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Understanding Culture, Society, and Politics

Learning Module: Week 11
I. TITLE OF THE LESSON

Economic Institutions
II. INTRODUCTION OR THE OVERVIEW OF THE LESSON
People aspire not only the basic needs but also goods and services that can be attained through collective
effort. This makes economic activity a significant part of life because it influences the size and complexity of
society and the character of its cultural and social life. In this lesson you will understand how economic
institutions cater on the social need for an orderly way of producing and distributing goods and services in
society.
III. OBJECTIVES:
At the end of the module, you should be able to:

1.evaluate economic organization and its impacts on the lives of people in the society.
2. distinguish functions of nonstate institutions in society.
3. assess how functions of education affect the lives of people in society
4. promote primary education as a human right

IV. PRE-TEST

Direction: Define the following terminologies.

1. Economy

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2. Reciprocity
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3.Institution
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4.Organization
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V. DISCUSSION

Economic Institutions
Changes in the means if production as well as the distribution and exchanges of resources and services
strongly affect the overall functioning of society. Through trade relations, ideas and information are spread
and communicated; technology is transferred or diffused from one culture to another; and systems of
standards are formed through intra and inter-state relations (Santarita & Madrid 2016).
Economy is the “social institution that organizes a society’s production, distribution, and consumption of
goods and services” (Macionis 2012: 370). The economy has three sectors (Ibid: 372). The primary sector
relies on raw materials from the natural environment. It is the most important sector in low-income nations.
Examples are agriculture, fishing, and mining.
The secondary sector is the manufacturing sector which transforms raw materials into manufactured goods.
This sector has a significant share of the economy in low-, middle-, and high-income nations. Examples are
automobile and clothing manufacturing. The tertiary sector produces services rather than goods. It is the
dominant sector in low-, middle-, and high-income countries. Examples are call center services, sales, and
teaching.

What is Reciprocity?
Reciprocity is a process of swapping things with other people in order to get mutual benefit. The norm of
reciprocity, often referred to as the rule of reciprocity, is a social norm where if someone does something for
you, you then feel obliged to return the favor.
The socialization process plays a significant role in the progress of this need to reciprocate. Through
experience, children learn to share with others, take turns, and involve in reciprocal actions. Reciprocity plays
a significant role in the development and continuance of relationships. It also plays a significant role in
persuasion or influencing others to adopt certain beliefs or behaviors.
Reciprocity is a transaction between two socially equal parties concerning goods or services that are estimated
to be of equal value. More than economic, these transactions signify social ties being created or strengthened
by the gesture of gift-giving (Haviland, Prins, Walrath, and McBride, 2008). For instance, the dowry given by
the Indian bride to be his prospective groom is equivalent to the wealth possessed by the latter. In the same
way, arranged marriages among the Chinese are not solely a manifestation of equal stature of families in
terms of acquired wealth and properties; it is also about building ties and understanding between business
partners. (Santarita & Madrid 103).

Types of Reciprocity
There are three main types of reciprocity:

 Generalized reciprocity: This form often involves exchanges within families or friends. There is no expectation of
a returned favor; instead, people simply do something for another person based on the assumption that the
other person would do the same thing for them. This type of reciprocity is related to altruism.
( https://www.verywellmind.com/what-is-the-rule-of-reciprocity)
 Balanced reciprocity: This type involves a calculation of the value of the exchange and an expectation that the
favor will be returned within a specified time frame. For example, someone might exchange something they
have, whether it is a skill or tangible item, for something of perceived equal value.
( https://www.verywellmind.com/what-is-the-rule-of-reciprocity)
 Negative reciprocity: This form of reciprocity happens when one party involved in the exchange is trying to get
more about it than the other person. Selling a much-needed item at an inflated price is one example of negative
reciprocity. ( https://www.verywellmind.com/what-is-the-rule-of-reciprocity)

Redistribution
All produce from the community is sent to the center where they are stored, counted, and, later on,
distributed back to the people. It is usually the chief of the community who is in-charge of this process. The

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chief may keep any surplus for various purposes (e.g. give to his or her children; or prepare a feast for a visitor
who is a potential partner in military operations) (Haviland, Prins, Walrath, and McBride, 2008).

Market Exchange
The price of the exchange of goods and services are supposedly dictated by the rules of supply and demand;
however, personal loyalties and moral values intervene in price determination most of the time (Haviland,
Prins, Walrath, and McBride, 2008). Pre-industrial and industrial societies have varying practices of this type of
exchange. In pre-industrial societies have varying practices of this type of exchange. In pre-industrial societies,
trade is done face-to-face, and payment maybe done better through barter (Haviland, Prins, Walrath, and
McBride, 2008). In industrial societies, however, trade may be done face-to-face, virtually, or through a proxy
among others. Money is used in all transactions, and prices are set at monetary value. (Haviland, Prins,
Walrath, and McBride, 2008)

Other non-state Actors

a. Banks and Corporations. According to the online newspaper The Guardian, the word bank is rooted in the
Latin meaning “bench,” referring to the Roman forum where money lenders went to hang out. Both ancient
and modern bankers rely on the confidence of people to trust their ability to acquire “good credit risks from
the bad and deposit money with them in return for interest” (HYPERLINK
http://www.theguardian.com/sustainable-business/history-banking-money-society).
b. Cooperatives and trade unions
According to the article titled “Cooperatives: A Short History,” cooperatives “are organizations of people who
have the same needs. As an organization, cooperatives give importance on democratic processes, such as
voting systems, participation of members in decision-making, and equal sharing of work and benefits.
(Santarita & Madrid, p.85).
c. Transnational advocacy groups
According to authors Margaret E. Keck and Kathryn Sikkink, transnational advocacy networks or groups “are
networks of activists, distinguishable largely by the centrality of principled ideas or values in motivating their
formation.”
D. Development agencies.
During the 1980s and 1990s, development agencies were created in different parts of east Asia to help
countries develop industrially and technologically as well provide settlements to growing populations. Overall,
development agencies help countries achieve economic growth and reduce poverty through investments and
research. (Santarita & Madrid, p.86).
International Organization
Non-state actors include both governmental and non-governmental institutions. International Non-
governmental institutions (INGSOs) are comprised of private individuals and groups. INGOs transcend borders
in pursuit of common causes. (Magstadt, 2013:493) while International Governmental Organizations (IGOs)
refer to a grouping of established states. IGOs are based on treaties, have formal structures, and meet at
regular intervals (Magstadt, 2013:493). Examples of INGOs are peace keeping Forces sent by the United
Nations (UN) to warring states, such as Syria, Sudan,Liberia, as well as the International Red Cross and other
humanitarian teams deployed in areas hit by natural and man-made disasters, such as flood,, tsunami, super
typhoon, fire, and acts of terrorism.(Santarita & Madrid,p. 84).
Sources:
 Santarita &Madrid. (2016). Understanding Culture, Society, and Politics. Quezon City: Vibal Group, Inc.
 Haviland, Prins, Walrath, and McBride, 2008. Anthropology: The Human Challenge (12thed). USA: Thomson
Wadsworth.
 Magstadt, T.M. 2013. Understanding Politics: Ideas, Institutions, Issues (10thed). USA: Wasworth
Cengage Learning.
 https://www.verywellmind.com/what-is-the-rule-of-reciprocity-2795891#:~:text=%20There%20are%20three
%20main%20types%20of%20reciprocity%3A,when%20one%20party%20involved%20in%20the...%20More%20
 Davis, B. (2013, August 21). A brief history of banking: The link between money and society. Retrieved October
02, 2020, from http://www.theguardian.com/sustainable-business/history-banking-money-society

3|Page Understanding Culture, Society, and Politics // Module No. 11

  Macionis, John (2012). Sociology, 14th Edition. Boston: Pearson

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DATE:
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VI. ASSESSMENT
Activity: Part 1
Direction: Fill in the blanks

1. The price of the exchange of goods and services are supposedly dictated by the rules
of___________________________________.

2. ___________________is a process of swapping things with other people in order to get mutual benefit.

3. The ____________________process plays a significant role in the progress of this need to reciprocate.
4. As an organization, _______________________give importance on democratic processes, such as voting
systems, participation of members in decision-making, and equal sharing of work and benefits.
5. Pre-industrial and industrial societies have varying practices of this type of___________________.
6._____________________ happens when one party involved in the exchange is trying to get more about it
than the other person.
7. The word bank is rooted in the Latin meaning “bench,” referring to the __________________where money
lenders went to hang out.
8. In___________________, however, trade may be done face-to-face, virtually, or through a proxy among
others. Money is used in all transactions, and prices are set at monetary value.
9. Balanced reciprocity involves a calculation of the value of the ______________and an expectation that the
favor will be returned within a specified time frame.
10. ___________________is a transaction between two socially equal parties concerning goods or services
that are estimated to be of equal value.
Activity: Part2:
1.What is utang na loob reciprocity?

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2.On what occasions is it experienced?

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3.How have utang na loob practices changed along with the values and norms of Philippine society?

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Reflection:
Essay: How important is this institution to society?

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