1. Chapter 11 Economy and Politics

2. Economy is the social institution that organizes the production, distribution, and consumption of goods and services Politics is the social institution that guides a society’s decision making about Government is the formal organization that directs political life in society

3. Economic Systems Capitalism – economic system in which natural resources and the means of production are privately owned Socialism – economic system in which natural resources and means of production are collectively owned Mixed Systems –State capitalism –Welfare capitalism

4. Economy and Politics Political economy –Democracy – political system in which power is exercised by the people as a whole –Authoritarianism – political system that denies popular participation in government –Monarchy – political system in which a single family rules from generation to generation

5. Problems of the U.S. Political Economy Corporations Monopolies and Oligopolies Conglomerate – giant corporation composed of many smaller corporations Interlocking directorates – social networks made up of people who serve as directors of several corporations at the same time Special-interest groups Voter apathy

6. Theoretical Analysis Structural-Functional Analysis: Rule by the many –Pluralist model views power widely dispersed throughout U.S. society Social-Conflict Analysis: Rule by the few –Power-elite model – political system in which power is concentrated among a small elite group –Marxist political-economy model – concentration of wealth and power in society resulting from capitalism