Economics and Politics Chapter 12 Economics and Politics

The Economy The economy operates in a predictable manner Goods: Commodities ranging from necessities to luxury items Services: Activities that benefit others Economies of modern high-income nations are the result of centuries of social change © 2013 Pearson Education, Inc. All rights reserved.

Agricultural Revolution The earliest societies were hunters and gatherers with no distinct economy Economy as a distinct social institution: Agricultural technology Job specialization Permanent settlements Trade © 2013 Pearson Education, Inc. All rights reserved.

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 Raw materials into a wide range of products © 2013 Pearson Education, Inc. All rights reserved.

The Industrial Revolution Specialization Diverse division of labor and lower overall skill requirements Wage labor Working for strangers with intense supervision © 2013 Pearson Education, Inc. All rights reserved.

The Information Revolution and Postindustrial Society Postindustrial economy System of service work & high-technology Information revolution altered fundamental character of work in three ways: From tangible products to intangible ideas From mechanical skills to literacy skills From factories to almost anywhere © 2013 Pearson Education, Inc. All rights reserved.

The Size of Economic Sectors, by National Income Levels of Country © 2013 Pearson Education, Inc. All rights reserved.

Sectors of the Economy Primary sector Secondary sector Tertiary sector Generates raw materials from environment Secondary sector Transforms raw materials into manufactured goods Tertiary sector Generates services rather than goods © 2013 Pearson Education, Inc. All rights reserved.

The Global Economy Global economy–Expanding economic activity with little regard to national borders This activity has five major consequences: Global division of labor Products pass through many nations © 2013 Pearson Education, Inc. All rights reserved.

The Global Economy National governments no longer control the economic activity within their borders A small number of businesses now control a vast share of the world’s wealth Raises concerns about the rights and opportunities of workers © 2013 Pearson Education, Inc. All rights reserved.

Agricultural Employment in Global Perspective © 2013 Pearson Education, Inc. All rights reserved.

Service-Sector Employment in Global Perspective

Capitalism “Justice” in a capitalist system amounts to marketplace freedom Three distinct features: Private ownership of property Pursuit of personal profit Competition and consumer choice © 2013 Pearson Education, Inc. All rights reserved.

Socialism “Justice” in a socialist context is meeting everyone’s needs in roughly equal manner Three distinct features: Collective ownership of property Pursuit of collective goals Government control of the economy © 2013 Pearson Education, Inc. All rights reserved.

Alternative Systems Welfare capitalism State capitalism Economic & political system that combines Market-based economy & social welfare programs State capitalism An economic & political system; companies privately owned cooperate closely with govt © 2013 Pearson Education, Inc. All rights reserved.

Capitalism vs. Socialism Economic productivity GDP is $13,500 Economic equality More income disparity Personal freedom Emphasizes freedom to pursue personal self-interest © 2013 Pearson Education, Inc. All rights reserved.

Capitalism vs. Socialism Economic productivity GDP is $5,000 Economic equality Less income disparity Personal freedom Emphasizes freedom from basic want © 2013 Pearson Education, Inc. All rights reserved.

Work in the Postindustrial Economy The Changing Workplace In 1900, roughly 40 percent of U.S. workers were farmers In 2010, 1.7 percent were employed in agriculture © 2013 Pearson Education, Inc. All rights reserved.

The Changing Pattern of Work in the United States, 1900–2011 © 2013 Pearson Education, Inc. All rights reserved.

Work in the Postindustrial Economy Labor unions Organizations of workers that seek to improve wages & conditions through various strategies Decline of unions Shrinking industrial sector Service jobs are unlikely to be unionized © 2013 Pearson Education, Inc. All rights reserved.

Professions Theoretical knowledge Self-regulated practice Authority over clients Orientation to community rather than self-interest © 2013 Pearson Education, Inc. All rights reserved.

The Careers Most Commonly Named as Probable by First-Year College Students, 2010 © 2013 Pearson Education, Inc. All rights reserved.

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 © 2013 Pearson Education, Inc. All rights reserved.

Self-Employment, Unemployment, and Underemployment Underemployment: Lower salaries, fewer benefits, and reduced/no pensions Many workers agree to cuts in pay and/or benefits © 2013 Pearson Education, Inc. All rights reserved.

Official U.S. Unemployment Rates for Various Categories of Adults, 2011 © 2013 Pearson Education, Inc. All rights reserved.

The Underground Economy Most of us occasionally participate in the underground economy in small ways Much of the underground economy is due to criminal activity Largest segment: people who fail to report legally earned income on their tax returns © 2013 Pearson Education, Inc. All rights reserved.

The “Jobless Recovery” This time around, the recovery in jobs has not been as quick More companies have opened factories/offices abroad The U.S. economy is simply not growing fast enough © 2013 Pearson Education, Inc. All rights reserved.

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 © 2013 Pearson Education, Inc. All rights reserved.

Projected Increase in the Number of People in the U. S Projected Increase in the Number of People in the U.S. Labor Force, 2011–2018 © 2013 Pearson Education, Inc. All rights reserved.

Corporations Economic Concentration Conglomerates and Corporate Linkages Corporations: Are They Competitive? Corporations and the Global Economy © 2013 Pearson Education, Inc. All rights reserved.

Where the Jobs Will Be: Projections to 2020 © 2013 Pearson Education, Inc. All rights reserved.

Monarchy Constitutional monarchy Symbolic heads of state Political principles rule Elected official actually rules Examples: Great Britain, Spain, Denmark © 2013 Pearson Education, Inc. All rights reserved.

Monarchy Absolute monarchy Rulers claiming power based on divine right Examples: Saudi Arabia, Kuwait, Bahrain © 2013 Pearson Education, Inc. All rights reserved.

Democracy Representative democracy The US isn’t truly democratic Authority in hands of elected leaders, accountable to the people The US isn’t truly democratic Extensive use of unelected bureaucratic officials © 2013 Pearson Education, Inc. All rights reserved.

Democracy Political economy 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 © 2013 Pearson Education, Inc. All rights reserved.

Political Freedom in Global Perspective © 2013 Pearson Education, Inc. All rights reserved.

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 © 2013 Pearson Education, Inc. All rights reserved.

Other Political Systems 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 © 2013 Pearson Education, Inc. All rights reserved.

The Size of Government, 2012 © 2013 Pearson Education, Inc. All rights reserved.

The Rise of the Welfare State Individualism Welfare state–Government agencies and programs provide benefits to population One in seven US workers is a government employee The US welfare state is still smaller than those of many other high-income nations. © 2013 Pearson Education, Inc. All rights reserved.

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 © 2013 Pearson Education, Inc. All rights reserved.

Left-Right Political Identification of College Students, 1970–2006 © 2013 Pearson Education, Inc. All rights reserved.

Special-Interest Groups Strong in nations where political parties tend to be weak Employ lobbyists to work on their behalf © 2013 Pearson Education, Inc. All rights reserved.

Special-Interest Groups Political action committee (PAC) Organization formed by a special-interest group, independent of political parties, to raise And spend money in support of political goals © 2013 Pearson Education, Inc. All rights reserved.

The Presidential Election, 2008: Popular Vote by County © 2013 Pearson Education, Inc. All rights reserved.

Voter Apathy Americans are less likely to vote today than a century ago Half of registered voters participated in 2000 presidential election Participation rose to 63% in 2008 Women slightly more likely than men to vote © 2013 Pearson Education, Inc. All rights reserved.

Voter Apathy 65+ much more likely to vote than college-age Non-Hispanic whites more likely to vote than African Americans Hispanics least likely to vote (50% voting rate) People with a bigger stake in US society are more likely to vote © 2013 Pearson Education, Inc. All rights reserved.

Voter Apathy Conservatives: Apathy is political indifference Liberals: Apathy is alienation © 2013 Pearson Education, Inc. All rights reserved.

Theoretical Analysis of Power in Society Pluralist model 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 © 2013 Pearson Education, Inc. All rights reserved.

Theoretical Analysis of Power in Society Marxist political-economy model An analysis that explains politics in terms of the operation of a society’s economic system © 2013 Pearson Education, Inc. All rights reserved.

© 2013 Pearson Education, Inc. All rights reserved.

Political Revolution Political revolutions have common traits: Rising expectations Tend to happen when quality of life is improving Unresponsive government Government unwilling or unable to reform © 2013 Pearson Education, Inc. All rights reserved.

Political Revolution Radical leadership by intellectuals Thomas Hobbes: Intellectuals provide the justification for revolution. Establishing new legitimacy Guarding against the counterrevolution © 2013 Pearson Education, Inc. All rights reserved.

Terrorism Violence as legitimate political tactic; bypasses channels of negotiation Used by governments & individuals Democratic countries especially vulnerable because of broad civil liberties One person’s terrorist is another's freedom fighter © 2013 Pearson Education, Inc. All rights reserved.

Deaths of Americans in Eleven U.S. Wars © 2013 Pearson Education, Inc. All rights reserved.

War and Peace Wright’s five factors that promote war: Perceived threats Threats to people and territory Social problems Internal problems and frustration © 2013 Pearson Education, Inc. All rights reserved.

War and Peace Political objectives Moral objectives Show of force and protecting one’s own property Moral objectives Rallying people around morality Absence of alternatives Limited options © 2013 Pearson Education, Inc. All rights reserved.

War and Peace Social class and the military Is terrorism a new kind of war? Conventional warfare is symmetrical Terrorism is asymmetrical © 2013 Pearson Education, Inc. All rights reserved.

War and Peace Nuclear weapons The costs and causes of militarism Nuclear proliferation–Acquisition of nuclear weapons technology by more & more nations The costs and causes of militarism Military-industrial complex–Association of federal govt, military, & defense industry Regional conflict as reason for militarism © 2013 Pearson Education, Inc. All rights reserved.

War and Peace Mass media and war The power of the mass media to provide selective information to a worldwide audience Means television & other media are almost as important to the outcome of a conflict as the Military that is doing the actual fighting © 2013 Pearson Education, Inc. All rights reserved.

Pursuing Peace Deterrence High-technology defense Balance of power between societies High-technology defense Strategic defense initiative © 2013 Pearson Education, Inc. All rights reserved.

Pursuing Peace Diplomacy and disarmament Resolving underlying conflict Keep talking about reducing arms Resolving underlying conflict Increase spending on promoting peace rather than building up military © 2013 Pearson Education, Inc. All rights reserved.

Democracy and Islam © 2013 Pearson Education, Inc. All rights reserved.