Chapter 16 The Economy: Historical Overview The economy: the social institution that organizes society’s production, distribution, and consumption of goods and services. Members of the earliest human societies were hunters and gatherers living off the land. When people harnessed animals to plow, the economy was 50 times productive.

The Economy: Historical Overview The Agricultural Revolution: the resulting surplus mean that not everyone had to produce food. Many took on specialized work. Soon towns sprang up, making the economy a distinct social institution

The Economy: Historical Overview The Industrial Revolution: The development of industry changed the economy. This raised the standard of living. The benefits were not shared equally. The Information Revolution: automated machinery reduced the role of human labor. The computer has blurred the line between work and home life.

Three Sectors of the Economy The primary sector: the part of the economy that draws raw materials from the natural environment. The secondary sector: the part of the economy that transforms raw material into manufactured goods. The tertiary sector: the part of the economy that involves services rather than goods.

Two Types of Economic Systems: Paths to Justice Capitalism: an economic system in which natural resources and the means of producing goods and services are privately owned. Socialism: an economic system in which natural resources and the means of producing goods and services are collectively owned.

Economic Systems: Paths to Justice Welfare capitalism: an economic and political system that combines a mostly market-based economy with extensive social welfare programs.

Work in the Postindustrial Economy Regions of the economy with greater labor force participation are more affluent. Farming has rapidly declined, shrinking the primary sector. A majority of workers have moved into service occupations, creating a vast middle class.

The Changing Patterns of Work in the United States

The Dual Labor Market The primary labor market: jobs that provide extensive benefits to workers. Includes white-collar as well as upper management positions. The secondary labor market: jobs that provide minimal benefits to workers. Includes those employed in low-skilled, low-level sector jobs.

Looking Ahead: The Economy of the 21st Century Our economy provides much better for some than it does for others. The Industrial Revolution continues to change our economy. Our society must face the challenge of providing millions of people with the computer skills necessary to survive. In the new century, the economy will also become increasingly global.

Politics: Historical Overview Politics: the social institution that distributes power, sets a society’s agenda and makes decisions. Power: the ability to achieve desired ends despite resistance from others. Government: a formal organization that directs the political life of a society. Authority: power that people perceive as legitimate rather than coercive.

Three Types of Authority Traditional authority: power legitimized through respect for long-established cultural patterns. Rational-legal authority: power legitimized by legally enacted rules and regulations. Charismatic authority: power legitimized through extraordinary personal abilities that inspire devotion and obedience.

Four Types of Government Monarchy: a single family rules from generation to generation. This is typical in agrarian societies. Monarchs remain in several European nations. Democracy: a type of political system which gives power to the people as a whole. Most rich countries of the world claim to be democratic.

Four Types of Government: Continued Totalitarianism: a highly centralized political system that extensively regulates people’s lives. Such governments are total concentrations of power. They allow no organized opposition. Authoritarianism: denies popular participation in government. The government is indifferent to people’s needs. People have little opportunity to voice their opinion.

Corporations Corporations: an organization with a legal existence, including rights and liabilities, apart from that of its members. Incorporating makes an organization a legal entity unto itself. Incorporating also protects the wealth of owners from lawsuits.

Politics in the United States The political culture in the United States can be summed up in one word: individualism. This emphasis derives from the Bill of Rights, which guarantees freedom from undo government interference. Welfare State: a range of government agencies and programs that provides benefits to the population.

Special-Interest Groups Special Interest group: a political alliance of people interested in some economic or social issue. Political action committees (PACS): organizations formed by special-interest groups, independent of political parties, to pursue political aims by raising and spending money.

Theoretical Analysis of Power in Society The pluralist model: sees power as dispersed among many competing interest groups. The power-elite model: sees power as concentrated among the rich. The Marxist political-economy model: explains politics in terms of society’s economic system.

Terrorism, War, and Peace September 11, 2001 was the most serious terrorist act ever recorded. Terrorism: acts of violence or the threat of such violence used by an individual or group as a political strategy. Terrorist try to paint violence as a legitimate political tactic. War: organized armed conflict between the people of various societies, directed by their governments. Approaches to peace: 1. Deterrence. 2. High-technology defense 3. Diplomacy and disarmament. 4. Resolving underlying conflict.