Economies

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Economies are defined by how resources are managed to meet the individual and collective needs of society; both the products, that is to say, the material needs like clothes and food, and the services or immaterial needs like education, health and leisure. It speaks of one kind of economy or another, depending on the foundations on which its resource management is based. It is also important to note that these foundations depend on the objectives pursued by the groups or individuals responsible for economic decisions. In contemporary times, for several authors, the functioning of economies requires a basic institution − the market − which includes all organisations that buy and sell products and the services produced, because it connects consumers with producers. The markets may be small-scale (local) or large-scale (international). Globalisation has contributed to the development of these markets which are guided by logic of capitalism rationale, with neoliberal policies that have led to a context of social insecurity and inequality between countries. Therefore, the market is only a way to organise an economy that, in a general definition, could be seen as the set of operations of production, distribution and consumption of goods and services. These processes are always social facts. As Polanyi [1] claimed, an economy is "an institutionalized interaction between humans and their environment that facilitates sustainable provision of material goods to satisfy their wishes" (Polanyi[2]). In consequence, the activities related to serving the appropriation of material and immaterial goods is an economy, independently of whether it is managed by official markets − a formal economy − or by the activities of people – an underground economy.

References

  1. Karl Polanyi, For a New West: Essays, 1919-1958 (Polity Press, 2014)
  2. https://en.wikipedia.org/wiki/Karl_Polanyi