3 theories of economic elegance essay

As early as Old Greeks known between ‘superiors’ and ‘inferiors’ and the second option were thought to be slaves who were happy to work under the direction and for the benefit of the former (1, 2005).

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Still splendour remains a concern of the day and share rise to numerable arguments. Though conditions have changed(for example, John Elizabeth. Farley uses ‘majority’ and ‘minority’), a single cannot deny the existence of inequality between different racial, ethnic and other groups of society in US and abroad (2, 2005).

However , the approach started to be more humane and they have grown in food for scientists’ thoughts.

From the economic point of view the first make an effort to formulate the idea of discrimination is related to Gary Becker, a mentor of Chi town University and the Nobel Reward winner in Economic Sciences of 1992. Having been the leading in dealing with the recently solely sociological issues and among them was racial elegance. His work revolves around four major points, namely: investments in man capital, patterns of the family, crime and punishment, plus the last but not the least elegance on the market segments for labor and products (3, 2005).

At the heart of the Becker’s theory lies the idea that the behavior of a human being as an individual may be referred to in the form of a lot of principles that are common to several different from economic climate spheres.

A vivid sort of application of these kinds of theory is usually Becker’s research of discrimination regarding competition, sex, and so on that ids expounded in the Book beneath title The Economics of Discrimination, 1957. According to Becker elegance is “a situation in which an economic agent is ready to incur an expense in order to stay away from an economic purchase, or from entering into an economic contract, with someone who is characterized by attributes other than his/her own with respect to race or sex (3, 2005). In other words, it appears to the ‘discriminating agent’ that he overpays the so-called ‘discriminated agent’ for the goods and providers he receives reasoning through the fact that these belongs to a different sort of race or sex and consequently his labor should be paid out less.

However , in reality the worker receives less than he needs to be and consequently both parts will be dissatisfied. All in all, such elegance is unprofitable not only to those people who are the object of discrimination yet also to those who become a subject. Furthermore, the science tecnistions dwells on the fact that many people promote elegance by following some personal preferences when making their choice about that will fill in a good high-paid location

. As in the prior cases this individual concludes that such discrimination is harmful for both the employer and for the society. The sole part that profits simply by such circumstance is white-colored workers charged with better jobs and receiving higher pay(2, 2005). Nevertheless, if race but is not the productivity serves as a criterion pertaining to engagement the employercan obviously gain lower income.

Summing up, Becker disputes splendour and shows its inefficiency and inapplicability to organization.

An additional theory referred to as split labor market theory (a issue theory) shows that elegance is a product of rarely ever a contemporary society but of individual tastes and competing interest groupings (for occasion, the abovementioned white workers)(2, 2005). In the frameworks of this theory market is divided and associates of certain ethnic teams are limited to obtain jobs with higher pay. The process may take place when different ethnic teams (white workers) have enough capacity to demand the exclusion of minority employees from the most profitable jobs (2, 2005). However , this kind of behavior could be easily discussed as many labor costs more and they can be discriminated except if they strive for their rights (though for the prejudice of minority).

According to Bonacich, there are three key groups in a capitalist market: businesspeople (employers), higher-paid labor, and cheap labor, and each group receive the suitable wage level (4, 2005). Influx of immigrants puts at risks jobs and earnings of local staff and they turn into “the pressure behind inhospitable and exclusionary movements directed at curtailing the original source of cheap labor (4, 2005). In addition , splendour is not limited to operating places simply but also includes education probabilities and even host to residence. Nevertheless, although in the short term this kind of approach even now works, however in the long term it may lead to several sudden converts.

The sameFarley states that Marxist theory like the divide labor theory is conflict-situated (2, 2005). Yet, it differs from the split labor theory in definition of the part that benefits from discrimination. It claims not white employees but capitalists profit. As the work force is by itself partitioned the racial splendour only undermines the labor movements. Thus, by mutual hostility between white and black functioning classes they do not see their common adversary (the capitalists) and simply cannot protect their own interests.

Marx’s model contains a form of cultural classes: the ruling class (those having access to stocks of materials and capital gear and possessing power) and the working category who promote their labor in exchange for material goods. Marx contends that capitalism is the simply evil through obtaining the “factors of production, the capitalist considers the “labor market as a component part of the basic market for commodities (by his description ‘goods intended for sale’) (4, 2005). Even though the advantage of his theory is the fact he does not make ethnicity and cultural differences, the disadvantage is that he aggravates the conflict among employers and employees.

To cut the long tale short, each one of the described 3 theories dwell on economic relationships between persons of different competitions, sex, etc . Though they will admit presence of elegance they clarify it since, for instance, the consequence of some preferences of those who have hire(Becker’s theory) and admit it detrimental impact on business.

Another theory referred to as the split labor theory rejects he ‘taste of discrimination’ and clarifies its presence by conflict between interest groups, the so-called fraction and majority with the aim of gaining (or retaining) better-paid working places. Furthermore, this theory goes beyond just labor market and touches upon education and residence concerns as well. In fact , it does not disapprove discrimination but foresees some their negative long term consequences.

As to the third theory, which belongs to Marx, its common with the previous 1 feature is that it is conflict-situated. However , it focuses not on ethnicity discrepancies but on the social and offers label of the world into two classes: the ruling plus the working. And according to the theory the two black and light working people need to unite to fight against their common enemy ” the capitalist.


  1. Theories of Discrimination. Gathered on September 4, june 2006 from http://www.delmar.edu/socsci/rlong/race/far-10.htm
  2. John Electronic. Farley. Majority-Minority relations, 5th edition, june 2006.
  3. Gary H. Becker. Recovered on Sept. 2010 4, june 2006 from

Competition and split labor market theories. Retrieved on September 5, 2005 by http://www.findarticles.com/p/articles/mi_qa3719/is_199707/ai_n8766176


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