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2. Unit V Influencing the American Political System Key Understandings: 1.Political Activity is Economic Activity. 2.There is a political invisible hand 3.Competition in politics is similar and different to that of competition in the economy. 4.Politics is the act of influencing government decisions to allocate public resources. 5.People acting in the political marketplace have some concern for others, their main motive, whether they are voters, politicians, lobbyists, or bureaucrats, is self-interest. 2

3. Key Terms: Politics- The act and theory of influencing public decisions and politics. Political Parties- Political Parties are formed by people who share similar ideas. The goals of the party are to influence and control government decisions by getting their representatives elected into public office. Political Spectrum- A system of classifying different political positions upon one or more geometric axes that symbolize independent political dimensions. Conservative- A political philosophy that promotes tradition values and institutions. Liberal- A political philosophy that promotes social justice and that the legitimate role of the state includes addressing issues such as unemployment, health care, education, and the expansion of civil rights. Statist/Populist- the belief that a government should control either economic or social policy, or both, to some degree Libertarian- political philosophies that uphold liberty as the highest political end. This includes emphasis on the primacy of individual liberty, political freedom, and voluntary association. 3

4. Key Terms: Median Voter Theorem- theory that if there are only two politicians, then a politician maximizes their number of votes by committing to the policy position preferred by the median voter. Special Interest Groups- Use various forms of advocacy to influence public opinion and/or policy. Groups vary considerably in size, influence, and motive; some have wide ranging long term social purposes, others are focused and are a response to an immediate issue or concern. Lobbying- Any action that places pressure on legislatures and influences the legislative process. Political Action Committees- A political organization created to raise and spend money in order to get candidates elected or defeated. Public Choice Theory- The use of economic tools to deal with traditional problems of political science. Primary- Election- Is an election that narrows the field of candidates before an election for office. Primary elections are one means by which a political party nominates candidates for an upcoming general election. Closed Primary- Only registered party members can vote in the primary election. Open Primary- All registered voters regardless of party may vote in the primary election. 4

5. Key Terms: Party Platform- Is a list of positions and proposed actions that a party take on contemporary issues. Plank- An individual issue on the party platform. Propaganda- Techniques of persuasion aimed at influence individual or group thoughts. 5

6. Key People/Groups: 6 Republican Party- One of two main political parties in the United States. The platform of the Republican party is based on conservative ideas. Democratic Party- One of two main political parties in the United States. The platform of the Democratic Party is based on liberal ideas.

7. Important Documents and outside readings: The Public Choice School: Politics as a Business Politics and the English Language Websites: Republic Party website Democratic Party website Opensecrets.org http://ontheissues.org 7

8. 8 Politics can be defined as the act of influencing government and public decisions. For our purposes we will also apply economic thought to the political process and the political market. By taking this approach we will gain a better understanding of why public decisions are made and the impacts of those decisions. Often when people think about politics they immediately think about political parties, however in this class we will focus on 4 main actors in the political process. Those actors include voters, special interest groups, politicians, and bureaucrats and together they make up the political market. Political activity is economic activity, the concepts of self-interest, utility maximization, mutual exchange, the invisible hand, and trade-offs that apply to the free market also apply to the political market. Economics focuses on individual private choices, while politics focuses on collective public choices. We have parallel systems that people use to achieve their goals. People try to get want they want through markets or they try to get want they want through politics. Both can be effective but both exert different types of costs. As noted in unit 3, one of the key components of markets is entrepreneurship. Private entrepreneurs recognize opportunities to satisfy consumers' wants by promoting new or better ideas, products and services. There are also political entrepreneurs who promote promises (ideas, ideology, services, and policies) to satisfy voters.

9. 9 Voters and consumers are rational actors, they are the same people. The person waiting in line to vote is the same person waiting in line to buy food at Wawa. Voters and consumers are self- interested people looking to improve their lives. However, the incentives in private decisions are different than public decisions. Consumers vote with their money and have different amounts to spend per product. Consumers make decisions based on perceived value, perceived cost, and perceived benefits. If they really like something they can spend more money on it. Stores want to continuous satisfy the people’s wants to receive continued business. And if a consumer pays for the product they get the product. In politics voters get one vote per election and voters get want they voted for only if 50% of the other voters agree with them. Consumers compare prices to income and only buy those products that they can afford. Voters on the other hand often vote for politicians that make promises that we all have to pay for. As Fredich Bastiat would say, we see the benefits but the unseen cost are just as important. Consumers are very aware of the cost and benefits of their private decisions, in terms of public decisions we often see the benefits but don’t see the cost. Another difference between consumers and voters is the number of options that each has when making a decision. Go to the food store and count the different brands of any product. Each brand promises something different. For example, if a consumer wants bread what are his or her options? The consumer considers tastes, white, wheat, rye, etc. They consider health concerns white or gluten free? And of course they look at the price, high end or store brand?

10. 10 But in politics voters are often left with only two and sometimes three choices. On top of that it would be impossible for a candidate to satisfy every desire of each unique voter. As a result the general electorate has a choice between similar yet differentiated political parties. The two main political parties in this nation are the Republicans and Democrats and as we will find out later in this unit, if a candidate hopes to win an election he or she must conform to the positions of each party. Political scientists use political spectrums to show how different political ideologies relate to each other. Diagram a depicts the traditional political spectrum. Diagram a. People who have more liberal ideas generally fall to the left on he spectrum. The term liberal refers to apolitical philosophy that promotes social justice and that the legitimate role of the state includes addressing issues such as unemployment, health care, education, and the expansion of civil rights.

11. 11 People with more conservative views fall to the right of moderate. The term conservative a political philosophy that promotes tradition values and institutions. Political Parties are formed by people who share similar ideas. The goals of the party are to influence and control government decisions by getting their representatives elected into public office. Democrats in general favor liberal ideas while Republicans favor conservative ideas. Although they have different views, in the United States, liberals and conservatives are generally more moderate as compared to some of the more extreme philosophies identified in diagram a. What are liberal and conservative views on some of today’s important issues? List Show photo previous classes Generally liberal – economic control, social freedom, conservative economic freedom, social control Another spectrum Libertarian/statist Picture Dispersed interest

12. 12 Politics as economy activity Political spectrum On the issues A different spectrum Previous class results Why is the center under represented? Political parties and closed primaries Answer the question - deep pockets try to broaden base Interest group/lobbyist/pacs Capture theory Political invisible hand Answer the question- fringe organized not worth cost of fighting Money and elections Answer question Individual donations smaller than pacs Individuals cannot be organized - too diverse collective groups vs. concentrated benefits Campaign finance reform- capture - lowering the supply per donator not the demand per candidate Answer the question Voter's Rational ignorance - no real research on issues and candidates

13. 13 Create propaganda techniques that appeal to voters emotion an not logical or their rational thoughts Voters are not irrational they are often rationally ignorant Kissing babies - propaganda techniques Campaigns of slogans not policy Tv ads propaganda Money Answer question Election year event Median voter theorem and closed primary - answer question Electoral college - 270 2 party system - answer question 3rd party candidate and median voter therein - answer question Public choice theory foundations and questions Economics deals with how private individuals allocate scarce resources by making private decisions, politics deals with how publicly elected individuals allocate public resources by making public decisions Scarcity in markets and scarcity in government- similarities and differences Businesses have real budgets Governments do not have set budgets Bureaucrats love big budgets - don't be too efficient or the budget will get got More rules and regulations mean more work and control and an expansion of the agency When budgets need to be cut- make it sting Benedict Arnold statues of children's cancer drugs? The choice is easy Comparing private self interest with political self interest, the invisible hand of the market vs. the invisible hand of politics Political self-interest- they are the same human species as those who are not in politics

14. 14 If government were angels quote Federalist #10 Invisible hand if politics- opposite of the invisible hand in the market Economics deals with how private choices are made in a market Public choice deals with how public choices are made in government - all together different Comparing voters and consumers Free exchanges are they mutually beneficial in the public sector People but things because they think their lives will be improved, people vote for candidates for the same reasons People vote with their money in the market and they vote with a ballot in politics - they get one vote but can also help fund Voter's Rational ignorance - no real research on issues and candidates It's rational because voters no that the cost of knowledge is greater than the benefit of the single vote When you yell at the tv- same as voting Create propaganda techniques that appeal to voters emotion an not logical or their rational thoughts Voters are not irrational they are often rationally ignorant Kissing babies - propaganda techniques Campaigns of slogans not policy Tv ads propaganda Politics and the English language Money Interest groups - their marginal private cost is larger but their marginal private benefit is much larger than their portion of the shared social cost Rational ignorance Utility maximization in economics and utility maximization in politics

15. 15 As Adam Smith wrote, in the economic market people who only intend to serve their self-interest are driven by an invisible hand to serve the public interest, which was no part of their original intention. Milton Friedman also explains that just like the economic market, there is an invisible hand in politics but it works in the opposite direction. “In the government sphere, as in the market, there seems to be an invisible hand, but it operates in precisely the opposite direction from Adam Smith’s: an individual who intends only to serve the public interest by fostering government intervention is ‘led by an invisible hand to promote’ private interests, which was no part of his intention.” Friedman explains why this happens, “As we have seen in case after case, the general interest is defused over millions of people, the special interest is concentrated.” If I decide to put this in unit 5 Remove from unit 3 page 238