Economy as an Institution:
Economic Institution in sociology and anthropology refers to
the way of performing, economics activities. Through these institutions, economic
necessities of a community are fulfilled. Not only economic institutions are
limited in fulfilling of economic necessities but also they affect the whole
society and culture. Hence economic institutions are the focal point of study.
Economic institutions are more concerned with the production of goods and
services, consumption and distribution.
Economic Institution is a way of working system. Organizational
structure, and its legal activities, what we call in general cannot be called
an economic institution. In sociology and anthropology economic institution
means those organization that are developed from ancient times and the form of
economic activities and relationship that are prevalent even today.
Economic Institution in sociology and anthropology means the
way of conducting economic activities in society. The system of production,
consumption and distribution of goods and services as per the custom and the
requirement of society in each society, be it the traditional or rural or
modern or urban, we call it economic institution. These economic institutions mainly
focus on three aspects. Firstly, the type and quantity of goods and services to
be produced, secondly, how to exploit the existing natural resources like land,
mines, forest, water resources and human resources for production of goods and
services and the availability of such resources and thirdly, to whom goods and services
need to produce etc. Each economic institutions work actively in each
historical period considering these three aspects.
Economy as an adoptive
institution of society:
There happens to be a intimate relationship between economy
and social institution. There is one possibility of change in the form of
economy due to the form of society, its situations, demands and desires, nature
of consumption, culture, religion, values and beliefs. It means that the
socio-cultural state and nature determines the state and nature of economy. On
the flipside economy also determines the nature and forms of socio-cultural
system. Relaying on these two analyses, we can claim that economy is an adoptive
institution of society.
Economy is the process of operation of social system, which
continuously affects the society. Economy means the integrated system of
consumption, production, distribution and exchange. The process of consumption,
production, distribution and exchange depends upon human desires, which is also
affected by cultural and geo-physical aspect. To ease their livelihood pattern
human selects certain economic system, relationship and behaviors. Economic
system is selected on the basis of types of production and their benefits to
the society.
Economy cannot be understood excluding it from society and
culture. As per social desires, if production processes are forwarded, change
also occurs in total production system. Economy, indeed, is an adaptive
institution in society. Hence, various economics are developed in a social
system.
Economic institution and
socio cultural life:
Economic Institution has a direct relationship with social
life. The following points will clarify this argument.
- Economic system and division of labor
- Economic system and social structure
- Economic System and occupation
- Economic system and production, consumption and exchange system
- Economic system and stratification and social relationship
Task of Economic Institution:
Economy is the unified form of production system,
distribution, exchange and consumption. We generally understand the technique
of production, relationship among the production units, impart of technology,
produced goods, while speaking about economy. We can describe the task of
economy as follows:
1.Production:
Production is the main task of economy. Production means the
construction, development and growth of goods and services. Production of such
goods and services is made for the household level to community level and
national level. Household level production is mainly of primary nature, where
family is only focused while producing. For example subsistence based
cultivation, animal husbandry, small scale cloth and wares, and tools are
produced for the consumption by certain communities only and not for selling.
In industrial society production is
made in large scale using the mass equipments, machines, technology and
resources. Large scale produced goods and services are delivered into external
market. Production mechanisms are prepared as per the demand of the market and
more and more profit is expected from production. This kind of production is
made in industrial capitalist societies. Modern capitalist economy has begun
displacing traditional knowledge, skills, ways, methods, capacities etc, which
ultimately promote industrial dependency and extinction of community based
production and skills.
2.Distribution:
Distribution means the process through which goods and
services are delivered to targeted groups. Through distribution process goods
and services are extended to communities. While distributing, if the nature of
production is primary, or if the production quantities are limited and if the
production is subsistence based, such goods are distributed to specific and
communities only. After industrialization, when goods are produces in extensive
way, the importance of distribution is highlighted. The distribution process of
global marked-based goods and services of industrial states is broadened.
In the
present world, transportation and other infrastructure are developed to ease
the distribution process of goods, produced by multinational companies, in
concerned countries. Political and economic treaties are made between the
concerned countries to make easier the distribution globally. But the unequal
distribution of income has promoted the imbalances in the economy in the
present world. The gap between rich and poor is increased globally. The main
factor behind this is the inability of the state mechanism to deliver
development process equally to each class and strata of people living in the
country.
3.Exchange:
Exchange is the process of buying and selling of goods and
services in the market on monetary basis and where goods are sold in cash. Business
transaction and exchange are adopted. Today’s modern monetary production system
or economy depends upon this process. Each kind of exchange activities are made
possible as money is comfortable and acceptable for all. But money cannot be
reliable mean in each society. In such situation people get goods through
exchange. In some societies, labor has been
major base or tool of exchange.
4.Consumption:
In economy, the propose of production of each goods and
services is for consumption. Consumption means the use of goods or services as
per human needs and satisfactions. The use of goods and services itself is
consumption. The level of consumption is increased if goods and services are
produced considering, the demand, desires and necessities of the concerned
communities. The role of individual, society and state is important in easing
the livelihood system of people raising the socio-economic status of people
through the consumption of available resources and means at the community.
Economic Role and Social
Significance of Household Level Institution:
The basic unit of each production process is family. Family
and household based division of labor, condition of employment, decision
process, income or earning, entrepreneurship and consumption directly affect
the economy. Household level economic activities and the relationship within it
affect positively to the economy. If there is no discrimination in division of
labor within home, if there is equal possibility of each member participating
within or outside the household activities, such a state contributes positively
to the economy. But gender discrimination, age discriminations, unnecessary expenditures,
religious prohibitions, conservative customs contributes negatively in the
entire economy. However such tendencies are even frequent at the present in our
societies.
Economic activities which are performed through family level
have economic and social significance as well. Household level economic
activities are mainly oriented towards social development, process, unity and
advancement. Household economic activities are limited to house and
communities. They do have significant impacts on the entire society. Family
based production system or income or employment promote self confidence in
society. Progress in the family helps community to be civilized, educated and
alert. Household level agriculture, tailoring, saving, investment, animal husbandry,
division of labor etc, strengthens the entire social welfare.
Economic role and Social Significance of Community level
Institution:
Various communities in societies have various types of
production techniques. They also have their own ways of subsistence patterns.
They have own technique of mobilizing resources and production means, and own
practices. All have an impact in the economy.
Economic activities in a gurung community are preformed
through the rodhi or nogar an indigenous social and economic institution. In this
institution the resources mobilization and community participation are highly
expected. Likewise, labor is consolidated and mobilized as per the requirement,
through which economic, social and political are fulfilled in a socirty. Bheja
in Magar communities, Dhikuri in Tahkali communities, labor exchange (parma)
in Bramin and Chetry communities, Ghuti in Newar communities of Nepal
and through other various institution substance activities have been conducted,
which has also contributed positively in the economy.
Whatever the economy activities held in communities, they
all have social and cultural importance. Such economic activities unite various
families, caste, language, cultures, etc and strength social unity. Cultures,
beliefs, values, religion and customs are applied in economic activities like Parma,
Dhikur, Nogar, Rodhi, Bheja etc. in society. Socio cultural necessities are
fulfilled through such these activities. For example, inn rural areas ‘mother’s
groups’ and similar other institutions
have affected positively to the upliftment of education sector, infrastructure,
forest , and irrigation related activities etc. these activities are performed
on participation, which also focus on lessening of gender decimation, caste decimation,
raising the backward groups, castes, and religions, promoting of mutual
corporation and working together. These are what we call the social
significance of community level economics activities. In rural areas, the
participation of lower caste people has also increased in daily related
activities, which has also helped in decreasing the traditional inequalities. This
is also an example of social development. Likewise, there do not occur sex and
age related decimation in Rodhi and in Bheja resources of a community are mobilized
under the guidance of given community. Any society if considers itself secures,
it obviously promotes social unity and brotherhood, which ultimately leads to
the economic prosperity of that society due to the remarkable participation of
its members.
Economic Role and Social significance of State level
institution:
State level financial institutions, which collect and
mobilize capital, create national capital and an investment friendly
environment. Economic and social development related activities are forwarded
through central and local level state institutions. The availability of acts, rules,
laws, related to economic development, peace and security and investments
obviously contributes to the nation in its way to economic development. In the
countries like ours, the role of state in economic development, stability, good
governance and progress is must. State can never escape from the economic
development related activities. It has the first and the foremost
responsibility in eliminating poverty, inequality and backwardness.
State-led economic activities are the only means of entire
social development and transformation. When a country involves in an economic
revolution, means and resources are widely mobilized and the rate of capital
mobilization and construction also extended. Human are more likely to be
employed, through which their level of education, health, occupation, freedom,
human rights, selection, empowerment, also raised or promoted. The country
through this process moves towards social transformation, social and economic
disparities can be eradicated. Since economic policies affect entire societies,
those policies and programs need to be oriented towards achieving the objective
of social development together with economic development. Economic policies
obviously can be the fundamental bases of social development.