Family economy

Last updated

The term Family Economy can be used to describe the family as an economic unit. The early stages of development in many economies are characterized by family based production. [1]

"In the early, pre-industrial stage, technology was limited and unchanging. Most economic activity took place within the household, and production and distribution were organized by custom and tradition. High mortality rates and low productivity meant that on the farms and in the towns life was short and living conditions were harsh – an existence which was accepted fatalistically. In this society the family played a central role, since economic and social status was defined by birth, family ties, and local custom. Most importantly, the family was a productive unit, and physical strength – typically a male attribute – was an essential element in survival." [2]

The family economic unit has always been dependent on specialized labor done by family members. The family was a multi-generational producer with capital and land provided by older generations and labor provided by younger generations. Goods were produced not only for home consumption but to sell and trade in the market as well. Family production was not only limited to agricultural products but they also produced manufacturing goods and provided services. [3]

In order to sustain a viable family economy during the pre-industrial era labor was needed. The labor needed to operate the farm and provide old-age support came from family members, fertility was high. High fertility and guaranteed employment on the family farm made education, beyond the basic literacy needed to read the Bible, expensive and unnecessary. [4]

Around the time of the post industrial stage, the European family changed from a unit of production to a unit of consumption. The new era of industrialization that Europe now found itself in brought numerous change to Europe. Now farming could be done with less individuals, removing the need for children as economic assets and instead created a view in which they were seen as liabilities. In addition to this, new ideas and inventions that allowed for the Industrialization to take place further contributed to the demise of the family economy. The new social norms saw a capitalist market that encouraged production in large scale factories, farms and mines. Wage labor would become a staple of European society and saw family members no longer working together but instead using their wages they had earned to buy goods which they consumed as a family unit. [5] The industrial revolution, starting in the nineteenth and going into the twentieth century, is seen as the force that changed the economic family and is basically responsible for the "modern family."

Further reading

Nussbaum, M. (2000) Women and Development: The Capabilities Approach, Cambridge University Press, New York.

Paarlberg, Don. "The Future of the Family Farm." The Saturday Evening Post. March 1976, pp. 42–43.

Related Research Articles

<span class="mw-page-title-main">Rural flight</span> Migratory pattern of people from rural to urban areas

Rural flight is the migratory pattern of people from rural areas into urban areas. It is urbanization seen from the rural perspective.

<span class="mw-page-title-main">Import substitution industrialization</span> Trade and economic policy

Import substitution industrialization (ISI) is a trade and economic policy that advocates replacing foreign imports with domestic production. It is based on the premise that a country should attempt to reduce its foreign dependency through the local production of industrialized products. The term primarily refers to 20th-century development economics policies, but it has been advocated since the 18th century by economists such as Friedrich List and Alexander Hamilton.

<span class="mw-page-title-main">Industrialisation</span> Period of social and economic change from agrarian to industrial society.

Industrialisation (UK) or industrialization (US) is the period of social and economic change that transforms a human group from an agrarian society into an industrial society. This involves an extensive reorganisation of an economy for the purpose of manufacturing. Industrialisation is associated with increase of polluting industries heavily dependent on fossil fuels. With the increasing focus on sustainable development and green industrial policy practices, industrialisation increasingly includes technological leapfrogging, with direct investment in more advanced, cleaner technologies.

In demography, demographic transition is a phenomenon and theory which refers to the historical shift from high birth rates and high death rates in societies with minimal technology, education and economic development, to low birth rates and low death rates in societies with advanced technology, education and economic development, as well as the stages between these two scenarios. In economic growth, the demographic transition has swept the world over the past two centuries, and the unprecedented population growth of the post-Malthusian period was reversed, reducing birth rates and population growth significantly in all regions of the world, and enabling economies to translate more of the gains of factor accumulation and technological progress into per capita income growth. The demographic transition strengthens economic growth process by three changes: (i) reduced dilution of capital and land stock, (ii) increased investment in human capital, and (iii) increased size of the labor force relative to the total population and changed age population distribution. Although this shift has occurred in many industrialized countries, the theory and model are frequently imprecise when applied to individual countries due to specific social, political and economic factors affecting particular populations.

<span class="mw-page-title-main">Subsistence agriculture</span> Farming to meet basic needs

Subsistence agriculture occurs when farmers grow crops to meet the needs of themselves and their families on smallholdings. Subsistence agriculturalists target farm output for survival and for mostly local requirements. Planting decisions occur principally with an eye toward what the family will need during the coming year, and only secondarily toward market prices. Tony Waters, a professor of sociology, defines "subsistence peasants" as "people who grow what they eat, build their own houses, and live without regularly making purchases in the marketplace".

<span class="mw-page-title-main">People's commune</span> Former rural administrative division of the Peoples Republic of China (1958-83)

The people's commune was the highest of three administrative levels in rural areas of the People's Republic of China during the period from 1958 to 1983, until they were replaced by townships. Communes, the largest collective units, were divided in turn into production brigades and production teams. The communes had governmental, political, and economic functions during the Cultural Revolution. The people's commune was commonly known for collectivizing living and working practices, especially during the Great Leap Forward. The scale of the commune and its ability to extract income from the rural population enabled commune administrations to invest in large-scale mechanization, infrastructure, and industrial projects. The communes did not, however, meet many of their long-term goals, such as facilitating the construction of socialism in the rural areas, liberating women from housework, and creating sustainable agriculture practices in the countryside. They ranged in number from 50,000 to 90,000.

In the mid-1980s, Communist Czechoslovakia was prosperous by the standards of the Eastern Bloc, and did well in comparison to many richer western countries. Consumption of some goods like meat, eggs and bread products was even higher than the average countries in Western Europe, and the population enjoyed high macroeconomic stability and low social friction. Inhabitants of Czechoslovakia enjoyed a standard of living generally higher than that found in most other East European countries. Heavily dependent on foreign trade, the country nevertheless had one of the Eastern Bloc's smallest international debts to non-socialist countries.

The Rostovian take-off model is one of the major historical models of economic growth. It was developed by W. W. Rostow. The model postulates that economic modernization occurs in five basic stages, of varying length.

  1. Traditional society
  2. Preconditions for take-off
  3. Take-off
  4. Drive to maturity
  5. Age of High mass consumption
<span class="mw-page-title-main">Economic history of France</span> French economic history from the Middle Ages

The economic history of France involves major events and trends, including the elaboration and extension of the seigneurial economic system in the medieval Kingdom of France, the development of the French colonial empire in the early modern period, the wide-ranging reforms of the French Revolution and the Napoleonic Era, the competition with the United Kingdom and other neighboring states during industrialization and the extension of imperialism, the total wars of the late-19th and early 20th centuries, and the introduction of the welfare state and integration with the European Union since World War II.

Capitalism is an economic system based on the private ownership of the means of production, and their operation for profit. Other characteristics include free trade, capital accumulation, voluntary exchange, and wage labor. Its emergence, evolution, and spread are the subjects of extensive research and debate. Debates sometimes focus on how to bring substantive historical data to bear on key questions. Key parameters of debate include: the extent to which capitalism is natural, versus the extent to which it arises from specific historical circumstances; whether its origins lie in towns and trade or in rural property relations; the role of class conflict; the role of the state; the extent to which capitalism is a distinctively European innovation; its relationship with European imperialism; whether technological change is a driver or merely a secondary byproduct of capitalism; and whether or not it is the most beneficial way to organize human societies.

Some economic historians use the term merchant capitalism, a term coined by the German sociologist and economist Werner Sombart in his "The Genesis of Modern Capitalism" in 1902, to refer to the earliest phase in the development of capitalism as an economic and social system. However, others argue that mercantilism, which has flourished widely in the world without the emergence of systems like modern capitalism, is not actually capitalist as such.

The economic history of China describes the changes and developments in China's economy from the founding of the People's Republic of China (PRC) in 1949 to the present day. The speed of China's transformation in this period from one of the poorest countries to one of the world's largest economies is unmatched in history.

The Five-Year Plans of Vietnam are a series of economic development initiatives. The Vietnamese economy is shaped primarily by the Vietnamese Communist Party through the plenary sessions of the Central Committee and national congresses. The party plays a leading role in establishing the foundations and principles of communism, mapping strategies for economic development, setting growth targets, and launching reforms.

<span class="mw-page-title-main">Economy</span> Area of production, distribution, trade of, and consumption of goods and services

An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the production, use, and management of resources. A given economy is a set of processes that involves its culture, values, education, technological evolution, history, social organization, political structure, legal systems, and natural resources as main factors. These factors give context, content, and set the conditions and parameters in which an economy functions. In other words, the economic domain is a social domain of interrelated human practices and transactions that does not stand alone.

<span class="mw-page-title-main">Great Divergence</span> Period/event in European history

The Great Divergence or European miracle is the socioeconomic shift in which the Western world overcame pre-modern growth constraints and emerged during the 19th century as the most powerful and wealthy world civilizations, eclipsing previously dominant or comparable civilizations from the Middle East and Asia such as Qing China, Mughal India, the Ottoman Empire, Safavid Iran, and Tokugawa Japan, among others.

Family economics applies economic concepts such as production, division of labor, distribution, and decision making to the family. It is used to explain outcomes unique to family—such as marriage, the decision to have children, fertility, time devoted to domestic production, and dowry payments using economic analysis.

<span class="mw-page-title-main">Industrialization in the Soviet Union</span>

Industrialization in the Soviet Union was a process of accelerated building-up of the industrial potential of the Soviet Union to reduce the economy's lag behind the developed capitalist states, which was carried out from May 1929 to June 1941.

<span class="mw-page-title-main">Periphery countries</span> Less developed, poorer nations in world-systems theory

In world systems theory, the periphery countries are those that are less developed than the semi-periphery and core countries. These countries usually receive a disproportionately small share of global wealth. They have weak state institutions and are dependent on — and, according to some, exploited by — more developed countries. These countries are usually behind because of obstacles such as lack of technology, unstable government, and poor education and health systems. In some instances, the exploitation of periphery countries' agriculture, cheap labor, and natural resources aid core countries in remaining dominant. This is best described by dependency theory, which is one theory on how globalization can affect the world and the countries in it. It is, however, possible for periphery countries to rise out of their status and move into semi-periphery or core status. This can be done by doing things such as industrializing, stabilizing the government and political climate, etc.

<span class="mw-page-title-main">Mexican miracle</span>

The Mexican miracle is a term used to refer to the country's inward-looking development strategy that produced sustained economic growth. It is considered to be a golden age in Mexico's economy in which the Mexican economy grew 6.8% each year. It was a stabilizing economic plan which caused an average growth of 6.8% and industrial production to increase by 8% with inflation staying at only 2.5%. Beginning roughly in the 1940s, the Mexican government would begin to roll out the economic plan that they would call "the Mexican miracle," which would spark an economic boom beginning in 1954 spanning some 15 years and would last until 1970. In Mexico, the Spanish economic term used is "Desarrollo estabilizador" or "Stabilizing Development."

Soviet-type economic planning (STP) is the specific model of centralized planning employed by Marxist–Leninist socialist states modeled on the economy of the Soviet Union (USSR).

References

  1. Parente, S.L., Rogerson, R. & Wright, R., (2000). Homework in Development Economics: Household Production and the Wealth of Nations. Journal of Political Economy, 108, 680-687.
  2. Ross, H. L., Sawhill, I.V.(1977).The Family as an Economic Unit. The Wilson Quarterly,1,2.Retrieved from: https://www.jstor.org/stable/40255183
  3. Sellers, C.(1991). The Market Revolution: Jacksonian America, 1815-1846 Oxford University Press, New York.
  4. Carter, S.B., Ransom, R.L., & Sutch, R.(2003). Family Matters: The Life-Cycle Transition and the Unparalleled Fertility Decline in Antebellum America. In Craig, L.(Ed.), To Sow One Acre More(pp. 107-113)Johns Hopkins University Press, Baltimore
  5. Ruggles, S. (2001). Living Arrangements and the Well-being of Older Persons in the Past, Population Bulletin of the United Nations, 42/43, 111-161