Explain the term Economic Institutions and also give types of Economic systems.

Economic institutions cater to the survival needs of community, every society and community develops ways of coping with everyday situations of life. Social institutions are nothing but patterned arrangements and networks which attend to everyday survival needs.

The economic institutions are built around the survival needs of a society. Different societies have come up with different economic systems which address the three .aspects of any economic. system the production of goods and services, the distribution of these if there is surplus and the consumption of the goods, and services.

Family, which is viewed by sociologists and anthropologists as one of the primary and elementary institutions has largely been supplemented and even replaced by institutions of economy and polity.

For the vast major of human history, the family was the economy, the polity, the religious system, health care system, a socialization and educational system and so on. The other institutions began to emerge as separate and distinct from the role family was

Types of Economic Systems:

The different types of economic systems that we will discuss are broad generalizations, in reality they are much more complex and mixed and in a world which is increasingly interconnected there is no pure type for purposes of understanding we would present the following types:

Hunting and Gathering Economy: 

The most basic level of economic development, with the simplest division of labor, is the hunting and gathering economy. By division of labor, we mean economic specialization of society’s task, each of these tasks is connected with other related tasks.

In the hunting and gathering economies there is no cultivate on and no manufacturing. People obtain their survival necessities directly from nature. The men usually hunt and women gather fruits, roots etc.

These societies are organized in small bands of people, about 15 to 30 The small. size of such societies is only by the nature of their economy Hunting and gathering clan support only a limited number of people, at subsistence level, producing enough food, clothing shelter to be able to survive.

There is no surplus in other words there is nothing left after people Meet their basic deeds. Hunting and gathering societies are often nomadic.

Once they use up the available resources in one place they move onto another place, usually within a limited range. Since hunting, gathering societies have a limited degree of specialization of tasks or discussion of labor, the band or clan had a greater degree of similarity, of experience. Therefore, there is a greater level of consensus and community participation in all aspects of life, Also ownership is communal.

From the origin of human societies several million years ago, roughly around 10,000 B.C. all societies had hunting and gathering economies. Today there are few societies Which practice hunting and^–gathering, even if they do, they have introduced new techniques and influences from the larger world around them Some of the best: examples of hunting gathering societies is the Bush People of Kalahari Desert.

Pastoral and Horticultural Economy:

 When small societies learned the more complex Mechanism of sowing seeds and growing plants and breading animal’s that they could domesticate and breed herds of them, they were in a position to enter a new phase the pastoral phase. This phase involved cultivation on a small scale, usually gardens, for immediate, limited subsistence level consumption.

The technology used  was very simple primarily human power and hand tools such as hoes and plows that are more Often pushed by a person. The other aspect of this economy is the herding of live stock, These tasks of growing plants and raising animals obviously involved a fair amount of settled life.

Among the pastoral list there are the nomadic varieties that follow a seasonal migration pattern that can vary from years to years. The time and destination of emigration are determined primarily by the needs of herd animals for water and fodder.

These, nomadic, Societies do not Create permanent settlements but they live in tents or other relatively easily constructed dwelling year round. The pastoral society is larger than a hunting gathering society but relatively smaller. The division of labor is little, based on age and Sex as in the hunting gathering societies.

Agrarian Economy : 

Many social scientists and experts believe that cultivation of crops probably started in an agrarian economy, where cultivation of crops took primacy over hunting and gathering for food. This is accompanied by technological innovations such as metal tools, the invention of the plough using animal’power to tilling of the land.

In agricultural societies permanent settlement are the rule. Sufficient food surplus can be produced to feed larger groups. Thus agrarian societies are organizationally more complex with definitive hierarchical structures. With more surplus food available some members of the society were free to pursue other occupations like weaving, pottery, metalwork, etc.

Agrarian economies made, it possible for towns and cities to develop and for full time crafts people and traders to emerge. There was also sufficient production to support a ruling class as well as a range of specialized occupations including administrations, soldiering and scholars. Many eminent civilizations were agrarian societies. Ancient Rome was bustling city with links to distant points by trade routes both by land and sea.

Industrial Economy: 

During the last 200 or more years, the changes  that have taken place in social organization and economic systems have been The shift was machines replacing human and animal power.

The replacing of hand labor with power driven machinery and the economic and the social change the resulted from this is known as industrial Revolution. Various path breaking innovations such as the steam engine, spinning jenny, among others, made possible mechanized production on a large scale to meet needs of the masses of people.

From England, industrialization spread to Europe and other parts of the world. Since the power driven machinery had to be stationed at a particular place, as they were huge, there arose the factory system.

The factory is a place where workers could assemble at one place and work on the machine. The cost, size and complexity of this machinery made it unsuitable for the earlier system of scattered production in small shops and homes.

The factory system had many consequences: 

A new class of factory workers emerged. These workers had a different relationship with factory owners and their employees, which was impersonal and detached. In contrast to hand production, which had individual touch and interpretation, factory production was standardized. Standardization made it possible from parts to be easily replaceable, leading to assembly line production, where different parts were produced by different workers and then assembled together.