1. Political & Economic Institutions
Power, Authority & Economics

2. Power & authority

3. Power & Authority
There is an incredibly close relationship between business and government in the U.S.
Economic institutions – determines how goods and services are produced and distributed
Economic decisions affect how valuable resources are shared between organizations and the general public, conflict is bound to arise…this is when…
Political institutions – determine how power is obtained and exercised
It’s very difficult to separate the two…but from a Sociological perspective we can think of economics as distribution of resources and politics as the exercise of power

4. What is POWER? Remember our friend max weber?
Weber defined power as the ability to control the behavior of others
Takes many forms…
some wield great power through personal appeal and magnetism (JFK, Martin Luther King Jr. and César Chávez)
Weber also recognized coercion meaning control through force
i.e. a blackmailer might extort money from a politician
Victims do not believe that this use of power is right and will resent it and want to fight back
*Weber recognized that a political system based on coercive power is inherently unstable…the abuses of he system cause people to eventually rise against it*

5. What is Authority? Remember our friend max weber?
Weber believed that a political institution must rest on a stable form of power if its to function and survive; Authority – Power that is accepted as legitimate means by those subject to it
i.e. citizens pay taxes because they believe their government has the right (authority) to collect the money
Weber defined three types of authority:
Charismatic
Traditional
Rational-legal

6. Charismatic Authority
Arises from a leader’s personal characteristics
Lead through the power or strength of their personalities OR trust they inspire in a large group of people
For Modern nation-states, charismatic authority alone is too unstable to provide a permanent basis of power
It is linked to the individual
When charismatic leaders die, the source of power is removed as well
Even governments that are controlled by charismatic leaders must eventually come to rely on other types of authority

7. Charismatic leaders
“Hitler’s death brought an abrupt, absolute end to National Socialism…without its only true leader it burst like a bubble…what had appeared to be the most powerful and fearsome political force of the twentieth century vanished overnight. No other leader’s death since Napoleon had so completely obliterated a regime.” - Historian John Toland

8. Charismatic leaders

9. Traditional Authority
The legitimacy of the leader is rooted In custom
Early Kings (particularly in Europe) often claimed to rule by the will of God (Divine Right)
Power was peacefully transferred because only a few individuals (usually offspring or close relatives) were even eligible to rule
Characteristics?
Usually preindustrial societies
Population’s collective memory – people accept it because that’s all they’ve known
Strong power in political system, absolute, almost godlike (ancient Egypt)
Why decline?
Traditional authority only remains strong as long as everyone shares the same belief and way of life
Society industrializes modern scientific thinking replaces old ways of thinking, social changes, cultural diversity from immigration cuts at the previously accepted authority

10. TRADITIONAL leaders Emperor Tongzhi (Tung-Chih) Pope Francis
King Henry VIII

11. Rational-legal Authority
Most modern governments are based on this form in which the power resides in the offices, rather than the officials
Those who hold a government position are expect to operate on the bases of specific rules and procedures that define and limit their rights and responsibilities
Leaders are expected to stay within the boundaries of their legal authority – even president’s can lose their power (Richard Nixon) if their abuse of power is made public
Power is assumed only when an individual occupies the office…so when a person leaves their formal position, they also lose their power

12. Rational-legal leaders

13. Types of Political Systems
Just as societies have evolved, so have their governmental systems
Hunter & Gatherer – very little formal government and political leaders were selected on the basis of exceptional physical strength or personal charisma
Agricultural societies were the first time we see formal governmental structures emerge
Societies become more diversified with the development of commerce, industry and technology and government begins to take on the form of a more national position
First ones that appear are in France and England in the middle ages (1400s)
Industrialization ushers in rational-legal authority
Three types of contemporary nation-states
DEMOCRATIC
TOTALITARIAN
AUTHORITARIAN

14. 1. DEMOCRACY
In its purest form, a democracy involves ALL citizens in self-government
Also called a “direct democracy” we saw practiced by the ancient Greeks
We more commonly see a representative democracy – a system of government that uses elected officials to fulfill majority wishes
Operates on two big assumptions:
Realistically, not everyone in modern society can be actively involved in all political decision making
Political candidates who fail to satisfy the wishes of the majority are not expected to win reelections
In the U.S. we have the two-party system, so it’s relatively strong; in Europe, where third parties play a more active role, the argument is they are more representative of the people
This form is more fragile because the shifting political alliances may be able to force new elections after short periods of time

15. Representative Democracy
Democracies
Direct Democracy
Representative Democracy

16. 2. Totalitarian
A rule with absolute power attempts to control all aspects of society
A single party, typically controlled by one person
Well-coordinated campaign of terror
Total control of all means of communication
Monopoly over military resources
A planned economy that is directed by a government bureaucracy

17. 2. Totalitarian Most famous example is Nazi Germany under Adolf Hitler
Single party – Hitler and the NAZI party held all the power
Terror – Gestapo secret police and the SS brutally and systematically killed 11 million people total
Communication – Nazis seized or shut down nearly all news media
Military – Hitler dominated the military and was the sole decider on military issues
Economy – 4 year plan included strategies for budgets, production, organization of factories, and forced labor

18. 3. authoritarian
Authoritarianism is somewhere in the middle…although closer to totalitarian
A political system controlled by elected or nonelected rulers who usually permit some degree of individual freedom
Countless governments have leaned toward totalitarianism but have fallen short of checking all the categories and therefore get classified as authoritarian
I.E. Certain monarchies (shahs in Iran) and military seizures (Fidel Castro in Cuba)

19. Political power in the USA

20. Influence of the Vote
Like most countries, the U.S. emphasizes political participation through voting…but how much choice do we really have?
In reality, the amount of real choice is limited
The range of candidates from which to choose is restricted because of the power of political parties
To get party support, a candidate must appeal to the widest possible number of voters…as a result, candidates resemble each other more than they differ
Money! Elections in the U.S. cost such a great deal of money that our choices are limited by either those endorsed by the major parties, or who are independently wealthy
How do we base our votes?
Most of our beliefs are expressed as political opinions are gained through Political socialization – formal (government class) and informal processes by which a person develops political opinions

21. Influence of the Vote The family Education Mass Media
Influence of the family is strong and what we tend to see is the political affiliations of your parents determine your political affiliations
Education
More highly education, the more political knowledge and more likely to participate
Mass Media
TV and social media determine what issues, events and personalities are in the public eyes
Economic Status & Occupation
Lower economic status = more government intervention and vice versa
Corporate managers = favor tax shelters and aid businesses than hourly workers
Age & Sex
Young adults more progressive than older persons
Women tend to be more liberal due to issues like abortion, health care, government-supported child care

22. PLURALISM VS. ELITISM
Pluralism – political decisions are made as a result of bargaining and compromise among special interest groups
No one group holds the majority of power, rather it is widely distributed throughout a society or community
Functionalists think that pluralism based on the existence of diverse interest groups best describes the condition in the U.S. today
The majority of political decisions are made by an elite few
Interest group – a group that is organized to influence political decision making
They share one or more goals – NRA, AMA, ASPCA
Argue that decisions are made as a result of competition among special interest groups
Interest groups are not new: Early movements in the 1900s – Women’s Christian Temperance Union; 1960s they explode – Civil Rights groups, Anti-War groups, environmental groups, women’s rights groups, etc.

23. PLURALISM VS. ELITISM

24. PLURALISM VS. ELITISM
Elitism – a community of society is controlled from the top by a few individuals or organizations
Power is concentrated in the hands of an elite group whose members have a common background or common interests
Sociologist C. Wright Mills was a leading proponent of the elite perspective
He argues that key people in each area of the economy, Politics, and the military overlap and form a unified group that he called the power elite
Elites are educated in select boarding schools, military academies, Ivy League schools
Protestant Christians
Come from upper-class families
Often know each other, have had mutual acquantices for years, and intermarry
Let’s just take a look…

25. PLURALISM VS. ELITISM

26. PLURALISM VS. ELITISM

27. PLURALISM VS. ELITISM

29. ECONOMIC SYSTEMS

30. CAPITALISM
Capitalism – an economic system based on private ownership of property and the pursuit of profit
Capitalists believe that individuals, not the government, deserve to own and to control land, factories, raw materials, the means (tools) of production as well as unrestricted competition with minimum government interference
Adam Smith
ARGUED THAT A COMBINATION of private ownership of property and the pursuit of profit brings advantages to society
because of competition, individual capitalist will always be motivated to provide the goods and services desired by the public at process the public is willing and able to pay
NO PURE CAPITALIST ECONOMY EXISTS IN THE WORLD
Monopolies
Oligopolies

31. monopolies
Monopolies – companies that have control over the production or distribution of a product or service
Capitalism fosters this to rise
Monopolies permit price fixing – consumers must choose between buying at the “going price” set by the seller or not buying at all
Microsoft
Create windows operating system and computer manufacturers usually include Windows in their computer
1990s, they insist that they also include its internet browser (internet explorer) and they were instructed not to install another browser, if they did, Microsoft would withhold their license to SELL WINDOWS ON THEIR MACHINES

32. Oligopolies
Oligopolies – combinations of companies that contrl the production or distribution of a product or service
Capitalism fosters this to rise
Oligopolies also permit price fixing – consumers must choose between buying at the “going price” set by the seller or not buying at all
Let’s take a look at a few examples…

36. Role of Government In CAPITALISM
Adam Smith never said that government should be strictly hands-off, but he did strongly oppose overregulation by the government
Argued that one of the main roles of government was to protect its citizens from injustice and Smith knew that the state might have to “step in” to prevent abuses by businesses
Government in the U.S. economy
Government functions include the regulation of commerce, development of a strong currency, creation of uniform standards for commerce and the provision of a stable system of credit
Government has continued to help business, labor, and agriculture
I.E. government bailout of Chrysler and GM

37. SOCIALISM
Socialism – economic system founded on the belief that the means of production should be controlled by the people as a whole
Under a socialist system, government direct and controls the economy; the state is expected to ensure all members of society to share in the monetary benefits
How does it benefit society?
Big argument is tat it helps to benefit workers
Under capitalism, workers receive wages below the value their labor produces and have little control over their work
In theory, workers under socialism profit because both the state and the workplace exist for their benefit
Does it really work?

38. SOCIALISM Cases of pure socialism is rare
Strict socialist systems have not been successful in eliminating income inequalities NOR have they been able to develop overall economic plans that guarantee sustained economic growth
Soviet Union
Agricultural and professional work was performed privately
Housing were privately owned
Private enterprise existed in Poland and in fact, Poles could travel abroad for work and when they did, they learned about capitalist methods and imported goods to fill demand…and brought back hard currency

39. MIXED ECONOMIC SYSTEMS
Most nations fall between the extremes of capitalism and socialism…yes even our precious u.s.
Europe
Former Soviet nations like the Czech Republic and Slovakia, Hungary,
Sweden, Finland, Britain, the Netherlands
Cuba
1993, the Communist party allowed some degree of capitalism by permitting plumbers, carpenters, and other tradespeople to work for profit
China
Incorporating moderate free market reforms into its economy since the late 1970s

40. THE MODERN CORPORATION

41. WHAT ARE CORPORATIONS?
First, why do we even study corporations? They have a huge importance in modern economic systems, no matter what system they fall under
U.S. Corporations not only dominate the American economic system, but they also influence the economies of nations around the world
Corporation – an organization owned by shareholders, who have limited liability and limited control
Limited liability – cannot be held financially responsible for actions of the corporation
Corporate influence
We’ve already seen how influential corporations can be on the government…but how do they wield their power?

42. Interlocking Directories vs. Conglomerates
Interlocking Directories – board of directors that interlock when the heads of corporations sit on one another’s boards
Legal for noncompeting corporations
i.e. members of GM board of directors also sit on the bards of Sony, Sara Lee and Marriot International
Conglomerates – networks of unrelated businesses operating under one corporate umbrella
i.e. Nabisco holds companies in areas from tobacco, pet foods, candy, food products, research, etc.

44. Multinational Corporations
The political influence of corporations is not confined to their countries of origins
Multinaionals – firms based in highly industrialized societeis with operating facilities throughout the world
Just how powerful are they?
Corporations like ExxonMobil, AT&T, GM, FORD, WAL-MART AND GE HAVE SALES VOLUMES EXCEEDING THE ANNUAL ECONOMIC OUTPUT OF SOME INDUSTRIALIZED NATIONS

46. MULTINATIONAL CORPORATIONS
The effects?
Defenders argue that the corporation provides developing countries with technology, capital, foreign markets, and products that would otherwise be unavailable
Critics claim that they actually harm the economies of foreign nations in which they locate by exploiting natural resources, disrupting local economies, increasing the amount of income inequality
They rely on inexpensive labor or abundant raw materials in developing nations, while returning their profits to corporate headquarters/shareholders in Developed nations

47. WORK IN THE MODERN ECONOMY

48. Changing Nature of Work
How do the economic sectors differ?
Primary sector – part of the economy producing goods from the natural environment
i.e. Farmer, miner, fisherman, rancher
Secondary sector – part of the economy engaged in manufacturing goods
i.e. factory workers of all types, from those who produce computers to those who turn out car parts…commonly called blue collar workers
Tertiary sector – part of the ecnonomy providing services
i.e. insurance, real estate, retail sales, entertainment…commonly called white collar workers

49. Changing Nature of Work
How have the sectors changed over the years?
The primary sector dominated the preindustrial economy
If we remember, physical goods were made by hand…but the balance began to shift with the mechanization of farming and economies shifting to being agricultural
Things like the cotton gin, plow, tractor, crop rotation, etc. drastically increased production
At the same time that production increased, labor demands decreased…so the primary sector began to decline
Technology keeps changing and we saw the shift from agricultural farmers to city factory workers, ushering in the secondary sector
Since WWII, white collar work has exploded…but it didn’t stop there
Fueled by computer technology, the U.S. economy has moved from a manufacturing base to a knowledge, or information base

51. Occupational Structure
Occupations – categories of jobs that involve similar activities at different work locations
The U.S. Department of Labor has identified 500 occupations with more than 21,000 various specialties
i.e. Teacher, Dental assistance, Film Producer, Electrician
What is the shape of the U.S. occupational structure
Two-tiered occupational structure
Core tier – jobs with large firms holding dominant positions within their industries
I.E. computer technology, pharmaceutical, aerospace – 35% of workers are in this tier
Peripheral tier – composed of jobs in smaller firms that either are competing for business left over from core firms or are engaged in less profitable industries
I.E. agriculture, textiles, small scale retail sales

52. Occupational Structure
Historically, jobs in the core paid more, but in the last 30 years, these industries have been scaling back…laying off experienced workers and not hiring new ones
As top tier jobs have been disappearing, peripheral jobs have become a larger share of the total jobs
Problem is, the newer industries, fueled by technology, provide few jobs suited to the skills and background of laid off manufacturing workers
Thus, we find that reemployment of laid-off workers is a significant problem
What difference does this make to the u.s. worker?
40 years ago, a worker could support his family, a dual-employed family has become the norm, and a necessity

53. MULTINATIONAL CORPORATIONS
Downsizing – process by which companies reduce their workforces
Contingent Employment – hiring of part-time, short-term workers
Why is it taking place on such a large scale?
Top management believe that their companies employ a surplus of people e and that, thanks to technology, work can be done by fewer employees
Also point to the fact that lower profits are caused by increasing foreign competition
Contingent employment is a cost-saving device
They cost less, and they are not entitled to costly benefits like vacation time, health insurance, retirement, etc.

54. MULTINATIONAL CORPORATIONS
According to Robert Reich (former secretary of the Department of Labor) downsizing and contingent employment will create great polarization between those who control capital and those who don’t
“Disposable workforce”
A survey confirmed employees attitudes toward their employers are changing
Employees express high job satisfaction, but their trust in management is eroding
Workers seem to be losing faith in management’s commitment to them
Workers don’t believe that company policies treat them fairly