1. Copyright © Allyn and Bacon 2007 Chapter 13 The Economy In Conflict and Order: Understanding Society, 11 th edition This multimedia product and its contents are protected under copyright law. The following are prohibited by law: any public performance or display, including transmission of any image over a network; preparation of any derivative work, including the extraction, in whole or in part, of any images; any rental, lease, or lending of the program.

2. Copyright © Allyn and Bacon 2007 Capitalism and Socialism Capitalism in its pure form involves: –The private ownership of the means of production –Pursuit of personal profit –Competition –A government policy of allowing the marketplace to function unhindered

3. Copyright © Allyn and Bacon 2007 Capitalism and Socialism Socialism its pure form involves: –Democracy throughout the social structure –Equality-equality of opportunity, equality rather than hierarchy in making decisions, and equality in sharing benefits to society –Efficiency in providing the best conditions to meet the material needs of the citizens

4. Copyright © Allyn and Bacon 2007 The Corporation-Dominated Economy Monopolistic Capitalism –Negative consequences of the trend toward megamergers It increases the centralization of capital It increases the power of huge corporations over workers The benefits to local communities are diminished It reduces the number of jobs It increases corporate debt It is nonproductive

5. Copyright © Allyn and Bacon 2007 The Corporation-Dominated Economy Interlocking directorates –The linkage between corporations that results when an individual serves on the board of 2 companies or when 2 companies each have a director on the board of a third company Transnational Corporations –The power of the largest corporations in the U.S. is increased by their international activities.

6. Copyright © Allyn and Bacon 2007 Capitalism and Inequality Concentration of Corporate Wealth –In the business community wealth is centralized in a relatively few corporations, and this concentration is increasing. Concentration of Private Wealth and Income –Wealth is also concentrated among individuals and families. Concentration of Want and Misery –The poor are concentrated among certain social categories, especially people of color and families headed by women.

7. Copyright © Allyn and Bacon 2007 Work in U.S. Society Owners and managers of firms and factories control workers in several ways –Through scientific management –Through bureaucracy –Through extortion –By monitoring worker behavior

8. Copyright © Allyn and Bacon 2007 Work in U.S. Society Alienation –The separation of human beings from each other, from themselves, and from the products they create Dangerous Working Conditions –A sweatshop is a substandard work environment where workers are paid less than the minimum wage, workers are not paid overtime premiums and other labor laws are violated.

9. Copyright © Allyn and Bacon 2007 Work in U.S. Society Labor unions have declined in numbers and power. This has resulted in lower real wages and benefits, less-safe conditions, and a declining middle class.

10. Copyright © Allyn and Bacon 2007 Discrimination in the Workplace Women and minorities have long been the objects of discrimination in U.S. industry. Two features of the U.S. economy promote these inequities: a segmented labor market and capitalist patriarchy.

11. Copyright © Allyn and Bacon 2007 Discrimination in the Workplace Segmented Labor Market (or the dual labor market) –The primary sector is compose of large, bureaucratic organizations with relatively stable production and sales. –The secondary sector is composed of marginal firms in which product demand is unstable. Male Dominance at Work –Men tend to make the rules and enforce them and men receive unequal (i.e. greater) rewards.

12. Copyright © Allyn and Bacon 2007 Discrimination in the Workplace Unemployment –The official government data on unemployment hid the actual amount by undercounting the unemployed. People not actively seeking work (discouraged workers) are not counted People who work at part-time jobs are counted as fully employed –Unemployment has positive consequences for some people.

13. Copyright © Allyn and Bacon 2007 Figure 13.1 – Female-to-Male Earnings Ratio and Median Earnings of Full-Time, Year-Round Workers 15 Years Old and Over by sex: 1960 to 2003 Source: U.S. Census Bureau. “Income, Poverty, and Health Insurance Coverage in the United States,” Current Population Reports, Series P60-226 (August 2004), p.6.

14. Copyright © Allyn and Bacon 2007 Capitalism in Crisis U.S. capitalism is facing four crises: –The primacy of profit over human considerations –The propensity of corporate managers to increase profitability by reducing the workforce and lowering wages –Corporate scandals that illuminate the greed and cronyism at the heart of laissez-faire capitalism –The lack of central planning to solve current problems and anticipate future ones

15. Copyright © Allyn and Bacon 2007 Capitalism in Crisis Two facts about institutions of society –Although they are interrelated, the economy is the most dominant and shapes each of the other institutions. –The particular way that an institution is organized is at once a source of stability and a source of problems.