TEXT 3

The relationship between the home and market economies has gone through two distinct stages. Early industrialization began the process of transferring some production processes e. g. cloth-making, sewing and canning foods) from file home to the marketplace. Although the home economy could still produce these goods, the processes were laborious and the market economy was usually more efficient. Soon, the more important second stage was evident--the marketplace began producing goods and services that had never been produced by the home economy, and the home economy was unable to produce them (e. g. electricity had electrical appliances, the automobile, advanced education, sophisticated medical care). In the second stage, the question of whether the home economy was less efficient in producing these new goods and services was irrelevant; if the family were to enjoy these fruits of industrialization they would have to be obtained in the marketplace. The traditional way of taking care of these needs in the home, such as in nursing the sick, became socially unacceptable ( and, in most serious cases, probably less successful). Just as the appearance of the automobile made the use of the horse-drawn carriage illegal and then impractical, and the appearance of television changed the radio from a source of entertainment to a source of background music, so most of the fruits of economic growth ’did not increase the options available to the home economy to either produce the goods or services or purchase them in the market. Growth brought with it increased variety in consumer goods, but not increased flexibility for the home economy in obtaining these goods and services. Instead, economic growth brought with it increased consumer reliance on the marketplace. In order to consume these new goods and services, the family had to enter the marketplace as wage earners and consumers. The neoclassical model that views the family as deciding whether to produce goods and services directly or to purchase them in the marketplace is basically a model of the first stage. It cannot accurately be applied to the second (and current) stage.

During the second stage, if the family wanted to consume new goods and services, they had to enter the marketplace ______.