Politics and the Economy Chapter 11 Politics and the Economy

Module 47 Power and Authority Political system: social institution responsible for implementing and achieving society’s goals Interacts closely with economic system: social institution thorough which goods and services are produced, distributed, and consumed Politics: “who gets what, when, and how” (Lasswell)

Power Power: ability to exercise one’s will over others (Weber) Module 47 Power Power: ability to exercise one’s will over others (Weber) Sources of power in political systems Force: actual or threatened use of coercion to impose one’s political dissidents Influence: exercise of power through process of persuasion Authority: institutionalized power recognized by the people over whom it is exercised

Types of Authority Three ideal types of authority (Weber) Module 47 Types of Authority Three ideal types of authority (Weber) Traditional authority: legitimate power conferred by custom and accepted practice Rational-legal authority: power made legitimate by law Charismatic authority: power made legitimate by leader’s exceptional personal or emotional appeal to his or her followers

Module 47 Types of Government Monarchy: Form of government headed by a single member of a royal family Oligarchy: Form of government in which a few individuals rule

Types of Government Dictatorship and Totalitarianism Module 47 Types of Government Dictatorship and Totalitarianism Authoritarianism (Dictatorship): Government in which one person has nearly total power to make and enforce laws Totalitarianism: Involves virtually complete government control and surveillance over all aspects of a society’s social and political life

Types of Government Democracy Government by the people Module 47 Types of Government Democracy Government by the people Representative democracy: Elected members of legislatures make laws Direct democracy: direct participation by all citizens

Legal definition typically requires formal declaration of hostilities Module 47 War and Peace War: Conflict between organizations that possess trained combat forces equipped with deadly weapons Legal definition typically requires formal declaration of hostilities

Module 47 War Global view studies how and why nations become engaged in military conflict Nation-state view stresses interaction of internal political, socioeconomic, and cultural forces Micro view focuses on social impact of war on individuals and their groups

Module 47 Peace Peace: Absence of war and proactive effort to develop cooperative relations among nations Global Peace Index: U.S. ranked 97 on list of 121 nations Since 1990s, 90% of armed conflicts occurred within states

Module 49 Economic Systems Industrial society: Society that depends on mechanization to produce its goods and services Capitalism Socialism

The Industrial Revolution Brought five changes to the economy New sources of energy Centralization of work in factories Manufacturing and mass production Specialization Wage labor New laws banned child labor, set minimum wage levels, improved workplace safety, and extended schooling and political rights to a large segment of the population

The Information Revolution and Postindustrial Society Postindustrial Economy A productive system based on service work and high technology Driving economic change: third technological breakthrough Computer Three important changes From tangible products to ideas From mechanical skills to literacy skills From factories to almost anywhere

Sectors of the Economy Primary Sector The part of the economy that draws raw materials from the natural environment Secondary Sector The part of the economy that transforms raw materials into manufactured goods Tertiary Sector The part of the economy that involves services rather than goods

Capitalism Four distinctive features: Private ownership of the means of production Pursuit of personal profit Competition Lack of government intervention (Laissez-faire)

Socialism Three distinctive features: Public ownership of the means of production. Pursuit of collective goals. Centralized decision-making.

Module 49 The Informal Economy Informal economy: Transfer of money, goods, or services is not reported to the government Difficult to measure In developing nations, informal economy represents 40% to 60% of total economic activity

Conglomerates and Corporate Linkages Giant corporations composed of smaller corporations Form as Corporations enter new markets New companies spin off Mergers Conglomerates are linked because they own each other’s stock

Corporations are linked through Interlocking directorates Networks of people who serve as directors of many corporations Linkages encourage illegal activity Price-fixing Companies share information about their pricing policies

General Motors Board - Interlocking Directorates

Interlocking Directorates

Interlocking Directorates

Interlocking Directorates

Corporations: Are They Competitive? Monopoly The domination of a market by a single producer Forbidden by federal law Oligopoly The domination of a market by a few producers Legal and common Federal government regulates to protect the public interest Often too little, too late, resulting in harm to millions

Corporations and the Global Economy Corporations now account for most of the planet’s economic output Biggest are based in U.S., Japan, and Western Europe Their marketplace is the entire world Know that poor countries contain most of the world’s people and resources Modernization theory – raises living standards Dependency theorists – increase inequality

The Changing Face of the Workforce Module 50 The Changing Face of the Workforce U.S. workforce is constantly changing Sociologists and labor specialists foresee workforce increasingly composed of women and racial and ethnic minorities 54% of new workers expected to be women from 1984 to 2014 More diverse workforce means relationships between workers more likely to cross gender, racial, and ethnic lines

Module 50 Deindustrialization Deindustrialization: systematic, widespread withdrawal of investment in basic aspects of productivity Can take the form of corporate restructuring Downsizing: reductions in a company’s workforce as part of deindustrialization Social costs cannot be overemphasized

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The Globalization of Capitalism A New Global Structure and the Global Oppression of Workers Stagnant Paychecks Trends in Leisure Telecommuting The New Economic System and the Old Divisions of Wealth © 2013 Pearson Education, Inc. All rights reserved.

The Globalization of Capitalism High insecurity with layoffs, plant closings, and the prospect of more of the same Half of the entire country’s income goes to the richest fifth of Americans Only 3 percent goes to the poorest fifth The Global Superclass © 2013 Pearson Education, Inc. All rights reserved.

The Inverted Income Pyramid: The Proportion of Income Received by Each Fifth of the U.S. Population © 2013 Pearson Education, Inc. All rights reserved.