Economics and Politics Chapter 12 Economics and Politics
Economy Social institution that organizes a society’s production, distribution, and consumption of goods and services. Social institution – an organized sphere of social life designated to meet human needs.
Revolutions Agricultural Revolution Industrial Revolution New agricultural technology Productive specialization Permanent settlements Trade Industrial Revolution Centralization of work in factories Manufacturing and mass production Specialization Wage labor
Postindustrial Economy Productive system based on service work and extensive use of information technology. From tangible products to ideas From mechanical skills to literacy skills From factories to almost anywhere
Sectors of the Economy Primary – the part of the economy that draws raw materials from the natural environment Secondary – part of the economy that transforms raw materials into manufactured goods Tertiary – part of the economy that involves services rather than goods
Global economy Expanding global activity with little regard for national borders Global division of labor Products through many nations Governments can no longer fully control inside borders Small number of businesses control vast share of the world’s economic activities
Capitalism Economic system in which natural resources and the means of producing goods and services are privately owned. Private ownership of property Pursuit of personal profit Competition and consumer choice
Socialism Economic system in which natural resources and the means of producing are collectively owned Usually seen as a step between capitalism and communism Collective ownership of property Pursuit of collective goals Government control of the economy
Communism Economic system under which all property is communally owned and no social distinction are made on the basis of people’s ability to produce
Hybrid Systems 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 although they cooperate closely with the government
Corporations An organization with a legal existence, including rights and liabilities, apart from those of their members. Concentrated Linked Not highly competitive Monopoly – illegal domination of a market by a single produce Oligopoly – domination of a market by a few producers
Politics Social institution that distributes power, sets a society’s agenda, and makes decisions. Power – ability to achieve desired ends despite resistance from others
3 basic sources of power Force – actual or threatened use of coercion to impose one’s will on others Influence – exercise of power through process of persuasion Authority – power that has been institutionalized and is recognized by the people over whom it is exercised
Weber’s authority classification Traditional – power legitimized by respect for long-established cultural patterns Rational-Legal – power legitimized by legally enacted rules and regulations Charismatic – power legitimized through extraordinary personal abilities that inspire devotion and obedience
Global Political Systems Monarchy – power is transferred from generation to generation in a single family Democracy – power is exercised by the people as a whole Authoritarianism – denies popular participation in government Totalitarianism – extensively regulates people’s lives
Theoretical Analysis Pluralist model – sees power as dispersed among many competing interest groups Power-elite – sees power as concentrated among the rich Marxist political-economy – explains politics in terms of the operation of a society’s economic system
Political Revolution Overthrow of one political system in order to establish another Rising expectations Unresponsive government Radical leadership by intellectuals Establishing a new legitimacy
Terrorism Random acts of violence or threat used by an individual or group as a political strategy
War Armed conflict among people of various societies, directed by their governments