ABSTRACT
Economic institutions are both cultural and social systems. They are social systems because people hold specific statuses and play the roles corresponding to those statuses. The economies of the Western world are mostly modified capitalist, mixed-market economies. Their roots go back to a momentous transformation that occurred in Western Europe as it was emerging from the Middle Ages. The American labor force was a heterogeneous lot, representing different ethnic, cultural, religious, and racial backgrounds that were usually mutually incompatible and suspicious of each other. International trade and an open economy allow the United States to specialize, focusing on specific products, and, thus, increase productivity. In addition, nations have tried to reduce protectionism by creating regional free-trade zones, such as the European Union and the North American Free Trade Agreement (NAFTA). These trading blocs have been successful despite fears that they would hurt American workers.
