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

2. 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).

3. 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

4. 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

5. 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

6. 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

7. 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.

8. 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.

9. 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

10. 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.

11. 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

12. 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.

13. 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

14. 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.

15. 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

16. Politics Democracy and Human Rights: Having our Say

17. 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

18. 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

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

21. 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

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

23. 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.

24. 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).

25. 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.

26. 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.

27. 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.

28. 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

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