Critical Review of the Relationship Between Economy and Society

CRITICAL REVIEW OF THE RELATIONSHIP BETWEEN ECONOMY AND SOCIETY
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Economic and economics are the terms associated with the production, use, and trade of goods and services in a society. Although not used till the advent of the Industrial Revolution, the term economy is as old as human societies as it lays the foundation of human society. Therefore, the economy is related to the immediate experience of an individual, and this feature makes it highly relatable to anthropology. Anthropology is the study of different aspects of humans at the individual and social level by studying their past and present to determine how human societies are formed and which factors led to the grouping of people. In other words, anthropology deals with a comparative analysis of various social and cultural aspects of society.
Since trade and exchange of goods make up an integral part of human interaction and relationships, economic issues cannot be taken as a separate domain as a study suggests that addressing economic problems is such a need of an individual that makes him ignore or compromise all other social relationships (Hausman 1994). Therefore, it is imperative to comprehend the nature, dynamics, and effects of the relationship between anthropology and economics to formulate a better way of dealing with economic and social issues and problems. Therefore, the following paragraphs substantiate the significance of economics for making a better society and social life using scholarly research studies and practical information.
Understanding economics and its influence is mandatory for realizing its impact on human societies as the economy is an essential part of the working and progress of a society since it deals with fulfilling the basic needs of human beings. Since human needs necessitate their relationship with other humans and even animals, economic and economic choices indirectly determine their attitude and relationship with people (Rabie 2016). Furthermore, another economist discusses the dynamics of economics and explains that an economy, whether in ancient times or today’s world, comprises a network of many entrepreneurial ventures, mostly privately owned (Nijkamp 2003). Another critical aspect of the economy is that it is based on the principle of self-interest on the part of both consumer and producer, as they tend to ignore many other relationships for fulfilling their economic needs (Hausman 1994).
In a recent study conducted to understand and evaluate the productivity challenges that the economies of the UK and Ireland are facing, a scholar points out this very aspect of the economy and claims that understanding people, their needs, and potentials are essential for a productive economy. This finding underscores that people and their activities are the yardsticks to assess the impact of the interaction between the economy and society. For one economist, the economy is inherently hierarchical as it involves an intricate network of the decision made by various people at various levels; therefore, it is a collective process. Furthermore, because of its hierarchal nature, it involves a wide array of people, including starting from families, all the way to large corporations and governments. Consequently, the scholar argues that culture and human history significantly shape the outlook of a country’s economy (Kenton 2014).
In ancient times, people were involved in agricultural-based economic activities using simple tools and domestic techniques to produce goods and services; consequently, their relationship with each other depended on these economic activities. In the same way, people were primarily engaged in the exchange of goods as means of trade, better known as the barter system and also leather money; however, the invention of coins in Lydia in around 600 BCE transformed the dynamic and working of economics. However, the Industrial Revolution brought about remarkable changes in these economic practices, and the subsistence farming that involved farming to fulfill one’s own needs was replaced by commercial farming. Indeed, the transformation of farming to commercial farming represents the significance of the economy to the life of people (Little et al. 2014).
In the pre-industrial era, sociology and capitalism emerged as two distinct forms of economies. Socialism is based on the economic system in which a state owns the goods and services produced by people; on the other hand, capitalism is based on privately owned enterprises that compete with each other for financial gains (Kornai 2000). However, based on its direct engagement with people, capitalism is the most popular economic system in the world. Most significantly, capitalism is the type of economic practice that determines the extent and role of the economy in people’s lives. The capitalist economic model has undergone some transformation, and now it is mostly a “market economy”; this form of economy is prevalent in all modern societies, and it is characterized by the significant role of people in the form of consumers and producers to determine the nature of goods and services to be sold and purchased (Kenton 2014). The market economy better determines the economic effect on people’s lives and vice versa.
Since the above discussion establishes that economics is deeply rooted in people’s lives both at the individual and social level, it is crucial to understand people and their existence under the lens of anthropology. According to anthropologists, personhood refers to a person’s specific identity, and it is changeable under changing circumstances. Because of this changeable human nature, anthropologists have coined the term “dividual” for those people whose life is dependent on their ties with other people (Carsten 2004). Extrapolating this concept to the economics of society further clarifies that a person serves both as a consumer and a producer in one way or other in society, and this fact endorses his society’s reliance on the economy.
Numerous studies were undertaken to verify the role of the economy in human society endorse this reality; for instance, in his book, Archaeology, Economy and Society, David Hinton analyzes historical and archeological evidence to understand the relationship between the economy and society of England before and during the Renaissance. Using the evidence of ancient coins used during the Roman Era, he discusses that the coins made during the Roman Era could not be tran...