Effect of Economy on Culture and Social Structure

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Table of Contents

Introduction
Economic structure and culture
Conclusion
References

Introduction

As societies grow, community members and local officials are continually confronted by the desire to balance social, fiscal, environmental, and economic goals. They face the challenge to decide on the amount and forms of the new development that the society can confront so that not to put lives of the members of the community at risk.

Thus, “socio-economic impact evaluation is intended to assist societies in decision making, which in turn promotes long-range sustainability, economic prosperity, social well-being and a healthy community” (Edwards, 2009).

Social structure, particularly in social networks, influences economic results for three major reasons. First, the social networks determine the quality and flow of information. Most information is nuanced, subtle and hard to confirm. For this reason, players do not consider impersonal sources but rather rely on individuals they are familiar with. Second, social networks are a vital source of conducting evaluation.

This is of importance because the significance of punishment or reward is frequently magnified based on their effect if they come from known persons. Finally, trust emerges in the context of a social network. Thus, in today’s world, any issues tied to economics play a major role in shaping the notions of culture and social structural frameworks in the society (Granovetter, 2005).

Economic structure and culture

Economic models naturally presume that employees choose work searching for benefits and costs that are levelled at margin. However, in any actual labour market, social networks have a major role. Potential employees and employers desire to learn from each other, i.e. from individual sources which have information that they trust such as social capital (Granovetter, 2005).

Social interaction transmits information on employees, employers and jobs which flows constantly through the social networks. These networks are maintained by many people largely for the non-economic reasons. Normally, people make use of existing social networks and contacts, meaning that there usually is no need for making any financial investment in such networks.

This reduces the costs below prescribed intermediaries. Pre-existing social networks are unequally distributed in various directions leading to unequal playing ground in labour markets without engaging any player (Granovetter, 2005).

Models of economy also feature productivity of the personal attributes that can be changed through learning. However, one’s place in any social group may have a vital influence on the productivity, for many reasons.

First, many tasks can only be accomplished through a serious collaboration from others, second is that several tasks are too complicated and delicate to be carried out “by book” and need “tacit knowledge” exercise suitable only though interacting with knowledgeable individuals.

Since good interaction with one another is vital, this means that those joining the company through individual contacts become leaders and more productive, as well as avoid errors that may hold-up the outsiders (Granovetter, 2005).

Individuals do trade with each other and the effect of knowing one another in terms of price differs with their association, the shifting of cost to various partners and market circumstance. To comprehend how variations from equilibrium price might occur, one should evaluate both economics and sociology of circumstance.

A change of the trading partners is less or more hard under varying situations and relies on noneconomic and economic costs of separating long-time ties along with available social options. Therefore, the economic elasticity of the structure relies on social construction of trade relations and is unpredictable without the knowledge of that social structure (Granovetter, 2005).

Conclusion

The models of economy may be simplified if relations of economy with the non-economic features of the social life stay inside the black box; such strategy conceptualizes from several social occurrences that strongly influence costs and the existing techniques of the economic actions. Eliminating such occurrences is risky when prediction is the main goal.

References

Edwards, M. (2009). Socio-economic impact analysis. Community Guide to Development Impact Analysis. Web.

Granovetter, M. (2005). The impact of social structure on economic outcomes. Journal of Economic Perspective. 19(1): 33-50.

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Effect of Economy on Culture and Social Structure

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