The Economy, Work, and Politics Ch. 11 The Economy, Work, and Politics

The Transformation of Economic Systems Economy (Market): The mechanism by which values are established in order to exchange goods and services The system of distribution of goods and services Essential to our welfare Radically different today than in the past An economy deals not only with money but also with the production, distribution, and consumption of goods and services within a society. This is a major link between individuals (micro) and society (macro).

The Transformation of Economic Systems (Historically) In the US, the economy has changed over time. New technologies have changed the nature of our work. Preindustrial Societies: Birth of Inequality Hunting and Gathering Societies High degree of social equality Pastoral and Horticultural Societies Surplus; trade between groups Agricultural Societies The invention of the plow; specialized division of labor Increasing Social and Economic Inequalities

The Transformation of Economic Systems Industrial Societies: Birth of the Machine Brought Previously Unseen Surpluses Conspicuous Consumption Factories Exploited Labor More Efficient Machines Led to Conspicuous Consumption Postindustrial Societies/Information Revolution: Birth of Information Age Service Sector Vast Surplus of Goods Extensive Trade among Nations Wider Variety and Quantity of Goods Information Explosion Global Village

World Economic Systems - Capitalism Capitalism: Three components Private Ownership of Means of Production Free Market Competition Pursuit of Profit Laissez-Faire Capitalism – Government is not involved in decision making Welfare or State Capitalism – Individuals have certain rights but are overseen by the government – this is the U.S. economy

World Economic Systems - Socialism Socialism - Three components: Public/Collective Ownership of Means of Production Central Planning – collective distribution and decision making of goods and services Distribution of Goods without Profit Motive – government regulates market Needs Decided by Central Committee Designed to Eliminate Competition Everyone Works for the Government

The Convergence of Capitalism and Socialism Criticism of Capitalism: leads to social inequality Criticism of Socialism: not respecting individual rights All nations’ economies have both capitalist and socialist aspects. Both capitalist and socialist systems have adopted features from the other The convergence theory refers to the growing similarities shared by capitalism and socialism i.e. Western banks in China, unemployment compensation in the U.S.

New Information Technology and Work Computers are de-skilling labor (McDonaldization). Computers are making work more abstract. Computers limit workplace interaction. Computers increase employers' control of workers. Computers allow companies to relocate work.

On the Nature of Work Karl Marx argued that when people lose control over their production and the conditions of production, they become alienated and view work as a means to survive rather than a rewarding activity. 9

Karl Marx: Alienation Marx believed workers were alienated in four ways: From the product of their labor - First, the products of the worker’s labor are the property of the capitalists to do with as they see fit. From their own productive activity - Second, workers in a capitalist society are alienated from the process of work, their own productive activity. From their fellow workers - Third, the worker is alienated from other people, “the alienation of man from man,” as Marx calls it. Capitalism forces individuals into competition with each other. From human nature - Fourth, workers are alienated from human nature, what Marx tends to refer to as “human essence.” He believes that work should not be an unhappy burden taken up only out of the need to preserve physical existence. Instead, he assumes that it is in our nature to seek out “work, vital activity, and productive life” (Marx 2001, p. 90). The essence of what it means to be human is to engage in free, conscious activity, but capitalism degrades human labor to a mere means of survival. First, the products of the worker’s labor are the property of the capitalists to do with as they see fit. Second, workers in a capitalist society are alienated from the process of work, their own productive activity. Third, the worker is alienated from other people, “the alienation of man from man,” as Marx calls it. Capitalism forces individuals into competition with each other. Fourth, workers are alienated from human nature, what Marx tends to refer to as “human essence.” He believes that work should not be an unhappy burden taken up only out of the need to preserve physical existence. Instead, he assumes that it is in our nature to seek out “work, vital activity, and productive life” (Marx 2001, p. 90). The essence of what it means to be human is to engage in free, conscious activity, but capitalism degrades human labor to a mere means of survival.

Globalization Always been around Process Globalization refers to the cultural and economic changes resulting from dramatically increased international trade and exchange in the late twentieth and early twenty-first centuries; Always been around Process Increased movement of food, ideas, culture, politics, interconnectedness Technology is key Political – global one idea system

The Globalization of Capitalism Globalization of Capitalism – may be the most significant change to happen within the last 100 years Stagnant Paychecks: the productivity of U.S. workers has increased year after year, yet inflation and cost of living has affected the value of a paycheck New Economic System and Old Divisions of Wealth: U.S. worker face high insecurities in the workplace with layoffs and plant closings. Many are affected by outsourcing. The wealthy are not really affected by the past recession.

The Globalization of Capitalism The Global Superclass: this term refers to the leaders of the globe’s top multinational companies This class is very powerful and wealthy They have access to the top circle of political power around the globe

Corporations Transnational corporations are another part of the global economy that transcend national borders so their products can be manufactured, distributed, marketed, and sold from bases all over the world. Organizations with a legal existence, including rights and liabilities, apart from those of its members A few large corporations dominate the US economy. Economic concentration has created the conglomerate, a giant corporation comprising many smaller corporations. Federal law forbids monopoly, the domination of a market by a single producer.

Globalization, Economics, and Work Companies’ searches for the cheapest way to produce goods often involves outsourcing or the use of a sweatshop. Outsourcing: “contracting out” or transferring to another country the labor that a company might otherwise have employed its own staff to perform) Sweatshop: a workplace where workers are subject to below- standard wages, long hours, and poor working conditions This reflects what we discussed earlier about the pursuit of profit. 15

Politics Democracy and Human Rights: Having our Say

Political Power in American Society: The Vote Regular and Fair Elections? Voting is: an important source of power for citizens it enables people to remove incompetent, corrupt, or insensitive officials from office To influence issues at the local, state, and national levels. In current U.S. practice, voting has severe limitations as a means of exercising power. the range of candidates from which to choose is restricted the high cost of political campaigns reinforces the limited choice of political candidates the exercise of power by those at the top of the American political structure

Lobbyists and Special Interests Special Interest Groups: People Who Think Alike on a Particular Issue and Mobilize for Political Action Lobbyists: People Paid to Influence Legislation who work for Special Interest groups Often times, lobbyists are people who are retired from the government The main criticism of Special Interest groups and Lobbyists are that they buy votes

Who Rules the United States? The Functionalist Perspective: Pluralism The Conflict Perspective: The Power Elite Which View is Right?

Functionalist Perspective Functionalist Perspective: Pluralism (Diffusion Among Many) The functionalist perspective believes that the U.S. is ruled by many different groups There is a check and balance between the main branches of the government: Legislative, Judicial, and Executive

Conflict Perspective Conflict Perspective: The Power Elite/Ruling Class -Elites rule the government (Mills and Dumhoff)

Democracy and Its Alternatives Democracy - a political system in which all citizens have the right to participate. Rule by the people Why is Democracy Important? Many social scientists believe that it is a mechanism that convinces us that we have some sort of power when we actually don’t.

Is Democracy Universal? Stiglitz makes the argument that everyone in the world accepts democracy at some level. Institutions aren’t universal but the idea of having power over your own life is universal. There is a more general notion that people should have some input in their lives—this has been around since way past modern societies— African and Native American tribes. Democracy isn’t tied to a state—having the ability or right to have a say in these processes is accepted (perhaps not by those in power).  

This idea of Democracy… …according to Joseph Stiglitz (Economist) is that it’s being reconfigured and it’s changing. Stiglitz’s concepts: -Democratic Deficit—gap between informal/intrinsic and substantive rights.

Intrinsic rights: basic rights, freedom of speech—values important to people -instrumental mechanism in that if there were certain problems in society then democracy as a process allows for that info to pass and be disseminated —allows us to call out and hold governments somewhat responsible/accountable. Substantive rights: crucial issue—what happens in practice—US doesn’t do very well. -Example: The average life of a Black male in Harlem is less than a Bangladeshi -ability to exercise those rights? -What happens in cases where your social/intrinsic rights are being violated? Then it affects your ability to participate in general, your community, vote, etc.

Democratic Paradox: (Stiglitz’s concept) Democracy spreading around the world, other countries/societies are embracing it (Arab Spring); but those who have it don’t want it. This has to do with the way politics are being reconfigured. Example: we still vote but it doesn’t function—people are losing interest in the idea of democracy.

So, Democracy today has to do with the working definition of Democracy. This includes: Regular and fair elections—all members Effective competition Civil Liberties—political and civil rights—having right to vote, right to run for office, etc. But in order for democracy to function well, it requires it’s 3 legs to be balanced. These are: 3) Civil society—the 3rd sector; lies between other 2 sectors 2) Government—fair elections; non-corrupt, etc. 1) Market—*what is happening in terms of the democratic deficit is that the market is becoming more powerful and out of balance than the other two legs

How is globalization affecting democracy? Issues mentioned above are being affected. Becoming larger than nation state Issues of power—who is accountable?