The Economy and Politics Chapter 13 The Economy

The Economy and Politics Chapter 13

The Economy and Politics The Economic Institution • Everybody has needs (such as food and water) and wants (such as a new car or stereo). • Every society creates a system of roles and norms that governs the production, distribution, and consumption of goods and services. This system is called the economic institution. • People’s needs and wants are unlimited, but resources are limited. Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Economic Institution • Three questions of an economy: –What goods and services should be produced? –How should these goods and services be produced? –For whom should these goods and services be produced? • Answers depend on the factors of production, or resources needed to produce goods and services (such as land labor). Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Economic Institutions Basic Sectors • Primary sector: extracting raw materials from the environment • Secondary sector: use of raw materials to manufacture goods • Tertiary sector: providing services Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Economic Institution Industrial Societies • Advances in technology helps move focus to secondary sector • Higher levels of agricultural production allows for more people • Job specialization increases Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Economic Institution Preindustrial Societies • Very little technological development • All economic activity carried out by human and animal labor • Focuses on primary sector Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Economic Institution Postindustrial Societies • Focus is on tertiary sector • Greater emphasis placed on knowledge and the collection and distribution of information Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Economic Institution Capitalism • Capitalism: Factors of production owned by individuals; profit and competition regulate activity o Law of supply: Producers will supply products with high profit o Law of demand: Demand will increase as the price decreases • Laissez-faire capitalism: No government regulation • Free-enterprise systems: Limited government control of business Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Economic System Socialism • Socialism: Factors of production owned by the government; government regulates economic activity • Economic activity controlled by social need and central governmental planning • Ideal communism is a political and economic system in which property is communally owned and social classes cease to exist Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Economic System All economies fall somewhere in between these two idealized systems. Over time, economies have moved toward the center of this continuum (these are known as mixed economies). Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Economic System Rise of Corporate Capitalism • Corporation: A business organization owned by stockholders and treated by law as if it were an individual person • Oligopoly: A few large companies control an industry • Protectionism: The use of trade barriers to protect domestic manufacturers from foreign competition • Free trade: Unrestricted trade between countries Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Economic System Globalization of Corporate Capitalism • Multinational: A corporation that has factories and offices in several countries • Generally headquartered in one country • Some large multinationals have a bigger economy than some poor nations • Some sociologists see global capitalism as the decline of nation-states Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Economic System The Changing Nature of Work • In the United States, work has shifted from an industrial base to a service base. • Companies have cut costs by moving jobs to other countries and by eliminating jobs. • The service sector has not absorbed displaced workers Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Economic System E-commerce • Business conducted over the Internet • Internet allows companies to automate many purchases • Internet allows customers to purchase at home • Concerns about personal information and keeping it safe Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics Recent Developments Trouble Ahead? • Challenges include government debt, Social Security system, subprime mortgage crisis, and rising fuel prices • About half of Americans carry debt on a credit card, with an average debt of $10, 000 • The national debt is ~$18. 2 trillion Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Economic System What four changes have occurred in the American economy since 1900? 1) Rise of corporate capitalism; 2) Increased globalization; 3) Changing nature of work: industrial services; 4) Rise of e-commerce. Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System • For society to run smoothly, people must often act together for the common good. • In complex societies power is exercised by the state—the primary political authority in society. • A political institution is the system of roles and norms that governs the distribution and exercise of power in society. Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System • Political institutions have evolved over time. • Functionalists see the state as centering on the task of maintaining order in society. • Conflict theorists look at the way in which political institution affects social change. Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System What are two sociological views of politics? • Functionalists analyze political institution in terms of the state; • Conflict theorists focus on how the political institution brings about social change. Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System The Legitimacy of Power Legitimacy refers to whether those in power are viewed as having the right to control, or govern, others Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System • Authority is legitimate power. • Traditional authority is power that is based on custom. • Rational-legal authority is based on rules and regulations. • Charismatic authority is based on the personal characteristics of an individual exercising power. Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System • Coercion is power used through force and based on fear. • All societies use coercion to an extent, but an illegitimate system has coercion as its main method of maintaining order. • The more that a government relies on coercion, the less stable that government will be Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System What type of authority is the most difficult to sustain from one leader to the next? Why? • Charismatic based on personality; public opinion of a person can change very quickly. Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System Types of Government The state is the combined political structures of a society such as the presidency, Congress, and Supreme Court in the United States. The government is the people who direct the power of the state. Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System Democratic Systems • Power is exercised through the people. Those who are governed take part in the governing process. • Representational democracies are those in which voters elect representatives. • Representatives make political decisions. • Constitutional monarchies have monarchs, but ultimate power rests with elected officials. Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System Conditions for Democracy Industrialization Access to Information Limits on Power Shared Values Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System Industrialization • Most democratic societies are industrialized. • Lenski says the educated urban population of industrial societies expect a voice. Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System Access to Information • Democracy requires well-informed voters. • Democracies are strongest in societies where the public and media have open access to information. Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System Limits on Power • All governments exercise power, but in democracies there are clear limits placed on government power. • One way to do this is to spread power among many groups. Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System Shared Values • Although the right to hold opposing views is a cornerstone of democracy, a shared set of basic values is essential. Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System In a government based on authoritarianism, power rests firmly with the state. However, this is not Weber’s authority of legitimate power Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System Types of Authoritarian Systems Absolute Monarchy Dictatorship Junta Totalitarianism Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System An absolute monarchy is an authoritarian system in which the hereditary ruler holds absolute power. A dictatorship is an authoritarian system in which power is in the hands of a single individual. Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System A junta is an authoritarian system in which a small group has seized power from the previous government by force. Totalitarianism occurs when those in power exercise complete authority over the lives of individual citizens. Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics Main Idea What are the two basic types of government? • Democratic and authoritarian Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System Political Parties Topics of special interest to sociologists are political parties, special-interest groups, voter participation, political models, and political socialization. A political party is an organization that seeks to gain power legitimately. Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System Multiparty Systems • Most democracies have multiparty systems in which different parties appeal to people on different issues. • This works because of proportional representation—seats in government are decided by proportions of votes. Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System The Two Party System • Nearly all elected U. S. officials since the Civil War have been members of either the Democratic Party or the Republican Party. • Critics claim that this method of election prevents growth of third parties. Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System American Politics Interest Groups • Interest groups leverage political power to influence policies. • They use lobbyists, monetary donations, collection of petitions, organized letter-writing campaigns, and media campaigns. Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System American Politics Political Participation • United States has one of the lowest rates of voter participation. • Only about 60 percent of voting-age people vote. • Race and ethnicity, age, and education level affect rates of voting. Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics The Political System American Politics Political Models The power-elite model states that political power is exercised by and for the privileged few. • The pluralist model states that the political process is controlled by interest groups that compete with one another for power. • Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.

The Economy and Politics Political Socialization Family Mass Media • Children begin learning political beliefs from their parents and other relatives. • The political viewpoint of the mass media is not always announced directly. • Parents may also conduct deliberate socialization activities such as taking a child to vote. • Political messages become explicit during a campaign season. School Peer Groups • Children recite the Pledge of Allegiance every day. • People with similar characteristics tend to share political beliefs. • Students learn the political histories of the country and of their states. • Economic status and age are two of the major factors that influence a person’s political views. Original Content Copyright © Holt Mc. Dougal. Additions and changes to the original content are the responsibility of the instructor.