Focus Writing #11 – 5/21 Based on your knowledge of U.S. history and your years of experience: Who decides how wealth is divided up in this country? Is it political leaders or business leaders? Explain your answer. Please turn in your homework on Irish Potato Famine
U.S. Household Income What happened between 1975 and 2003?
Learning Targets Explain the relationship between government and economic systems Test on Monday
Learning Targets Explain the relationship between government and economic systems Monday – Current events Tuesday – Test review Wednesday – Economics Test
Three Models of Political Power Define/describe the following systems of government – leave room Feudalism/Authoritarianism Oligarchy Democracy
Feudalism/Authoritarian Power is held by individual or small group (with military backing) Rules based on decisions of feudal lord, not laws Government is not limited Rights (including property) are not guaranteed No competition for power (within system)
Oligarchy Small group has power Usually based on some common characteristic (wealthy, military, educated, religious) Usually follows rule of law Little competition for power
Democracy Large group has power (all citizens) Follows rule of law Rights are guaranteed by law Competition for power
Think/Pair/Share 1.Which political system would be best at providing for the needs of its citizens? 2.Which political system would be best at responding to a crisis? Consider Irish Potato Famine or Hurricane Katrina.
Three Models of Economic Power 1.Communism Government owns/controls the means of production (land, capital, AND labor) Goal is equality Economic decisions are made by govt. Limited economic growth through planning
2. Capitalism Private individuals own the means of production (land, capital, and labor) Goal is creating wealth Economic decisions are made by markets Rapid economic growth through trade and specialization
3. Feudalism Feudal lord controls the means of production (land and labor) Note: there is almost no capital Goal is stability Economic decisions are made by feudal lord There is almost no trade and almost no economic growth
Think/Pair/Share 1.Which economic system would be best at providing for the needs of its citizens? 2.Which economic system would be best at responding to a crisis? Consider Irish Potato Famine or Hurricane Katrina.
GDP/Capita – What a country produces/person YEAR World$425$420$545$675$5,188 The West$439$406$624$1,149$19,990 West Europe ,26917,456 North America400 1,23322,933 Japan ,720 The Rest$423$424$532$594$2,971 Other Europe ,147 Latin America ,031 China ,653 Other Asia ,768 Africa400 1,221
- Country A Township A Country B Township B Country C Township C Three models: property ownership as a proxy for power, c © Bruce Scott, Capitalism, Democracy, and Development manuscript, 2006.
U.S. Economic History U.S. economic history Founding – Civil War: democracy and capitalism – New England and N.W. Ordinance – Model A – Railroads, trusts and concentration of wealth – Model B Great Depression – 1970 – relative equality – Model A 1970-present – movement back towards concentration of wealth – Model B
Conclusion Democracy and Capitalism conflict Democracy requires relative equality Capitalism moves society away from equality U.S. = mixed economy: between Capitalism and Communism U.S. = mixed political system: between Democracy and Oligarchy
Exit Question 1.What problems does increasing income inequality in the United States pose (create) for our democratic system?