) 914 (29.13%) 282 (8.8%)

Region VBicol

1, 756 1, 657 (94.4%) 887 (35.4%) 99 (5.6%)

Region VIWestern Visayas

2, 139 2, 054 (96%) 788 (38.4%) 85 (3.9%)

Region VIICentral Visayas

1, 875 1, 737 (92.7%) 574 (33%) 138 (7%)

Region VIIIEastern Visayas

1, 442 1, 357 (94.1%) 590 (43.5%) 85 (5.9%)

Region IXWestern Mindanao

1, 145 1, 075 (93.9%) 322 (30%) 70 (6.1%)

Region XNorthern Mindanao

1, 538 1, 417 (92.1%) 553 (39%) 121 (7.9%)

Region XISouthern Mindanao

1,783 1, 644 (92.2%) 556 (39%) 139 (7.8%)

Region XIICentral Mindanao

1, 129 1, 068 (94.5%) 501 (47%) 61 (5.4%)

NCR 3, 175 2, 722 (85.7%) 268 (9.8%) 453 (14.3%)

CAR 526 506 (62%) 117 (33%) 20 (3.8%)

Table 4 Shows that Region VI, Western Visayas has the highest employment rate of 96 percent; and the National Capital Region (NCR) has the highest

rate of 14.3 percent. Generally, Filipinos seek overseas employment because of low real wages and little

job opportunities in the country.

Employed by Class of Worker, 1990Number Per Cent

All class of workers 22, 558 100.00

Work for Private Household/ Establishment/ Family Operated Activity

8, 095 80.7

Work for Government/ Government Corporation

1, 935 19.1

Wage and Salary Workers 10, 331 45.8

Own Account Workers 8, 608 38. 1

Self-Employed/Employer

Unpaid Family Workers 3, 616 16

Deployed Overseas Contract Workers (OCW)

1992 1991

Sea based 136, 806 125, 759

Land based 549, 651 489, 260

Total 686, 457 615, 019

OVERSEAS EMPLOYMENT

Philippine government officials estimate that there are over 3 million Filipinos living and working overseas in 130 countries around the world. The export of human resources is strongly encouraged by the Philippine government, under the aegis of the Department of Labor and Employment, which in effects serves as the country’s biggest overseas job recruiter. OCWs remit an estimated $1.5 – 2 billion in annual foreign exchange through the banking system.

Labor export is now one of the Philippines’ foremost source of foreign exchange. Former President Marcos ‘ Presidential Decree 442 in 1972 created two unique government bodies, the Overseas Employment and Development Board (OEDB) and the National Seamen Board (NSB). Under the Aquino administration, these two bodies were joined to form the present Philippine Overseas Employment Administration (POEA). POEA, an agency under the Department of Labor and Employment, is assigned the task of supervision, regulation, promotion, and monitoring of the governments’ overseas employment program.

Over the last 6 years alone, Filipino overseas workers pumped close to $6 billion into the local economy. According to a study by the Center for Research and Communications, the lack of jobs, deteriorating wages, and soaring inflation, combined with the estimated 2.7 million persons, 15 years and above, will inevitably make the Philippine unemployment situation worse than it already is and drive workers to seek greener pastures abroad.

Apart from personal motivations like “independence” and “specialized” training,” the primary reason that lures Filipinos to work abroad is still the more lucrative pay.

Economists call it the “informal sector.” It is otherwise known as the “underground” or “black economy” or, the “people’s economy.” It is essentially the business of surviving. For example, there are the office and school bazaars. Upper income groups have taken to patronizing “tiange” or flea markets that sell imported goods and exported overruns at cutthroat prices. Then the perennial shop and stop – the street traffic market. Also, there are those driven to extremes – the beggars, scavengers and the petty thieves.

This free wheeling economy is abetted by the tendency of big business and multinationals to cater only to the needs and demands of upper income groups. It is what has kept the Filipino’s head barely above the economic quagmire – it is what has, so far, stemmed the effects of conditions that have caused social upheavals in other societies.

ORGANIZATIONOf

WORK

 Sociology of work organization is

concerned with the application of sociological principles to the study of economic structures, changes in these structures and the values and ideologies related to them. The sociology of work is associated with organizational problems such as workers morale, productivity, absenteeism, and turnover rates.

The cabo system operates within stevedoring companies which handle the cargo of shipping companies. A stevedoring union within the stevedoring company holds a contract with it (the company) the exclusive right to supply the company with workers.

The cabo gets the highest pay. Evening rates are higher than the day rates. The union deducts 5 percent as union dues, P0.25 for “death relief” an P1.00 for meals. The cabo deducts about two or three pesos from each of his workers wages as his share. This is called “pakikisama” or smooth-inter-personal-relations money.

The stevedore have developed systems called “tumbukan”, “pitik”, and “tulog” to increase their earnings. The “ tumbukan” system gives the cabo and the ordinary stevedore an opportunity to work with another gang aside from the one he really belongs to. The “pitik” system is the practice in which the cabo brings to work a gang of only 7 or 8 men instead of the required eleven. The wages of these non-existent workers is called the “pitik” . The “tulog” is the practice of having only six men actually work aboard the ship, while two are allowed to sleep or pilfer goods.

In another practice called the “Segundo” system, the cabo asks someone else so bring the gang to work. He is given some money by the “Segundo” at the end of the day after the payroll has been sold to the loanshark.

FUNCTION of the

ECONOMY

The economy system provides physical subsistence for a society.

It generates, as well as incorporates, social changes for continuity of society.

The economy maintains a balance with the other social systems and

among its social subsystems in the production, processing, distribution

and consumption of economic goods and services.

The economic institution indicates the nature of social stratification in the society. 

INDUSTRIALIZATIONIn the

WORLD CONTEXT

Industrialism began in Western Europe in the eighteenth century as a result of massive technological innovations in the production of goods.

Great Britain is the first and classical example of industrialization as it moved from an agricultural to a commercial society. By 1830, it has changed into an industrial society. Today, it is one of the highly industrialized countries in the world, which proved that a strict program of development with state control and responsibility can achieved. 

Programs for Philippine Economic Development

Among the many plans and programs that aim to make the Philippine economy grow is the conversion of the former American naval base, Subic Naval Base into a free port zone under the management of Subic Bay Metropolitan Authority (SBMA).

Richard J. Gordon gave up his post as Olongapo City Mayor to devote full time as SBMA chairman to boost investments into the project to $400 million.

U.s telecommunications companies – GTE, AT & T, and Siemens – are also looking into the possibility of setting up business in Subic.

Livelihood projects are also organized to help the poor be self reliant. An example is the Smoky Mountain Financing Training Program.

The community has also established a computer school which land turned out 100 programmers. A 363 billion-peso project will provide housing for the 2,500 families.

The project is being developed byR2 Builders, a Filipino company headed by Regis Romero.

The implementation of the project will take three years and is seen by President Ramos as a pivotal community development for other smaller dump sites in the country.

Analysts have pinpointed several defects in the economic structure of the Philippines. They identified the gross inefficiency and lack of dynamism of the manufacturing sector and the subsequent persistent balance of payments deficits and recurrent huge public sector as a major problem. This industrial sector is nurtured in excessive protectionism; the need to modernize does not grip them they persist because of the political power wielded by owners.

Another very significant block towards progress is rapid population growth. Relatively slow economic growth and rapidly rising population makes it difficult to expand education and health services and improve their quality. The government also has to give reduction of population growth policy priority to be able to make progress in the alleviation of poverty (Asian Development Bank 1990)