The Economy and Work

The Economy The economy operates in a predictable manner. The social institution that organizes a society’s production, distribution, and consumption of goods and services The economy operates in a predictable manner. Goods: Commodities ranging from necessities to luxury items Services: Activities that benefit others The economies of modern high-income nations are the result of centuries of social change.

Agricultural Revolution The earliest societies were hunters and gatherers with no distinct economy. Four factors that made the economy a distinct social institution: Agricultural technology Job specialization Permanent settlements Trade

The Industrial Revolution New sources of energies Steam-fueled machine operation Centralization of work in factories Impersonal factories replaced cottage industries. Manufacturing and mass production Turning raw materials into a wide range of products

The Industrial Revolution Specialization Diverse division of labor and lower overall skill requirements Wage labor Working for strangers with intense supervision

The Information Revolution and Postindustrial Society Postindustrial economy–A productive system based on service work and high-technology The information revolution has altered the fundamental character of work in three ways: From tangible products to intangible ideas From mechanical skills to literacy skills From factories to almost anywhere

Figure 16.1 The Size of Economic Sectors by Income Level of Country

Sectors of the Economy Primary sector Secondary sector Tertiary sector Generates raw materials from the environment Secondary sector Transforms raw materials into manufactured goods Tertiary sector Generates services rather than goods

The Global Economy Global economy–Expanding economic activity with little regard to national borders This activity has four major consequences: Global division of labor Products pass through many nations National governments no longer control the economic activity within their borders. Few businesses control a vast share of the world’s wealth.

GLOBAL MAP 16.1 AGRICULTURAL EMPLOYMENT IN GLOBAL PERSPECTIVE

GLOBAL MAP 16.2 SERVICE-SECTOR EMPLOYMENT IN GLOBAL PERSPECTIVE

Capitalism An economic system in which natural resources and the means of producing goods and services are privately owned “Justice” in a capitalist system amounts to marketplace freedom. Three distinct features: Private ownership of property Pursuit of personal profit Competition and consumer choice

Socialism An economic system in which natural resources and the means of producing goods and services are collectively owned “Justice” in a socialist context means meeting everyone’s basic needs in a roughly equal manner. Three distinct features: Collective ownership of property Pursuit of collective goals Government control of the economy

Alternative Systems Communism–A hypothetical economic and political system in which all members of a society are socially equal Welfare capitalism–An economic and political system that combines a mostly market-based economy with extensive social welfare programs State capitalism–An economic and political system in which companies are privately owned but cooperate closely with the government

Capitalism vs. Socialism No system has yet been able to offer both political freedom and economic equality Economic productivity GDP is $13,500 Economic equality More income disparity Personal freedom Emphasizes freedom to pursue personal self-interest Economic productivity GDP is $5,000 Economic equality Less income disparity Personal freedom Emphasizes freedom from basic want

FIGURE 16.2 THE CHANGING PATTERN OF WORK IN THE UNITED STATES

Work in the Postindustrial Economy The dual labor market Primary labor market–Jobs that provide extensive benefits to workers Secondary labor market–Jobs that provide minimal benefits to workers Labor unions–Organizations of workers that seek to improve wages and working conditions through various strategies Decline of unions Shrinking industrial sector Service jobs are unlikely to be unionized.

Figure 16.3 The Careers Most Commonly Named as Probable by First-Year College Students, 2006

Professions Theoretical knowledge Self-regulated practice Prestigious white-collar occupations that require extensive formal education Theoretical knowledge Self-regulated practice Authority over clients Orientation to community rather than self-interest

Self-Employment, Unemployment, and Underemployment Self-employment–Earning a living without being on the payroll of a large organization Every society has some unemployment. Jobs disappear as: occupations become obsolete. businesses change the way they do business. companies downsize or close.

Self-Employment, Unemployment, and Underemployment Underemployment: Lower salaries, fewer benefits, and reduced/no pensions Many workers agree to cuts in pay and/or benefits.

Figure 16.4 Official U.S. Unemployment Rates for Various Categories of Adults, 2006

The Underground Economy Economic activity involving income not reported to the government as required by law Most of us occasionally participate in the underground economy in small ways. Much of the underground economy is due to criminal activity. The largest segment is people who fail to report legally earned income on their tax returns.

Race and Gender in the Workplace In the past, white men have been the mainstay of the US labor force. In the future, more workers will be women and minorities. The workplace must develop programs and policies that meet the needs of a socially diverse workforce and encourage everyone to work together effectively and respectfully.

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

Corporations A few large corporations dominate the US economy. 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. Oligopoly, the domination of a market by a few producers, is legal and common.

Politics and Government

The ability to achieve desired ends despite resistance from others Power The ability to achieve desired ends despite resistance from others Government–A formal organization that directs the political life of a society Governments demand compliance from the population. Weber: Most governments don’t openly threaten their people. Every government tries to make itself seem legitimate.

Power that people perceive as legitimate rather than coercive. Authority Power that people perceive as legitimate rather than coercive. Traditional–Power legitimized through respect for long established cultural patterns Rational-legal–Power legitimized by legally enacted rules and regulations

Power that people perceive as legitimate rather than coercive. Authority Power that people perceive as legitimate rather than coercive. Charismatic–Power legitimized through extraordinary personal abilities that inspire devotion and obedience Routinization of charisma–The transformation of charismatic authority into some combination of traditional and bureaucratic authority

Monarchy Absolute monarchy Constitutional monarchy A political system in which a single family rules from generation to generation Absolute monarchy Rulers claiming power based on divine right Modern examples: Saudi Arabia, Kuwait, Bahrain Constitutional monarchy Symbolic heads of state Political principles rule Elected official actually rules Modern examples: Great Britain, Spain, Denmark

A political system that gives power to the people as a whole Democracy A political system that gives power to the people as a whole Representative democracy–Authority in hands of elected leaders, accountable to the people The US isn’t truly democratic . Extensive use of unelected bureaucratic officials Wealthy have more political clout than the impoverished. Political economy The interplay of politics and economics Capitalist societies claim freedom while socialist societies claim security.

GLOBAL MAP 17.1 POLITICAL FREEDOM IN GLOBAL PERSPECTIVE

Other Political Systems Authoritarianism–A political system that denies popular participation in government Authoritarian government is indifferent to people’s needs. Examples: Saudi Arabia, Bahrain, Ethiopia Totalitarianism–A highly centralized political system that extensively regulates people’s lives Seeks to bend people to the will of the government Vietnam, North Korea

Figure 17.1 The Size of Government, 2005

The Rise of the Welfare State Individualism Welfare state–Government agencies and programs that provide benefits to the population One in six US workers is a government employee. The US welfare state is still smaller than those of many other high-income nations.

The Political Spectrum Ranges from extremely liberal on the left to extremely conservative on the right Economic issues Social issues Class, race, and gender Party identification

Special-Interest Groups People organized to address some economic or social issue Special-interest groups Strong in nations where political parties tend to be weak Employ lobbyists to work on their behalf Political action committee (PAC)–An organization formed by a special-interest group, independent of political parties, to raise and spend money in support of political goals

Voter Apathy Americans are less likely to vote today than a century ago. Only half of all registered voters participated in the 2000 presidential election. Participation rose to 60% in 2004. Women slightly more likely than men to vote Over 65 much more likely to vote than college-age Non-Hispanic whites more likely to vote than African Americans Hispanics least likely to vote People with a bigger stake in US society are more likely to vote

Voter Apathy Conservatives: Apathy is political indifference. Liberals: Apathy is alienation.

Theoretical Analysis of Power in Society Pluralist model–An analysis of politics that sees power as spread among many competing interest groups Power-elite model–An analysis of politics that sees power as concentrated among the rich Marxist political-economy model–An analysis that explains politics in terms of the operation of a society’s economic system

Applying Theory Politics

The overthrow of one political system in order to establish another Political Revolution The overthrow of one political system in order to establish another Political revolutions have common traits: Rising expectations Tend to happen when quality of life is improving Unresponsive government Government unwilling or unable to reform Radical leadership by intellectuals Thomas Hobbes: Intellectuals provide the justification for revolution. Establishing new legitimacy Guarding against the counterrevolution

Terrorism Characteristics: Acts of violence or the threat of violence used as a political strategy by an individual or a group Characteristics: Define violence as a legitimate political tactic; bypasses established channels of negotiation Used by governments as well as individuals Democratic countries are especially vulnerable to terrorism because of broad civil liberties. One person’s terrorist is another's freedom fighter.

War and Peace Wright’s five factors that promote war: Perceived threats Threats to people and territory Social problems Internal problems and frustration Political objectives Show of force and protecting one’s own property Moral objectives Rallying people around morality Absence of alternatives Limited options

War and Peace Social class and the military "America's military seems to resemble the makeup of a two-year commuter or trade school outside Birmingham or Biloxi far more than that of a ghetto or barrio or four-year university in Boston." Is terrorism a new kind of war? Conventional warfare is symmetrical. Terrorism is asymmetrical.

War and Peace The costs and causes of militarism Nuclear weapons Military-industrial complex–The close association of the federal government, the military, and the defense industry Regional conflict as a reason for continuing militarism Nuclear weapons Nuclear proliferation–The acquisition of nuclear weapons technology by more and more nations

War and Peace Mass media and war The power of the mass media to provide selective information to a worldwide audience means that television and other media are almost as important to the outcome of a conflict as the military that is doing the actual fighting.

Pursuing Peace Deterrence High-technology defense Balance of power between societies High-technology defense Strategic defense initiative Diplomacy and disarmament Keep talking about reducing arms Resolving underlying conflict Increase spending on promoting peace rather than building up military