Chapter 18

Economic Institutions

• MarketAn economic institution that regulates exchange behavior through the establishment of different values for particular goods and services.

• TechnologyTools, procedures, and forms of social organization that increase human productive capacity.

• Multinational corporationAn economic enterprise that has headquarters in one country and conducts business activities in one or more other countries.

• MercantilismAn economic philosophy based on the belief that the wealth of a nation can be measured by its holdings of gold or other precious metals and that the state should control trade.

• Laissez-faire capitalismAn economic philosophy based on the belief that the wealth of a nation can be measured by its capacity to produce goods and services (i.e., its resources of land, labor, and machinery) and that these can be maximized by free trade.

• SocialismAn economic philosophy based on the concept of public ownership of property and sharing of profits, together with the belief that economic decisions should be controlled by the workers.

• Democratic socialismAn economic philosophy based on the belief that private property may exist at the same time that large corporations are owned by the state and run for the benefit of all citizens.

• Welfare capitalism An economic philosophy in which markets determine what goods will be produced and how, but the government regulates economic competition.

• AlienationThe feeling of being powerless to control one’s own destiny; a worker’s feeling of powerlessness caused by inability to control the work process.

• ProfessionAn occupation with a body of knowledge and a developed intellectual technique that are transmitted by a formal educational process and testing procedures.