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Chapter 14:Politics and Economy in Global Perspective

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1 Chapter 14:Politics and Economy in Global Perspective

2 Objectives (slide 1 of 3) 14.1 Political Systems, Power, and Authority
Distinguish political sociology from political science. Describe the major types of authority. 14.2 Governments Around the Globe Identify the four basic types of government and characteristics of each. Discuss some of the ways in which political authority is transferred. 14.3 The US Political System Compare and contrast the US political system with other democracies.

3 Objectives (slide 2 of 3) 14.4 Theoretical Perspectives on Power and Political Systems Illustrate the functionalist and conflict perspectives on political power. 14.5 War and Peace Explain the causes, types, and costs of wars, as well as the ways warfare is evolving. Discuss the changing demographic composition of the US armed forces. Discuss ways the United States has tried to deter attack as well as seek diplomatic resolutions. 14.6 Economy and Economic Systems in Transition Identify and describe historically different economies and the nature of work within each.

4 Objectives (slide 3 of 3) 14.7 Global Economic Systems
Compare and contrast the key characteristics, common differences, and historical trends of capitalism and socialism. 14.8 Theoretical Perspectives on Economy and Work Illustrate the functional, conflict, and symbolic interactionist perspectives as they apply to the economy and work. 14.9 Postindustrial US Economy and Work Describe the changes in economics and work demographics in the postindustrial era in the United States.

5 Political Systems, Power, and Authority (slide 1 of 2)
State: The political entity having a monopoly over the use of force in a specific geographic territory Government: The formal organization that acts on behalf of the state to regulate interactions with other states and among citizens of the state Power: The ability to realize one’s goals and interests, even in the face of resistance Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.1 Political Systems, Power, and Authority LO: Distinguish political sociology from political science Politics is the social institution that sets policies and goals for society and a means through which power is both exercised and acquired. Politics takes place within a state— the political entity having a monopoly over the use of force in a specific geographic territory. Government is the formal organization that acts on behalf of the state to regulate interactions with other states and among citizens of the state. For example, the United States is a state whose government is the constitutionally established system of institutions that carry out the directives of the three branches of government: the legislative, executive, and judicial. Politics involves the exercise of power within a political system, or, “who gets what, when, and how.” Political sociology is different from political science in important ways. Political science often focuses on comparisons of political systems in different countries, relationships between governments and other countries or international bodies such as the United Nations, and the operations of the branches of government, including election laws and campaigns, public opinion, and efforts to pass legislation. Political sociology focuses on how politics is influenced by other social institutions such as the media, the economy, religion, and education. Power is the ability of to realize one’s goals and interests, even in the face of resistance.

6 Political Systems, Power, and Authority (slide 2 of 2)
Coercion: Occurs when one person or group forces its will on another, based on the threat of physical force or violence Influence: The exercise of power through the process of persuasion Authority: Power that has been institutionalized and is recognized as legitimate by the people over whom it is exercised Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.1 Political Systems, Power, and Authority LO: Describe the major types of authority There are three basic sources of power in any political system: force, influence, and authority. Force is the actual or threatened use of coercion to impose one’s will on others. Coercion occurs when one person or group forces its will on another based on the threat of physical force or violence. Filling prisons with political prisoners from the opposition party to stifle dissent would be an example of coercion. Influence is the exercise of power through the process of persuasion. Examples of influence include newspaper editorials, expert testimony, and the opinions of friends or respected people. Authority is power that has been institutionalized and is recognized as legitimate by the people over whom it is exercised. Authority is typically limited by the constraints of a particular social status. For example, in the United States, judges—members of the judiciary—can supervise trials and make decisions about guilt or innocence, but they cannot make new laws or collect taxes.

7 Types of Authority Traditional authority: Power conferred by custom and accepted practice Legal-rational authority: Power derived from written rules and regulations of political systems Charismatic authority: Power made legitimate by a leader’s exceptional personal characteristics and emotional appeal to his or her followers Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.1 Political Systems, Power, and Authority LO: Describe the major types of authority Max Weber identified three types of authority: traditional, legal-rational, and charismatic. Traditional authority is power conferred by custom and accepted practice. It is usually institutionalized and accepted without question. The authority of a king or queen in a monarchy is based on tradition, as is the authority of the pope in the Catholic Church. Traditional authority rests on custom, not in personal characteristics, technical competence, or written laws or regulations. Many of the remaining monarchs around the world, such as Queen Elizabeth II of England, now defer to elected leaders, such as the prime minister, who have legal-rational authority. Legal-rational authority is derived from written rules and regulations of political systems. In legal-rational authority, specific areas of competence and authority are clearly delineated and limited by role. Violation of those explicit laws and constitutional provisions, if serious enough, can lead to loss of position. Richard Nixon resigned from the presidency in 1974 as Congress threatened him with impeachment proceedings. Charismatic authority is power made legitimate by a leader’s exceptional personal characteristics and emotional appeal to his or her followers. Examples include the authority wielded by Martin Luther King, Mahatma Gandhi, or Jesus Christ. Charismatic authority tends to be unstable. Since it is based on personal characteristics of individuals rather than on law, there are no protections for various interests, and charismatic leaders like Adolf Hitler can cause great harm. Charismatic authority is not easily transferred to successors unless the leader helps create and legitimize a traditional or legal-rational system.

8 Monarchy Monarchy: A government ruled by a family in which the right to rule is passed from one generation to the next by inheritance City-states: Small centers of power restricted to cities in which a monarch ruled the city surrounding a castle Nation-states: Political entities extending throughout a relatively large geographic region Absolute monarchs: Claim a monopoly on power in a country based on divine right Constitutional monarchies: Members of royalty serve as symbolic rulers while elected officials actually govern those countries Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.2 Governments around the Globe LO: Identify the four basic types of government and characteristics of each. A monarchy is a government ruled by a family, and the right to rule is passed from one generation to the next by inheritance. Monarchies are one of the oldest forms of government and were very common in agrarian societies, and can be traced back to city-states, small centers of power restricted to cities in which a monarch ruled the city surrounding a castle. As these city-states fought with one another, some xtended their power to broader regions, conquering and absorbing other city-states, ventually resulting in larger nation-states—political entities covering a relatively large eographic region. Monarchies were the most common form of government in Europe well into the 19th century but are much less common today. Absolute monarchs, such as the royal families in Saudi Arabia and Kuwait, claim a monopoly on power in a country based on divine right. Most monarchies today have become constitutional monarchies, such as Great Britain, Norway, and Sweden, in which members of royalty serve as symbolic rulers while elected officials actually govern those countries. Because constitutional monarchies are ruled by elected officials, they are also a form of democracy.

9 Democracy Democracy: A form of government in which the people governed have the opportunity to select those who govern and, in some cases, to participate directly in governance themselves Direct democracy: A democracy in which all members come together to make decisions Representative democracy: A democracy in which representatives of the people are elected to govern on their behalf Parliamentary systems: Representative democracies in which candidates for the national legislature (parliament) represent political parties Democratic republics: Examples of representative democracy; much like parliamentary systems except that they have popularly elected chief executives Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.2 Governments around the Globe LO: Identify the four basic types of government and characteristics of each. A democracy is a form of government in which the people governed select those who govern and, in some cases, participate directly in governance themselves. Democracies have traditional or constitutional limits to power, require leaders to periodically be re-elected, and recognize human rights, which usually include freedom of speech, freedom of the press, and freedom of religion. The United States is the oldest surviving democracy. Small communities can exercise direct democracy, in which all members come together to make decisions. However, democratic governments in all but the very smallest of societies practice representative democracy—a democracy in which representatives of the people are elected to govern on their behalf. These representatives make most routine decisions but sometimes resolve issues by popular vote. Representative democracies include constitutional monarchies, parliamentary systems, and democratic republics. Parliamentary systems are representative democracies in which candidates for the national legislature (parliament) represent political parties. The prime minister is elected from among members of the party holding the majority of seats. Parliamentary systems typically require the ruling party to call elections every few years and also have elections when a coalition breaks up or the ruling party loses a major vote. Most European parliamentary system elections are based on proportional representation, with a party winning 40% of the vote, for example, being awarded 40% of the seats in the legislature. This system encourages multiple parties because even a small party having only 5% or 10% of the vote can have elected representatives. Democratic republics, such as the United States, are examples of representative democracy and are much like parliamentary systems except that democratic republics have popularly elected chief executives. Unlike most European parliamentary systems, US elections are winner-take-all affairs, with the party winning a majority of votes in a specific district being awarded the seat and other parties—even one gaining 49% of the vote—receiving nothing. Winner-take-all voting encourages a two-party system and discourages third parties since they are unlikely to win a majority.

10 Authoritarianism Authoritarian governments: Concentrate power in the hands of a strong leader, who often rules for life and may exercise absolute power Dictatorship: Rule by a single person Oligarchies: Authoritarian governments ruled by a select few Military junta: A group of military leaders who have seized power from the prior government Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.2 Governments around the Globe LO: Identify the four basic types of government and characteristics of each. Authoritarian governments concentrate power in the hands of a strong leader who often rules for life and may exercise absolute power. Such governments often do not recognize human rights or freedoms and attempt to restrict the flow of information and to control the media in order to repress dissent. There are many kinds of authoritarian governments, including monarchies, dictatorships, oligarchies, totalitarian governments, and military juntas. A dictatorship is rule by a single person. It is an example of an authoritarian government. Oligarchies are governments ruled by a select few. Leaders are subject to the whim of the ruling group and can be quickly replaced if they lose support of that group. Oligarchies are often authoritarian governments. However, not all oligarchies are authoritarian governments. Even a democracy may be an oligarchy if power is effectively in the hands of a few people. Military juntas are authoritarian governments and are usually either oligarchies or dictatorships. A military junta is a group of military leaders who have seized power from the prior government.

11 Totalitarianism Totalitarian government: An authoritarian government having complete control over all aspects of people’s lives—even aspects having little or nothing to do with politics Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.2 Governments around the Globe LO: Identify the four basic types of government and characteristics of each. A totalitarian government is an extreme form of authoritarian government having complete control over all aspects of people’s lives—even aspects having little or nothing to do with politics. Where authoritarian governments may have independent social and economic institutions not under control of the state, totalitarian governments rigidly control all major institutions, including families, the economy, and religion. Totalitarian governments typically have a single political party, have an elaborate ideology used to explain and justify the government, utilize terror in the form of secret police, torture, and punishment without trials, and rigidly control weapons, the media, and the economy. Examples include Nazi Germany, the Soviet Union under Joseph Stalin, and Cuba under Fidel Castro. Not all authoritarian governments become totalitarian governments, but there is a tendency for them to do so in order to consolidate and preserve their power.

12 Revolutions, Coups d’Etat, and Transfers of Authority
Coup d’état: The abrupt replacement of one government with another illegally, often relying upon coercive force or the threat of violence Political revolution: The replacement of one political system with another through violent means Nonviolent resistance: Political actions relying on nonviolent acts to protest particular policies or regimes Elections: Formal decision processes in which individuals are permitted to vote for their favorite option Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.2 Governments around the Globe LO: Discuss some of the ways in which political authority is transferred. One of the first tasks of any political system is to provide for the orderly succession of power from one set of leaders to the next. Historically, in totalitarian countries ruled by a dictator, the succession plan is often for power to be inherited by a son or daughter, much like occurs in monarchies. In other cases, the autocratic ruler holds on to power stubbornly and a disorderly transition occurs through a coup d’état, a political revolution, or nonviolent protests. A coup d’état is the abrupt replacement of one government with another illegally, often relying upon coercive force or the threat of violence. Usually more violent and long lasting than a coup d’état is a political revolution—the replacement of one political system with another through violent means. Political revolutions may be thought of as extreme examples of social change brought about through social movements. Many of the factors leading to revolutions are the same factors that lead to reformist social movements, including rising expectations, an unresponsive government, leadership by intellectuals, and legitimization of the movement. A wide range of social movements influences politics, and most of these are reform movements rather than revolutionary movements, leading not to violent political overthrows but to modification of existing laws or policies. In many cases, social and political movements pursue a deliberate course of nonviolent resistance— political actions relying on nonviolent acts to protest particular policies or regimes. Democracies usually have been more successful at providing for an orderly succession of power through elections— a formal decision process in which individuals are permitted to vote for their favorite option. However, even in the United States, orderly transition has been more difficult and the credibility of the government has at times been strained when elections are extremely close.

13 The US Political System
The US two-party system, winner-take-all elections, wedge issues, and efforts to get voters to the polls are just some of the many key factors influencing the outcome of elections. Political parties: Organizations whose major purpose is to gain legitimate control of the government Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.3 The US Political System LO: Compare and contrast the US political system with other democracies The US two-party system, winner-take-all elections, wedge issues, and efforts to get voters to the polls are just some of the many key factors influencing the outcome of elections. The Two-Party System In the United States, two major political parties— organizations whose major purpose is to gain legitimate control of the government—have accounted for 90% of the vote in most elections since the 1800s. There have been more than 1,000 third parties during the same period, but most of those have received very few votes. The media heavily favors the two established parties, making it difficult for third-party candidates to appear in debates or to be given equal time. In the United States, each party has to appeal to the middle to get its candidate elected. Hence, parties tend to take similar political positions and display fewer ideological differences. In contrast, candidates and parties in parliamentary systems often take clear and distinct positions representing class interests or special issues and still expect to win enough votes to be represented in Parliament. While American political parties are not as extreme in their differences as those in European parliaments, the Republican and Democratic parties take different stands regarding major social and economic issues. Republicans generally believe government should play a limited role, raising and spending as little as possible and relying on individual initiative and competition to drive the economy. Democrats typically believe that an unregulated economy leads to greater inequality and believe government should be bigger, raising more money in taxes to support social programs that attempt to provide a safety net for everyone and keep big business in check. Democrats tend to be more liberal on social issues, believing that government should play an active role in protecting the rights of minority groups. Republicans tend to be more conservative, supporting arguments based on religious views that limit individual rights on issues such as abortion or gay marriage, and prefer social policies that reward people based on merit rather than on minority status.

14 Elections Winner-take-all elections: Those in which the party receiving the most votes in each district wins the whole district Proportional representation: A system in which seats in a legislature are divided among parties in proportion to the number of popular votes received by each party Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.3 The US Political System LO: Compare and contrast the US political system with other democracies In the United States, elections are winner-take-all elections in which the party receiving the most votes in each district wins the whole district. In contrast, most parliamentary systems, such as that of Sweden, employ a proportional representation system in which seats in a legislature are divided among parties in proportion to the number of popular votes received by each party. The proportional representation system encourages the formation of minority parties representing special or extreme interests. Minority parties can sometimes play a crucial role in forming a coalition government, exacting political concessions from larger parties to create a majority coalition. Many states have complex petition processes before a third party can be placed on the ballot. Mass media often ignore third-party candidates, focusing instead on the two major parties they believe will have the most chance of winning.

15 Voter Participation Voting rates in the United States are lower now than they have been during many other periods in history. During the period between 1874 and 1892, an average of 79% of all eligible citizens voted in US presidential elections, although many groups denied voting rights at that time were impoverished (i.e. blacks and immigrants). The voting rate dropped dramatically after 1900, reaching a rate of 43% in Between 1945 and 2010, voting rates have ranged between 50% and 65%. Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.3 The US Political System LO: Compare and contrast the US political system with other democracies Voting rates in the United States are also lower now than they have been during many other periods in history. During the period between 1874 and 1892, an average of 79% of all eligible citizens voted in US presidential elections, although many groups denied voting rights at that time were impoverished (i.e. blacks and immigrants). The voting rate dropped dramatically after 1900, reaching a rate of 43% in Between 1945 and 2010, voting rates have ranged between 50% and 65%. Beeghley argues that voting participation rates are lower now than they were in the 19th century due to structural barriers excluding certain segments of the population such as the poor. In the US, election day is on Tuesday, making voting difficult for those who lack access to child care or are unable to take time off from work. Voters are required to register well in advance of elections, are dropped from rolls if they do not vote within a specified time, and must reregister when they move. Almost half the US population moves every 5 years, and polls indicate recent movers are less likely to vote. In the 1988 election, 37% of nonvoters did not vote because they were not registered. Two-thirds of those reported they would have voted if they could do so without having to register. The strongest structural factor leading to reduced voting in the United States is probably the “winner-take-all” elections. This system discourages voting in elections that are not close because in such elections, an individual vote has little likelihood of making a difference. Many legislative seats are “safe seats,” making it less important to vote. The middle-of the road positions taken by the two centrist US parties further reduce voting by making it seem less important who wins. Voting rates are dramatically influenced by social characteristics. Voting rates are higher for older, more educated, employed, white non–Hispanics. Political participation appears to be enhanced when people have more at stake, such as the affluent and well-educated, and when they have a sense of political efficacy—they feel they have the ability to make a difference through their participation.

16 Candidate Preference Gender gap: A tendency for women and men to have different political preferences on many issues Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.3 The US Political System LO: Compare and contrast the US political system with other democracies Exit polls from elections are often used to examine the preference for candidates as a function of important demographic characteristics like race, ethnicity, and so on. In 64, and 45% of those 65 and over. Similarly, voters from lower income categories were more likely to vote for Obama. There was also a rural–urban split, with urban voters most likely to vote for Obama (63%), while 50% of suburban voters and only 45% of rural voters indicating they voted for Obama. Many of these divisions reflect long-standing tendencies for the young, minorities, urbanites, and those with low income to favor Democrats. In the 1980s, election polls for the first time in recent memory began to display a significant gender gap— a tendency for women and men to have different political preferences on many issues. In the 1980s, women were more likely to register as Democrats than as Republicans and were more critical of policies of the Reagan administration. In 1990, women voted 54% for Democratic candidates while men split their votes 50:50. Women are more in favor of abortion rights and less in favor of large defense budgets and military intervention overseas. This gender gap has persisted through the 2008 presidential election, in which women were, in general, more likely to vote for the Democratic candidate, Barak Obama (56%), than were men (49%).

17 Opinion Polls, Wedge Issues, and Campaign Strategy
Wedge issues: Issues about which people have strong opinions and the position of their party receives greater public support than the other party Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.3 The US Political System LO: Compare and contrast the US political system with other democracies Today’s political campaigns use a wide range of strategies to target voters who tend to favor their candidate. By knowing which groups favor their candidate, campaigns can target efforts to get out the vote. Candidate preference data are taken from surveys leading up to the election. Such data provide a wealth of information that campaigns can use to target voters they want to encourage to get to the polls. Contemporary political campaigns rely heavily on opinion polls to identify issues to emphasize and even which positions to take on controversial issues. Each party tries to emphasize wedge issues— issues about which people have strong opinions and the position of their party receives greater public support than the other party. Many wedge issues in recent years have been based on religious beliefs regarding issues such as abortion, same-sex marriage, funding of contraceptives, or prayer in schools. As former Senator Bob Kerry of Nebraska said, campaigns are not about changing the minds of voters but about convincing them the candidate’s values align with theirs.

18 Lobbyists and Special-Interest Groups
Interest groups: Voluntary associations of citizens who attempt to influence public policy Lobbyist: Someone who represents an interest group and meets with public officials to try to influence their decisions by providing information supporting the interest group’s goals Political action committees (PACs): Interest groups that are formed to campaign for or against political candidates, legislation, and ballot initiatives Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.3 The US Political System LO: Compare and contrast the US political system with other democracies Interest groups are voluntary associations of citizens who attempt to influence public policy. Such groups are often concerned with regulatory legislation, but some also try to influence federal criminal code. Single-interest groups focus on specific issues such as gun legislation. Broader interest groups often represent large segments of the population and focus on issues of interest to that group. Public-interest groups claim to represent issues of interest to the broad public. Interest groups often attempt to influence the political process through lobbyists and political action committees. A lobbyist is someone who represents an interest group and meets with public officials to try to influence their decisions by providing information supporting the interest group’s goals. The term lobbyist derives from the common practice of catching officials in public lobbies and trying to persuade them there. In 2010, there were 13,000 active registered lobbyists in Washington, DC, who collectively spent more than $3.51 billion on lobbying expenses, including lobbyists’ salaries. Political action committees (PACs) are interest groups that are formed to campaign for or against political candidates, legislation, and ballot initiatives. The first PAC was founded by organized labor in By 1976, there were 922 PACs. By 2009, there were 4,611 PACs. PACs provide hundreds of millions of dollars to political candidates for media campaigns. PACs have become a significant way for groups and corporations to exert influence on issues important to them. While PACs try to influence decisions on high-visibility and controversial issues, they devote much more of their efforts to influencing low-visibility issues where it is less likely to be detected. Rather than focusing their energies on the final vote, PACs try to influence the way in which bills are worded, securing exemptions from government regulations. The impact of PACs on US politics is driven by an almost insatiable need for campaign funds. Campaigns for US senator or the governorship in most states cost millions of dollars. Because political campaigns are so expensive, most successful candidates must be rich. About 50% of US senators are millionaires. Many winning US senators spent more than $4 million on their campaigns. Even affluent candidates must raise money for their campaigns and hence are vulnerable to influence by contributors.

19 Global Comparisons with Other Democratic Systems
Government gridlock: An inability to resolve important issues when neither party has sufficient votes to determine government policy Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.3 The US Political System LO: Compare and contrast the US political system with other democracies When comparing the US political system with European systems, one of the most striking differences is the very low rate of voter turnout in the US. The voting rate in presidential elections in the United States in 2008 was 57.47% and the turnout for congressional elections was 38.46%. In contrast, the turnout in Canada for parliamentary elections was 61.41% and for the United Kingdom it was 65.77%, while the turnout rate for Denmark was Politics in the United States differs substantially from politics in most Western European democracies. Granberg and Holmberg conducted an exhaustive analysis of voting behavior and attitudes in dozens of national elections in both Sweden and the United States. They concluded several important differences were due to differences in the Swedish parliamentary system and the US democratic republic. Sweden has more political parties, and those parties take clearer, more easily perceived stands on political issues than the two US parties. Ideology is more closely linked to voting behavior in Sweden, where issues dominate voting decisions, while in the United States, voters are sometimes more influenced by candidate personalities than by the issues. Once again, it was structural differences in the two governments they believed led to those differences. The United States also has a history of voting barriers sometimes directed at particular groups that reduce voter participation. The 1965 Voting Rights Act was designed to prevent barriers such as literacy tests that once limited voting by blacks. During the 2012 election, new concerns were raised about laws passed in several states by Republican-controlled state governments, including those requiring state-issued ID cards, efforts to purge the rolls of dead or no-longer-eligible voters, limitations on absentee balloting, and reductions in early voting. Proponents argued that they are efforts to prevent voter fraud, while opponents argued voter fraud is rare and such measures are more likely to prevent far more legitimate voters from exercising their right to vote. In parliamentary systems, the head of government is selected from among the majority party. In contrast, for most of the years in the period 1954 to 1992, the president of the United States was a Republican and the Democrats had a majority in Congress. This is possible because the president is elected by popular vote rather than appointed by the majority party in Congress, as in parliamentary systems. This is one factor contributing to what some call “governmental gridlock”— an inability to resolve important issues when neither party has sufficient votes to determine government policy.

20 Functionalist Perspectives: Pluralist (Government by the People) Model
Pluralist models: Argues that many groups within a community or country have access to government officials and compete with one another in an effort to influence policy decisions Veto groups: Interest groups that have the capacity to prevent the exercise of power by others Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.4 Theoretical Perspectives on Power and Political Systems LO: Illustrate the functionalist and conflict perspectives on political power. The structural-functionalist perspective sees political systems as relatively stable, well functioning systems. In this view, pluralist models are used to explain that many groups within a community or country have access to government officials and compete with one another in an effort to influence policy decisions. These interest groups consist of a voluntary association of citizens who attempt to influence public policy. An interest group that is highly influential on one issue is often not the same group that has the greatest influence on another issue. In this case, power and influence are widely dispersed among many different interest groups, each having strong effects on a narrow range of issues. Within the pluralist perspective, David Riesman argues that many interest groups are veto groups having the capacity to prevent the exercise of power by others. To be reelected, political leaders must be able to placate veto groups. This assures that their interests have to be considered even when they are not the majority. Two studies of the power structure in New Haven, Connecticut, support the pluralist model. Those studies found that different groups controlled different issues and power had become more dispersed over time. It could be argued that the division of power in the US constitution among the executive, legislative, and judicial branches was a deliberate attempt to encourage greater pluralism by giving different groups opportunities to influence the political process.

21 Conflict Perspectives: Elite (Government by the Few) Model
Power rests with the “power elite” both inside and outside government. No one can be truly powerful unless he or she has access to major institutions. Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.4 Theoretical Perspectives on Power and Political Systems LO: Illustrate the functionalist and conflict perspectives on political power. Inspired by Marx’s conflict perspective, sociologist C. Wright Mills argued that a small ruling elite of military, corporate, and governmental leaders controls the fate of the United States. From this perspective, power rests in the hands of the few, both inside and outside government. According to Mills, these leaders come to constitute a “power elite” because they coordinate their decisions to their mutual benefit. The military, corporate, and governmental institutions form a power triangle that allows the powerful to realize their wills, even if others resist them. The elite belong to interlocking boards of directors, have memberships in elite clubs, attend elite schools, and in other ways associate with one another. In many cases, these elites often take turns in key positions on boards or as officers of corporations, moving from one institution to another. While Mills argues that power rests in the hands of the few both inside and outside government, he believed no one could be truly powerful unless s/he has access to the major institutions, because it is only through these institutions that power can be maintained and enhanced. Power resides not in the individual members of the elite but in the institutional positions they occupy. G. William Domhoff agrees with Mills that America is run by a small elite. Unlike Mills, however, Domhoff argues that the nation is controlled by a social upper class “that is a ruling class by virtue of its dominant role in the economy and government.” Domhoff believes the upper class dominates the military and political elite. Unlike Marx, he believes it is a social elite, not just an economic elite that dominates. This ruling class is socially cohesive and owns 20 to 25% of all privately held wealth and 45 to 50% of all privately held common stock. Members of the elite tend to hold public positions of authority, including important appointive government posts. They dominate powerful corporations, foundations, universities, and the executive branch of government.

22 Causes of War War: Organized conflict between nations
Five circumstances that increase the likelihood of war: A perceived threat Moral objectives Political objectives Social problems Absence of alternatives Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.5 War and Peace LO: Explain the causes, types, and cost of wars, as well as the ways warfare is evolving. In Why Nations Go to War, John Stoessinger argues that all sides argue that their position is morally right, and wars are often justified based on overly optimistic projections of the outcome and misperceptions of the intentions of the enemy. Evolutionary psychologist Steven Pinker, in The Blank Slate, argues alliances and pre-emptive wars are attempts to provide deterrence by developing a reputation for retaliation, and war itself is often beneficial for the victors because they gain control over scarce resources. Political scientist Quincy Wright argues that there are five circumstances that increase the likelihood of war. 1. A perceived threat— such as the suspected development of weapons of mass destruction. 2. Moral objectives— Operation Iraqi Freedom was presented as an effort to liberate the Iraqi people from an oppressive dictator. 3. Political objectives— The United States wanted to “stand up” to Saddam Hussein and show the world that we are a force to be reckoned with. 4. Social problems— The war helped divert attention from economic troubles at home. 5. Absence of alternatives— Diplomacy and UN monitoring of Iraq’s military capabilities had failed.

23 Types of War Asymmetric warfare: War between opponents with significantly different military power and, consequently, significantly different tactics Terrorism: The systematic threat or use of violence to achieve a political end; one form of asymmetric warfare Cyberwarfare: A form of information warfare using digital software and hardware to conduct sabotage and espionage Drone warfare: The use of remotely controlled airplanes to conduct surveillance and to kill suspected militants with laser-guided rockets and other armaments Military-industrial complex: The conjunction of interests of the combination of the federal government, the military, and the defense industry Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.5 War and Peace LO: Explain the causes, types, and cost of wars, as well as the ways warfare is evolving. There are many different types of war, each of which poses different threats to the nation state and requires different responses to prevent or to win such a war. Conventional warfare such as occurred in World War II and the Korean War is largely symmetrical, with two or more nation states battling each other to gain control of territory. Success in such a war could be measured by territory gained and losses inflicted upon the enemy. But the US is unlikely to be engaged in symmetrical warfare in the near future because it has pumped trillions of dollars into its military budget over decades. As a result, warfare today is often asymmetric warfare— war between opponents with significantly different military power and, consequently, significantly different tactics. The wars in Iraq and Afghanistan illustrate asymmetric warfare in which the United States and its allies rely on high technology equipment and massive resources while their opponents wage a guerilla war with car bombs and roadside improvised explosive devices (IEDs) to inflict casualties and destroy property. Terrorism— the systematic threat or use of violence to achieve a political end—is one form of asymmetric warfare. Not every act of asymmetric warfare is terrorism. Most definitions reserve the term for violent acts intended to create fear and that disregard the safety of civilians and noncombatants or explicitly target them. Terrorism is often carried out by extremist political groups whose members are unknown or in hiding, who deny accountability, and who are not affiliated with a sponsoring nation state, making it extremely difficult for governments to effectively respond. Sometimes acts of terrorism are carried out by totalitarian governments against their own citizens to suppress opposition or sponsor acts of terrorism against other countries. It hardly needs to be said that terrorism is a highly charged term and what one side calls an act of terrorism may be regarded as “resistance” by the other side. To discourage terrorism by not rewarding those who practice it, many countries, including the US, have policies of refusing to negotiate with terrorists. Technology is also transforming warfare. Cyberwarfare is a form of information warfare using digital software and hardware to conduct sabotage and espionage. Drone warfare—the use of remotely controlled pilotless airplanes to conduct surveillance and to kill suspected militants with laser-guided rockets and other armaments—has been so successful that much of the US military budget is being redirected from manned aircraft to drones. It is expected to expand in future wars because dozens of other countries around the world, including China and Russia, are developing their own drones. However, a number of legal and ethical questions have been raised by critics about the use of drones to perform targeted killing even in countries with which the US is not at war and when there has been substantial loss of life for innocent civilians.

24 Costs of War Military-industrial complex: The conjunction of interests of the combination of the federal government, the military, and the defense industry Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.5 War and Peace LO: Explain the causes, types, and cost of wars, as well as the ways warfare is evolving. Worldwide, well more than one trillion dollars is spent each year on military budgets. Lives lost and people wounded in military conflicts make up an even greater cost. Wars throughout history have taken an enormous toll, with World War II alone estimated to have resulted in 60 million deaths worldwide. If we add in refugees, productivity loss, and physical damages, the losses are staggering. Why do countries continue to accept the high costs of war? In the United States, one factor must certainly be what President Eisenhower called the military-industrial complex— the conjunction of interests of the combination of the federal government, the military, and the defense industry. Defense industries spend millions of dollars on lobbying to help ensure continued funding for their projects, and many of those lobbyists and key people in the industry are former military themselves, while other former military members take positions in the federal government. Members of Congress feel tremendous pressure from their constituents to support continued spending in their own districts.

25 Gender, Race, and Class in the Military
The military is primarily made up of men. Women are excluded from one third of all Army jobs and experience more harassment. An all-volunteer force shifts the burden of warfare onto disadvantaged minorities and lower social classes. Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.5 War and Peace LO: Discuss the changing demographic composition of US armed forces. Historically, the military has been made up primarily of men. In 2008, the percentages of women in the various military forces were 6% in the Marine Corps, 14% in the Army, 15% in the Navy, and 20% in the Air Force. Women are excluded from a third of all Army jobs in occupational fields such as infantry, armor, and special forces and continue to experience harassment in the military, leading to higher turnover rates for women than men. Gays were banned from military service between 1950 and 1993, when President Clinton signed the “Don’t Ask, Don’t Tell” policy. In 2011, that policy was repealed, permitting gay men and women to serve openly in the armed forces. One concern when the all-volunteer force was created was that the burden of warfare would be shifted more heavily onto the shoulders of disadvantaged minorities and the lower social classes. To some extent, this has happened. African Americans have consistently been overrepresented in the military, hovering around 20%, while the civilian labor force participation of blacks has stayed between 11 and 13%. However, the percentage of Hispanics in the military (13% in 2006) has more nearly mirrored the percentage of Hispanics in the civilian workforce. The bottom quartile of the socioeconomic status distribution is underrepresented in large part because of failing to meet educational, physical, mental aptitude, and moral requirements (such as no drug use or arrests), while the upper quartile is underrepresented primarily because they chose other careers.

26 Maintaining the Peace Deterrence and Defense Diplomacy and Resolution
Deterrence: Preventing war from occurring Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.5 War and Peace LO: Discuss ways the US has tried to deter attack as well as seek diplomatic resolutions. Much of the effort to preserve the peace since World War II has been essentially a peace-through-strength strategy. After World War II, with the proliferation of atomic weapons and the vastly more horrific possible consequences of all-out nuclear war between nations, much of the effort concentrated on deterrence— preventing war from occurring. During the Cold War, the dominant strategy was based on a premise of mutually assured destruction (MAD). This policy, as mad as it sounds, has actually worked for more than 60 years to prevent nuclear war. However, it has not prevented all wars. Instead, other types of warfare have occurred, including the rise of terrorism and attacks by stronger nations on weaker nations. This also led to a massive arms race that eventually bankrupted the Soviet Union and diverted substantial US economic resources from the civilian economy into the military. Another element of US efforts to prevent war has been increased reliance on high technology weapons. Those weapons seek not only to deter attacks from others but also to dominate any conflicts that do occur. By developing new weapons, we have sought the ability to execute wars with much less loss of life. In contrast to building up military strength, many argue that the most effective way to maintain the peace is through diplomacy, disarmament, and the resolution of differences. The idea is that diplomats can work together to negotiate reductions in weapons stockpiles, thereby reducing the change of war and the amount of death and destruction that might result. This includes efforts to negotiate nuclear weapons reductions and includes efforts to have the United Nations take an active role in reducing tensions such as providing troops to monitor the peace or to apply sanctions against countries that persist in activities that violate human rights in their own country or threaten the peace with other countries. It also includes nation-building efforts in which richer countries help poorer nations to improve their infrastructure to provide better housing, education, and healthcare for their people.

27 Economy and Economic Systems in Transition
Economy: Consists of the organizations and processes that produce and distribute goods and services. Agricultural Economies Hunting and Gathering Economies Economies in which agricultural production was efficient, leading to a food surplus, permitting a much more complex division of labor and making it possible to settle permanently in one place Cultures in which people hunted game and relied on readily available vegetation and water for subsistence Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.5 War and Peace LO: Discuss ways the US has tried to deter attack as well as seek diplomatic resolutions An economy consists of the organizations and processes that produce and distribute goods and services. Over thousands of years, societies have undergone transitions from agricultural economies to industrial economies and finally to information economies. The earliest economies were hunting and gathering economies in which people hunted game and relied on readily available vegetation and water for subsistence. These were bare subsistence economies limited by the available food supply that could support no more than a few dozen members, all of whom performed the same task of acquiring food for survival. All societies began as hunting and gathering economies. These were still common until a few hundred years ago. Today only a few such societies remain, in remote areas, with most of the rest having had their territory overrun by other forms of economy. The agricultural revolution occurred with the invention of the plow drawn by animals, followed by other agricultural technologies. This made agricultural economies possible in which agricultural production was efficient, leading to a food surplus, permitting a much more complex division of labor and making it possible to settle permanently in one place. With people free to pursue other occupations, the wheel, writing, and numbers were also invented, leading to what many refer to as the “dawn of civilization.” Permanent settlements became possible, and great wealth was accumulated by a few, with stratification becoming a major feature of social life. An elite gained control of surplus resources and defended its position with arms. This centralization of power and resources eventually led to the development of the institution of the state to further consolidate the gains of the rich and powerful. Agricultural economies dramatically changed economic life. The key technology is human and animal labor and the key resource is raw materials including land.

28 Industrial Economies Industrial Revolution: A dramatic change in the nature of production in which manufacturing became a central economic activity Industrial societies have six important characteristics: They rely on manufacturing and mass production. New machines increase productivity. New forms of energy replace human muscle power. Work becomes centralized in factories. Independent craftsmen are replaced by wage laborers. Narrow specialization contributes one step in the production process. Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.6 Economy and Economic Systems in Transition LO: Identify and describe historically different economies and the nature of work within each. The Industrial Revolution dramatically changed the nature of production: Manufacturing became a central economic activity. The Industrial Revolution began in approximately 1750 in England, then spread throughout Europe and the United States, and eventually engulfed the entire world. By 1800, more British workers were employed in manufacturing than in agriculture, and the first industrial society was born. The US did not reach this stage until 70 years later. Today the great majority of societies are industrialized. Industrial societies have six important characteristics. 1. Manufacturing and mass production— People freed from agricultural labor were able to work in manufacturing jobs assembling raw materials into finished goods made up of standardized components. 2. New machines increased productivity— Beginning with inventions in the textile industry that increased the productivity of workers, new machines dramatically increased productivity and a surplus of inexpensive manufactured goods replaced handcrafted ones. 3. New forms of energy replaced human muscle power. New machines quickly became too big to be powered by humans or animals. In 1765, the steam engine provided a solution that was hundreds of times more powerful than humans. 4. Work became centralized in factories. The size of these new machines and need for power meant that workers had to be centralized in factories rather than working individually in their homes. 5. Independent craftsmen were replaced with wage laborers. Craftsmen who worked independently and sold their products to buyers could not compete with the new factories and became factory workers who were paid wages in exchange for their labor. The breakup of agricultural-based feudal societies caused many people to leave the land and seek employment in cities. This created a great surplus of labor and gave capitalists plenty of laborers who could be hired for extremely low wages. 6. Narrow specialization. With mass production, skilled craftsmen capable of producing complete products were replaced with highly specialized workers, each performing a repetitive task that contributed to one small step in the production process. In industrial economies, the key technology is capital intensive because of the wealth required to build and purchase machines, and the key resource is energy to power those machines.

29 Information Economies and Postindustrial Societies
Information revolution: A change that began during the last half of the 20th century in which service jobs become more common than jobs in manufacturing or agriculture Information economy: An economy based on the product of skilled professionals, which is the information or knowledge they provide Postindustrial societies: Dominated by information, services, and high technology more than the production of goods Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.6 Economy and Economic Systems in Transition LO: Identify and describe historically different economies and the nature of work within each. The information revolution is a change that began during the last half of the 20th century in which service jobs are becoming more common than jobs in manufacturing or agriculture. Service jobs are high- and low-skilled jobs that produce and transfer knowledge. The information revolution overlaps the more recent phases of the Industrial Revolution, and both “revolutions” are occurring simultaneously in most parts of the world. The information revolution has lead to what is known as the information economy— an economy based on the product of skilled professionals, which is the information or knowledge they provide. The information revolution began with the invention of the integrated circuit or computer chip. These chips have revolutionized our lives, running our appliances and allowing us to produce calculators, computers, and other electronic devices to control our world. Innovations such as the Internet, permitting people to communicate using computers all around the globe, satellite dishes, and cellular phones have changed how families spend their time, the kind of work we do, and many other aspects of our lives. Postindustrial societies are dominated by information, services, and high technology more than by the production of goods. The key technology in postindustrial societies is knowledge as represented by copyrighted works, patents, and knowledge intensive information-processing technologies. The key resource is information that can be used to generate additional information and knowledge. The US was the first country to have more than half of the work force employed in service industries. Service industries include government, research, education, health, sales, law, banking, etc. By 2010, several countries were well into the postindustrial age, with a low among these nations of 68.5% for Italy and 69.7% for Germany and highs of 81.2% for the United States and 80.7% for both the United Kingdom and the Netherlands.

30 Economic Sectors Economic sectors: Large segments of the economy representing fundamentally different kinds of production Primary sector: Agricultural production; the major resources are raw materials and the technology employed is labor intensive Secondary sector: Manufacturing; its activity is the production of goods, the key resource is energy, and the technology employed is capital-intensive machine production Tertiary sector: The service sector, including the entertainment industry, the food industry, the professions, etc. Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.6 Economy and Economic Systems in Transition LO: Identify and describe historically different economies and the nature of work within each. Modern economies contain elements of each of the three most common types of economies. These elements, or categories, are known as economic sectors— large segments of the economy representing fundamentally different kinds of production. These three sectors of the economy parallel the development of societies over time as they evolved from hunting and gathering societies to postindustrial societies. The primary sector is agricultural production, the major resources are raw materials, and the technology employed is labor intensive. The primary sector dominates preindustrial economies but plays a much more limited role in industrial or postindustrial economies. The secondary sector is manufacturing, its activity is goods producing, the key resource is energy, and the technology employed is capital-intensive machine production. The secondary sector dominates industrial economies. The tertiary sector is the service sector, including entertainment, the food industry, professions, and so on. The tertiary sector dominates postindustrial societies.

31 Capitalism Capitalism: An economy based on private ownership of wealth, competition, profit, and noninterference by the government Market economy: An economy in which consumers are the key decision makers, the market drives the economy, and transactions are based on profit motive and competition Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.7 Global Economic Systems LO: Compare and contrast the key characteristics, common differences, and historical trends of capitalism and socialism Capitalism is an economy based on private ownership of wealth, competition, profit, and noninterference by the government. Capitalism tends to be decentralized, with no single organization or government that makes most economic decisions. Individual companies decide how much they will produce each year and what they will charge. Capitalism is based on a market economy in which consumers are the key decision makers, the market drives the economy, and transactions are based on the profit motive and competition. The key assumption of capitalism is that people are permitted to engage in economic exchange out of their own self-interest, and through market forces, those individual self-interests lead to the common good. Even though we are all motivated by our own personal gain, we all benefit from the increased productivity and greater efficiency that result from people trying to maximize their own profits.

32 Types of Capitalism Competitive capitalism: The capitalism of Marx’s day in which no single capitalist or small group of capitalists could dominate a market Monopoly capitalism: Occurs when one or only a few capitalists control a sector of the economy State capitalism: Capitalism in which capitalistic enterprises exist side by side with state-owned production enterprises and the state regulates and manages the economy Corporate capitalism: Capitalism dominated by public corporations owned by many stockholders Managerial capitalism: Occurs when managers, through both their day-to-day involvement in the corporation and their ownership of large blocks of stock as part of their compensation, dominate the corporation Institutional capitalism: Capitalism in which large shares of corporations are owned by institutional investors such as pension, insurance, or trust funds Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.7 Global Economic Systems LO: Compare and contrast the key characteristics, common differences, and historical trends of capitalism and socialism Historically, there have been several variants of capitalism: Competitive capitalism is the capitalism of Marx’s day in which no single capitalist or small group of capitalists could dominate a market. Monopoly capitalism occurs when one or only a few capitalists control a particular industry or segment of the economy. State capitalism is exemplified by the United Kingdom, where major businesses or organizations in key industries are owned by the state, while private corporations operate in other industries and the state regulates and manages the economy. Today, capitalism in the United States and many other countries can best be described as corporate capitalism— capitalism dominated by public corporations owned by many stockholders. Corporate capitalism has evolved over time and there are four common variants, all of which can be found in the world today. Most larger corporations today have become public corporations owned by many stockholders. These many owners of stock depend heavily on worker-managers to control the corporation. The result is managerial capitalism, in which managers, through both their day-to-day involvement in the corporation and their ownership of large blocks of stock as part of their compensation, often dominate the corporation. Another, more recent variation is institutional capitalism, in which large shares of corporations are owned by institutional investors such as pension, insurance, or trust funds. This form has arisen because of the shift of much individual investing from buying shares in a business to investing in such managed funds controlled by large financial institutions.

33 Socialism Socialist economies: Economic systems in which the means of production are collectively owned and the economy is regulated by the government Communism: As envisioned by Karl Marx, an extreme form of socialist economic and political system in which all members of the society are equal Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.7 Global Economic Systems LO: Compare and contrast the key characteristics, common differences, and historical trends of capitalism and socialism Socialist economies are economic systems in which the means of production are collectively owned and the economy is government regulated. Socialist economies place primary emphasis on collective goals, assuring that everyone has sufficient resources to meet their needs and minimizing inequalities. Basic resources are regarded as entitlements of all people, not something available only if you can afford it. Socialist economies tend to be centralized, planned economies, with state ownership of most resources and private trade occurring only in an illegal black market. State socialism occurs when the government determines what will be produced, how it will be produced, and the means of distribution of goods and services through centralized economic planning. Communism, as envisioned by Karl Marx, is an extreme form of socialist economic and political system in which all members of the society are equal and workers control decision making over production and issues affecting their lives. Marx saw socialism as an intermediate step on the road to pure communism. Although some governments today call themselves communist societies, none has achieved the classless society Marx envisioned as communism. Despite efforts to reduce inequality, communist countries during the Cold War era generally displayed considerably less material wealth than capitalist countries and still had both economic and political inequalities, with political elites having much greater access to material wealth and large, cumbersome, bureaucratic governments required to manage such tightly regulated economies.

34 Functionalist Perspective
Multinational corporations (or transnational corporations): Commercial organizations whose operations span international boundaries, typically both producing and selling goods and services in multiple countries Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.8 Theoretical Perspectives on Economy and Work LO: Illustrate the functional, conflict, and symbolic interactionist perspectives as they apply to the economy and work. Functionalists view the economy as a key social institution performing the important function of providing for the production and distribution of needed goods and services. The needs of society are met when the various components of the economic system work smoothly to fulfill their functions. Today we truly have a global economy in the sense that large portions of the products we use are manufactured in other countries, and large percentages of the products and services we produce and provide are sold to people in other countries. Advances in communications and transportation technologies have made it possible for products to be designed in one country, built in another with raw materials and components from still other countries, and the resulting product is sold in many countries around the world. Functionalists emphasize the positive benefits of globalization and “free trade” , believing it leads to benefits for all with greater efficiency, lower prices, increased productivity, and higher employment. In this view, the global division of labor builds organic solidarity in which we all depend on workers around the globe. The effects of the global economy are best understood by considering the commercial organizations that do business throughout the world: multinationals. Multinational corporations (transnational corporations) are commercial organizations whose operations span international boundaries, typically both producing and selling goods and services in multiple countries. Of the world’s 50 largest economies in 2007, six are multinational corporations. The functional perspective emphasizes the positive benefits of multinationals for both the developing countries and developed ones. Multinationals can be good for developing countries by bringing in jobs. They also facilitate the exchange of ideas and technology. It may be in the economic interests of large multinational corporations to encourage countries in which they operate to settle their political disputes peacefully.

35 Conflict Perspective Export jobs to low-wage countries: To move production from high-wage countries to low-wage countries, resulting in a net loss of jobs in high-wage countries and a net increase of jobs in low-wage countries Outsource: To discontinue production and contract with another company to supply those goods or services Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.8 Theoretical Perspectives on Economy and Work LO: Illustrate the functional, conflict, and symbolic interactionist perspectives as they apply to the economy and work The conflict perspective emphasizes inherent conflicts between workers and management. This perspective argues that globalization benefits large corporations at the expense of workers. Today’s multinationals are not just buying and trading all over the world, they are also producing all over the world. This permits multinationals to export jobs to low-wage countries—moving production from high-wage countries to low wage countries, resulting in a net loss of jobs in high-wage countries and a net increase of jobs in low-wage countries. Sometimes the company sets up its own plants in low wage countries. In other cases, it may outsource work— discontinue production contract with another company to supply those goods or services. This can reduce the corporation’s accountability for the working conditions and wages paid for that work. With new information technologies, many corporations have found it cheaper to export jobs to Third World countries where labor is cheaper, sending data and information back and forth for processing. In their rush to profit from cheap foreign labor, multinationals often contribute to conditions that lead to human rights abuses and exploitation of workers. Multinationals can use their economic clout to extract benefits from countries. Countries trying to create a “favorable climate for investment” may develop repressive anti-labor laws. Conflict perspective theorists suggest that, on the whole, multinationals have a negative impact on workers in both industrialized and developing nations. Multinationals, and the people running them, often play a role in the world economy that is largely independent of the country in which they are headquartered. In fact, the conflict perspective argues that these companies feel little loyalty to their nation of origin, preferring instead to focus on their own economic interests. According to the conflict perspective, multinationals can even threaten national sovereignty in both developing and developed countries. Studies of the impact of multinationals on developing countries suggest that initially, they increase the host country’s wealth, but they also tend to increase economic inequality. Upper and middle classes benefit most by managing the local facilities and selling products and services to the multinationals. However, lower classes benefit much less. By opposing increases in minimum wage levels and favoring the restriction of union activities, multinationals’ actions increase economic inequality.

36 Trade Restraints and Deep Integration
Shallow integration: Occurs when most products are produced in a single country and then sold in that country and abroad Deep integration: Most large corporations are multinationals that both produce and sell their products and services around the world Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.8 Theoretical Perspectives on Economy and Work LO: Illustrate the functional, conflict, and symbolic interactionist perspectives as they apply to the economy and work Nations sometimes attempt to restrict foreign imports of certain goods to protect their own workers and industries from low-wage competition from other countries. However, this is increasingly difficult to do. In the 1960s and 1970s, most products were made entirely within a single country by a national company and then sold either in the same country or in another country. That was shallow integration. Under shallow integration, countries could impose taxes on such imported products to protect their interests. Today that is no longer possible. Today, we have deep integration, in which most large corporations are multinationals that both produce and sell their products and services around the world. This problem is illustrated by data from the United Nations 2008 list of the 100 largest nonfinancial transnational corporations. They compute a Transnationality Index (TNI) as the average of the following three ratios: foreign assets to total assets, foreign sales to total sales, and foreign employment to total employment. In 2008, the six largest US nonfinancial firms on their list and their TNI scores were General Electric (52.2%), ExxonMobil Corporation (67.9%), Chevron Corporation (58.1%), Ford Motor Company (54.3%), ConocoPhillips (43.4%), Procter & Gamble (60.2%), and Walmart Stores (31.2%). So, for example, if the United States wanted to limit auto imports, it would not be as simple as taxing automobiles produced by foreign companies. We would also have to limit imports of American-brand automobiles produced in other countries.

37 Symbolic Interactionist Perspective
Emphasizes the ways in which people find or create meaning from their work and the social significance of work, including: Work and identity Alienation and Job Satisfaction Alienation from work: The breakdown of the natural connections people have with their work and with other people through their work Renegotiating the work contract Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.8 Theoretical Perspectives on Economy and Work LO: Illustrate the functional, conflict, and symbolic interactionist perspectives as they apply to the economy and work Symbolic interactionism emphasizes the ways in which people find or create meaning from their work and the social significance of work. This perspective emphasizes micro-level relationships between individuals and work. This approach is illustrated by considering the social significance of work for a person’s identity, why workers become satisfied or alienated by their work, and how workers use social interaction to construct meaning through renegotiating the work contract. Work and Identity: Work is often the defining element of a person’s life in modern industrial societies, heavily influencing both one’s self-esteem and status in the community. The importance of work is reflected in the fact that occupation is one of the three major indices of socioeconomic status, SES. In addition, occupation is often the master status for a person, the status that most clearly defines her or his identity. Work means more than just a steady income to people. Modern workers appear increasingly interested in achieving some form of self-fulfillment in work. Alienation and Job Satisfaction: Mass production has been criticized by many because it is boring, repetitive work requiring little or no thought and often leads to alienation from work. Alienation from work is the breakdown of the natural connections people have with their work and with other people through their work. To relieve the boredom, workers often find ways to vary activities to provide some meaning and “work the system” to avoid being given still more work and losing what freedom of activity they have. Despite such evidence of alienation from work, surveys often find moderate to high levels of satisfaction with work. A classic and often-cited study (Work in America, Department of Health, Education and Welfare 1973) found the following factors to be associated with job satisfaction: 1. High status, control, personal satisfaction, and prestige 2. Challenging jobs with autonomy and variety 3. Thoughtful, considerate, and consultative supervision 4. Peer interaction on the job 5. High wages 6. Clearly defined opportunities for advancement 7. Good work conditions 8. Employment security Renegotiating the Work Contract: Many occupational groups are trying to renegotiate and redefine their occupational activities to make their work less demeaning and, as much as possible, more autonomous. Mary Romero, in her extensive study of Chicana domestic workers, identified several strategies these workers used, including negotiating which tasks they would perform, charging a flat rate rather than an hourly rate, and minimizing contact with employers.

38 Transition from Agricultural Work to Factory Work to Service Work
Occupational structure: In the United States, refers to the number and types of jobs available; experienced major shifts during the 20th century Blue-collar jobs: Manual labor occupations often having relatively low status, such as machinist, assembly-line worker, truck driver, or auto mechanic Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.9 Postindustrial US Economy and Work LO: Describe the changes in economics and work demographics in the postindustrial era in the United States. The occupational structure in the United States—the number and types of jobs available—experienced major shifts during the 20th century. In 1900, the United States economy was nearly equally distributed among the three economic sectors, with 38% of jobs in agriculture, 36% in manufacturing, and 26% in services. Today, the United States economy is dominated by the services sector, with more than 90% of jobs in the services sector, only 5.5% in manufacturing, and less than 1% in agriculture. Most of the reduction in jobs in the agricultural sector occurred before In contrast, blue-collar manufacturing jobs remained nearly level until the mid-1970s but then began dropping precipitously. Blue-collar jobs are manual-labor occupations often having relatively low status, such as machinist, assembly-line worker, truck driver, or auto mechanic.

39 Labor Unions Labor unions: Groups of workers who unite to engage in collective bargaining with owners Strikes: Temporary work stoppages by a group of workers to seek changes in working conditions Work to rule: The slowdown of work by meticulously following all regulations and doing only the minimum work legally required Lockout: An action in which the company is locked up and workers are not permitted to work or draw pay until the conflict is resolved Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.9 Postindustrial US Economy and Work LO: Describe the changes in economics and work demographics in the postindustrial era in the United States. The first half of the 20th century was dominated by the drop in agricultural employment as people left the farm and moved into the cities and take jobs in manufacturing. This was a period that saw rapid growth of labor unions— groups of workers who unite to negotiate as a group with corporations regarding issues such as wages, benefits, and working conditions. Labor unions are based on the recognition that, while both labor and management desire to keep the company competitive and to survive, there is an inherent conflict between them. Labor unions are found in all Western societies and are protected in the United States under the First Amendment right of freedom of association. Through collective organization, unions seek to reduce the power companies have over individual workers. Workers may resort to strikes— temporary work stoppages by a group of workers to seek changes in working conditions. When strikes are illegal or forbidden in existing contracts, workers may work to rule— slow down their work by meticulously following all regulations and doing only the minimum work legally required. Similarly, management may stop work by enforcing a lockout in which the company is locked up and workers are not permitted to work or draw pay until the conflict is resolved. Labor unions increased membership in the United States from 3% of the nonfarm labor force in 1900 to 23% by 1945, peaking in the 1950s, with more than 33% of the nonfarm labor force. Since then, union membership has declined to 12.3% in Labor unions are not only losing members but have been forced to accept less favorable terms at the negotiation table in recent years—often including age reductions and loss of benefits—to retain jobs. In contrast to the US, 80% of workers in Scandinavian countries belong to unions, 50% in Europe, and 33% in Canada. The only areas in which union participation held steady or increased slightly in recent years in the US were among state employees and service workers. However, after the 2010 elections, many state governments attempted to handle ongoing budget crises by scaling back wages and benefits of unionized state workers. There are many reasons for the decline of labor unions in the United States. There was always strong management opposition to labor unions. In the 1930s, management sometimes hired people to beat up or kill labor organizers. In the 1980s, many union plants closed, laying off union workers, only to start up again with a new name as a nonunion shop, or the jobs were shipped overseas to countries with cheaper labor. The composition of the workforce has changed away from blue-collar workers and men and toward women and faster-growing, white-collar and service occupations that are more resistant to unionization. Technological change has often hurt the bargaining position of union workers or eliminated their jobs altogether. For example, skilled typesetters who were unionized have been replaced by computer operators who typically are not unionized.

40 Deindustrialization Deindustrialization: The systematic withdrawal of private investment from manufacturing and the decline of industry through plant shutdowns, layoffs, and downsizing Downsizing: Reducing the size of companies to cut costs by laying off workers or even selling parts of the company. Telecommuting: Occurs when workers work from their homes and communicate with their workplace through communications technologies, such as Skype, interactive voice, video, and data conferencing Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.9 Postindustrial US Economy and Work LO: Describe the changes in economics and work demographics in the postindustrial era in the United States. Deindustrialization is the systematic withdrawal of private investment from manufacturing and the decline of industry through plant shutdowns, layoffs, and downsizing. Downsizing is reducing the size of companies to cut costs by laying off workers or even selling parts of the company. The US economy experienced a rapid and dramatic drop in “smokestack” industries such as steel. The number of professionals and technical workers almost quadrupled between 1900 and 2000 but is now more stable. This change is often attributed to increased technology, the greater role of new knowledge in our economy, and sufficient wealth that people can afford a wide array of professional services. Both clerical and managerial jobs increased during most of the century but were beginning to drop slowly by its end. Their early increases may have reflected the dawn of the information age and the increased need for people to manage and process information. Their more recent decrease may reflect the impact of the information age and early stages of employing computers to replace low-level clerical and managerial workers. The fastest-growing occupations are all in the services, including the health professions and computing. In contrast, the fastest-declining occupations are all in manufacturing. Because many of these postindustrial jobs are based around information, they can often be performed from a distance through telecommuting, in which workers work from their homes and communicate with their workplace through communications technologies like Skype, including interactive voice, video, and data conferencing. More than 26 million American workers reported telecommuting at least part time in a 2006 survey.

41 Dual Labor Market and Workforce Diversity
Dual labor market: A relatively advantaged primary form of employment and a relatively disadvantaged secondary form of employment Primary labor market: Enjoys relatively good working conditions, reasonably high pay, opportunity for advancement, and—most important—job security Secondary labor market: Employees routinely experience high turnover, low job security, few or no benefits, low wages, and little opportunity for advancement Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.9 Postindustrial US Economy and Work LO: Describe the changes in economics and work demographics in the postindustrial era in the United States. The United States and most other industrial capitalist economies have a dual labor market in which there is a relatively advantaged primary form of employment and a relatively disadvantaged secondary form of employment. Workers in the primary labor market enjoy relatively good working conditions, reasonably high pay, opportunity for advancement, and—most important—job security. Primary labor market workers include physicians, lawyers, accountants, teachers, civil service workers, and unionized blue-collar jobs. Workers in the secondary labor market have none of these things. They routinely experience high turnover, low job security, few or no benefits, low wages, and little opportunity for advancement. The secondary labor market includes cashiers at fast-food restaurants, migrant workers, many construction workers, and “temps”—temporary workers hired only for short periods of time. Workers in the secondary labor market are often women or members of minority populations who are less likely to be organized for collective bargaining. They are more likely to be in the secondary labor market is that their average incomes tend to be lower than those of white males. In addition to more often finding themselves in the secondary labor market, women for many years participated in the labor market much less than men. Many corporations in the United States rely on the secondary labor market much more than they once did. This represents a significant change in the labor contract, as many companies no longer offer the benefits and job security of permanent jobs.

42 Professions Profession: A high-status occupation based on abstract knowledge enjoying considerable autonomy and authority and, in turn, serving the public good and regulating its members Key features: Abstract knowledge Autonomy Self-regulation Authority Altruism Professionalization: A process of defining a type of work as a profession Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.9 Postindustrial US Economy and Work LO: Describe the changes in economics and work demographics in the postindustrial era in the United States. A profession is a high-status occupation based on abstract knowledge, enjoying considerable autonomy and authority and, in turn, serving the public good and regulating its members. Key features of professions include: 1. Abstract knowledge— Work is based on abstract, theoretical knowledge rather than just training, and members learn through education by other members of the profession. 2. Autonomy— Members enjoy considerable autonomy because their knowledge makes them more qualified to exercise judgment in their field than others. 3. Self-regulation— They regulate themselves with a code of ethics, and other members of the profession determine whether someone should be permitted to practice in the profession. 4. Authority— They have authority that is recognized by other subordinate occupations. 5. Altruism— They are expected to use their position of favor for the public good. Because of the advantages of professions, many occupational groups attempt to renegotiate and redefine their occupational activities through professionalization—the process of defining a type of work as a profession. Members of professions gain more autonomy and control over their work and experience greater power over their clients. On the other hand, professions can also serve the interests of their clients because professionalism imposes a set of standards and discipline on the occupation designed to upgrade services and “weed out” incompetent practitioners.

43 The Rationalization of Work (slide 1 of 2)
Rationalization: A process in which traditional methods and standards of social organization based on tradition, belief, and even magic are replaced with new methods and standards of social organization based on objectively calculable scientific criteria Scientific management (Taylorism): Applies scientific and engineering principles to human labor by breaking a complex task into simple components and using time-and-motion studies to specify every detail of the job to maximize efficiency Mass production: A process of production in which products are standardized, parts are interchangeable, precision tools fit parts together precisely, and the production is mechanized to produce a continuous high volume Assembly line: A mode of production in which a complex task is broken into individual tasks, with each worker performing only one or a few of the tasks repeatedly Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.9 Postindustrial US Economy and Work LO: Describe the changes in economics and work demographics in the postindustrial era in the United States. One of the most important distinctions among occupations is that between managers and workers. In 2010, 11% of all US workers were classified as managers (15 million people). Historically, men have been more likely to be managers than women. In 2010, 62% of managers were men aged 20 and over, and 38% were women aged 20 and over. Only 9% of all women aged 20 and over were managers, compared to 13% of all men aged 20 and over. The nature of work for both managers and workers who are managed has changed dramatically since 1900 as a result of pervasive rationalization of work. Rationalization is a process in which traditional methods and standards of social organization based on tradition, belief, and even magic are replaced with new methods and standards of social organization based on objectively calculable scientific criteria. In the area of work and the economy, rationalization includes the processes of scientific management, bureaucratization, and mechanization. At the beginning of the 20th century, Frederick Taylor, an industrial engineer, created a process of scientific management to make work more efficient and economical. Scientific management (Taylorism) applies scientific and engineering principles to human labor by breaking a complex task into simple components and using time-and-motion studies to specify every detail of the job to maximize efficiency. Scientific management reduced extra steps to perform a task and made assembly lines more efficient. Incentive payment systems to workers were often used to further increase worker efficiency and effort. Classic examples of scientific management are mass production and the assembly line. Mass production is a process of production in which products are standardized, parts are interchangeable, precision tools fit parts together precisely, and the production is mechanized to produce a continuous high volume. An assembly line is a mode of production in which a complex task is broken into individual tasks, with each worker performing only one or a few of the tasks repeatedly. This method of production today dominates many industries, including fast-food restaurants.

44 The Rationalization of Work (slide 2 of 2)
Technology: Consists of the knowledge, tools, and machines used to produce artifacts or manipulate the environment Deskilling: A reduction in expertise, training, and experience required to perform a job Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.9 Postindustrial US Economy and Work LO: Describe the changes in economics and work demographics in the postindustrial era in the United States. Technology consists of the knowledge, tools, and machines used to produce artifacts or manipulate the environment. In industrial economies, technology often replaced the muscle power of people through the creation of more powerful machines such as steam engines. It also replaced the skilled craftsman with someone much less skilled. In today’s information economy, the effects of technology are somewhat different. Zuboff identifies several ways in which computers are transforming work, including deskilling, a reduction in expertise, training, and experience required to perform a job. Computers make it possible for the same tasks to be performed by people having fewer skills because they can rely upon the computer to provide the necessary expertise.

45 Bureaucracy Bureaucracy: The primary design principle of modern formal organizations; based on a hierarchical structure of authority, codified rules and regulations, and principles of fairness and efficiency Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.9 Postindustrial US Economy and Work LO: Describe the changes in economics and work demographics in the postindustrial era in the United States. Bureaucratization has affected the role of managers in much the same way that scientific management affected the role of workers. A bureaucracy is the primary design principle of modern formal organizations, based on a hierarchical structure of authority, codified rules and regulations, and principles of fairness and efficiency. The same principles that ensure decisions will be made objectively and fairly, according to recognized rules and procedures to the extent they are followed, tie the hands of managers, regulating their behavior in a manner similar to the detailed work plan created by time-and-motion experts for assembly-line workers. The more explicit the regulations and the more rigidly they are followed, the less the discretion of the manger and the fewer skills required. While scientific management and mass production often produced gains in productivity and profitability, they also increased alienation from work and led to unemployment and deskilling. Deskilled workers are more easily replaced and have less power relative to management and are likely to have lower wages.

46 Entrepreneurship, Self-Employment, and Venture Capitalism
Entrepreneur: A person who takes an innovative idea and, through financing and business savvy, turns it into a viable business Private equity: Investors contribute funds in exchange for a share of ownership or equity in a company Angel investors: Affluent individuals who provide initial capital for a business startup, usually in return for a share of ownership Venture capital: Companies in business to loan money to high-risk, high-potential, early-stage growth startup companies Crowdfunding: A process whereby entrepreneurs post their idea and proposal on a website asking people to contribute small amounts either to purchase a product in advance or to gain equity in the business Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.9 Postindustrial US Economy and Work LO: Describe the changes in economics and work demographics in the postindustrial era in the United States. An entrepreneur is someone who takes an innovative idea and, through financing and business savvy, turns it into a viable business. The term is often used in conjunction with starting a new business (startup companies) but can also be encouraged within existing organizations (intrapreneurship). Many entrepreneurs begin with self-employment and may have started only because they became unemployed. Others start even smaller, perhaps working at the entrepreneurial enterprise only part time while they keep their “day job.” Participating in some type of entrepreneurial activity is fairly common. Half of all working men in the United States have had a period of self-employment for one or more years by the time they retire. Financing is usually crucial for startup companies because they are often high risk and not well established enough to secure a bank loan or sell stock to the public. Entrepreneurial activity is often financed by some form of private equity in which investors contribute funds in exchange for a share of ownership or equity in a company. For smaller startups involving one or two individuals, initial funding may come in the form of “financial bootstrapping” or “sweat equity” in which the company’s initial activities are used to generate funds to cover expenses or to reinvest profits in the new business to finance growth. For projects with a high estimated value, the funds needed are usually much larger, so initial funding may be sought from “angel investors”— affluent individuals who provide initial capital for a business startups, usually in return for a share of ownership. Later, a promising startup may seek additional funding from venture capital funds—companies in business to loan money to high-risk, high-potential, early-stage startup companies. However, here—as elsewhere—women are often at a disadvantage. According to Astia, a nonprofit organization dedicated to helping women form startup companies, women create only 8% of the venture-backed tech startups. One alternative source of funding that women might find more hospitable is crowdfunding—a process in which entrepreneurs post their idea and proposal on a website asking for people to contribute small amounts either to purchase a product in advance or to gain equity in the business. It is often claimed that new startups and small businesses account for a large proportion of new jobs in our economy. In 2010 small firms with from 1 to 4 employees created 937,000 new jobs and accounted for 16.4% of gross job gains—more than the 15% of gross job gains produced by firms of 100 employees or more. Unfortunately, many small firms go out of business each year. So, while startups and small businesses create jobs, those jobs may be less secure than positions at large corporations.

47 Unemployment and Underemployment
Unemployment rate: In the United States, the percentage of unemployed workers in the labor force actively seeking jobs Underemployed: People working at part-time jobs or self-employed and working less than desired because they cannot get a full-time job Seasonal unemployment: Unemployment due to seasonal variations, such as school teachers on summer vacation, or variations in weather, which often affect agriculture, construction, and tourism jobs Cyclical unemployment: Unemployment resulting from lower production rates during recessions Structural unemployment: Unemployment that results when the skill set of unemployed workers does not match the skills required for available jobs or when the unemployed are in a different location than available jobs Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.9 Postindustrial US Economy and Work LO: Describe the changes in economics and work demographics in the postindustrial era in the United States. The unemployment rate in the United States is measured by the percentage of unemployed workers in the labor force who are actively seeking jobs based on a monthly survey of 60,000 households carried out by the US Bureau of Labor Statistics. Official statistics, though, are not perfect. They do not include “discouraged” workers who would like to work but have given up trying to get a job, those who have never worked, or those who are unable to work. Nor do these statistics include people who are underemployed— people working full time at a much lower salary than they used to make or people working part-time jobs or self-employed and working less than desired because they cannot get a full-time job. Social scientists distinguish three kinds of unemployment: seasonal, cyclical, and structural. Seasonal unemployment is unemployment due to seasonal variations such as school teachers on summer vacation or jobs hampered by bad weather. Cyclical unemployment is unemployment resulting from lower production rates during recessions. Structural unemployment is unemployment that results when the skill set of unemployed workers does not match the skills required for available jobs or when the unemployed are in a different location than available jobs. Structural unemployment often arises from structural changes in the economy in which some jobs are replaced by automation or are moved overseas to low-wage countries. The rapid deindustrialization experienced in the last few decades in the United States has resulted in millions of workers losing jobs and having to either be retrained or, more likely, settle for lower-paying, less-skilled jobs than the ones they lost.

48 Underground and Informal Economies
Underground economy: All economic transactions involving income that is not reported to the government as required by law Informal economy: Unpaid labor, such as doing housework, repairing one’s own car, or performing voluntary charity work Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.9 Postindustrial US Economy and Work LO: Describe the changes in economics and work demographics in the postindustrial era in the United States. Every society, whether capitalist or socialist, permits some forms of economic exchange and prohibits others. In some former communist countries, many forms of economic exchange between individuals were illegal, such as the buying and selling of foreign currency. In those countries, when such exchange occurred, it did so on the “black market.” In capitalist countries like the US, a wider range of economic transactions are usually permitted, but there are strict laws requiring reports of those economic activities for purposes of computing taxes. In addition, some transactions, such as extortion, money laundering, the sale of illegal drugs, prostitution, illegal gambling, theft, and other criminal activities, are illegal. We often use the term the underground economy to indicate all economic transactions involving income that is not reported to the government as required by law. While most people do not engage in illegal activities, most do participate in the underground economy fairly regularly. By one estimate, there is as much as $170 billion in taxes lost each year on unreported income in the US. Individuals and households often engage in the “informal economy“— unpaid labor such as doing housework, repairing one’s own car, or performing voluntary charity work.

49 Corporations and the Economy
Corporation: A legal entity separate from its owners Monopoly: Occurs when a single firm dominates an industry Oligopoly: Occurs when a few firms dominate an industry Learn Sociology Chapter 14: Politics and Economy in Global Perspective 14.9 Postindustrial US Economy and Work LO: Describe the changes in economics and work demographics in the postindustrial era in the United States. Modern capitalism has been increasingly influenced by corporations. In 2007, there were more than 6 million business firms in the United States employing one or more workers. A few large corporations account for the majority of corporate assets, with the largest 200 corporations controlling more than half of all manufacturing assets. Corporations thus tend to concentrate wealth. In the United States, a corporation is a legal entity separate from its owners. For most intents and purposes, a corporation is treated as a person, with many of the same individual rights. A corporation can enter into contracts, buy and sell property, and sue and be sued. A corporation shields its owners from certain risks and liabilities. There is one important way in which corporations are different from individuals, however. While individuals usually balance their own self-interest with some sense of social responsibility, corporations, by law, are required to maximize profits for their shareholders. Capitalism is based on free competition. That competition is limited when a single firm dominates an industry—a monopoly— or when a few firms dominate an industry—an oligopoly. To preserve competition and to make sure that capitalism leads to efficient and fair production, US law prohibits any one firm obtaining a monopoly. However, many industries are dominated by an oligopoly of only a few firms. When oligopolies are present, those few firms often cooperate in setting prices—known as price fixing—rather than competing. Corporations often enhance their dominance over an industry through mergers and acquisitions. Independent competition is further reduced when there are extensive linkages among corporations through stock ownership or seats on boards of directors. Taken together, the wealth concentrated in corporations, their legal protections, and their ability to influence the governments that regulate them mean that corporations play a very powerful role in modern capitalist economies.


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