1. Political and Economic Institutions
Chapter 13

2. Chapter Outline Power and Authority The Nation-State
Global Political Systems
Political Terrorism
Political Power in American Society
Global Economic Systems
The Corporation
Work in the Contemporary American Economy

3. Power and Authority
Economic issues exist due to the need to produce goods and services.
Economy – institution for carrying out the production and distribution of goods and services.
Every society needs to develop some means of handling conflicts that occur because economic decisions affect organizations and the general pubic.
Political institution – institution through which power is obtained and exercised.

4. Power and Authority
Power is the ability to impose one’s will on others whether or not they wish to comply.
Coercion is power through force.
Authority is power accepted as legitimate by those subjected to it.

5. Three Forms of Authority
Charismatic – arises from a leader’s personal characteristics; magnetic personalities or the feelings of trust they inspire (e.g. Nelson Mandela).
Traditional authority – authority in which the legitimacy of a leader is rooted in custom
Rational-legal – power of government officials is based on their efforts; power is part of a position (e.g., president of the U.S.).

6. Nation-state: Characteristics
Nation-state is always the political authority over a specified territory;
has absolute sovereignty it has over its citizens;
and has devotion to nationalism
a people’s commitment to a common destiny based on a recognition of a common past and a vision of a shared future.

7. State vs. Government
A state has ultimate authority over a territory and exists as an entity.
A government is the political structure that rules a nation, and governmental functions are handled by groups of officials whose roles in society are distinctly governmental.

8. Functionalist View
According to functionalism, nation-states form because society needs them.
Durkheim argued that without sufficient controls modern societies will experience disruptive internal conflicts.

9. Functionalist View
For Durkheim, the role of the state is to provide centralized regulation of economic life.
Through social constraints, a government can perform necessary functions.

10. Conflict Perspective
According to the conflict perspective, nation-states exist primarily to serve the interests of a society’s elite.
Marx suggests that the nature of a society is determined by the relations between those who own property and those who do not.

11. Conflict Perspective
The bourgeoisie (the few in the ruling class) and the proletariat (the mass of workers) form the major social classes in capitalist societies.
According to Marx, political life is a reflection of relations between these two social classes.

12. Global Political Systems
Democracy – a system of elected officials responsible for fulfilling majority wishes.
Totalitarianism – a political system in which there is an absolute ruler, who controls all aspects of social life.
Authoritarianism – a political system controlled by nonelected rulers with absolute control who frequently permit some individual freedom.

13. Assumptions in a Representative Democracy
The first assumption recognizes that not everyone in modern society can actively participate in all political decisions.
A representative government does not expect its people to be involved deeply in politics; citizens merely need to vote.
In the second assumption of representative democracy, citizens will not elect (or reelect) politicians who fail to satisfy the wishes of the majority.

14. Is democracy escalating throughout the world?
Data from the United Nations Development Programme show a worldwide trend toward democratization
The percentage of countries with democratic governments went from under one-third in the early 1970s to over half today.

15. Totalitarianism
Totalitarianism states are replete with “not-free” characteristics:
a detailed ideology designed to encompass all phases of individuals’ lives
a single political party typically controlled by one person

16. Totalitarianism a well-coordinated system of terror
total control of all means of communication
a monopoly over military resources
a planned economy directed by a state bureaucracy

17. Authoritarianism
Authoritarianism is a residual category between democracy and totalitarianism, but is closer to totalitarianism than democracy.
Countless regimes have leaned toward totalitarianism but do not have all of its defining characteristics, including monarchies (King Fahd of Saudia Arabia) and dictatorships (Saddam Hussein of Iraq).

18. Political Power and The Vote
The U.S. emphasizes political participation through voting.
Voting is an important source of power for citizens.
Candidates from which to choose is restricted due to only 2 parties in the U.S. Many groups are not effectively represented.

19. Political Terrorism
Terrorism entails the illegal use of violence or threats of violence against a government, a group, or an individual in pursuit of a political, religious, economic, or social goal.

20. Types of Political Terrorism
Revolutionary terrorism involves acts of violence aimed at replacing an existing government.
Totalitarian terrorism is perpetrated by an established and legitimate government, and intimidates and controls its own population through violence and fear.

21. Types of Political Terrorism
State terrorism manipulates through normal government agencies rather than by special coercive forces, is short term, and targets only specific groups.
International terrorism includes instances involving a foreign country with terrorist agents in another country, or negotiation of terrorist demands with a foreign government.

22. International Terrorist Incidents

23. Political Power in American Society: The Vote
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.

24. Political Power in American Society: The Vote
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

25. American interest in voting is relatively low, partly because of the public’s relatively low confidence in political leaders.
In the 2008 presidential election, 64 percent of eligible U.S. voters exercised their right up from 50 percent in 1996

26. Most attitudes and beliefs that are expressed as political opinions are gained through a learning process called political socialization.
This can be formal, as in government class, or informal, as through the family, the media, economic status, and education.

27. Voter Participation in Presidential Elections: 1932-2004

28. Distribution of Electoral College Cotes

29. Questions for Consideration
How does the electoral college work and is it truly representative of the population?
What are the implications for future elections?
What does the distribution of electoral votes across the country say about political power in the U.S.?

30. Pluralism: The Functionalist Approach
Pluralism – decision making is a result of competition, bargaining, and compromise among diverse special interest groups.
no one group holds the majority of power

31. Pluralism: The Functionalist Approach
Interest groups – a group organized to influence political decision making.
Political Action Committees (PACs) – organizations established by interest groups to raise and distribution funds for the purpose of electing or defeating candidates.

32. Elitism: The Conflict Approach
Elitism – a community or society is controlled from the top by a few individuals or organization.
C. Wright Mills and others support the view that the U.S. no longer has separate economic, political, and military leaders; rather, prominent people in each sphere overlap to form a unified elite.
Power elite – a unified coalition of top military, corporate, and government leaders

33. Growth in the Number of PACs: 1974-1006

34. Elitism
According to elitism, power is concentrated in the hands of a relatively few individuals and organizations.
Power elite—a unified coalition of top military, corporate, and government leaders (the executive branch in particular).
According to Mills, members of the power elite share common interests and similar social and economic backgrounds.

35. Focus on Theoretical Perspectives

36. Questions for Consideration
What markets are changed as a result of globalization?
How have technology and robotics changed the production of goods and services?
What does the economy play in social change?

37. Global Economic Systems
Societies differ regarding the kinds of political and economic systems they develop.
Variations in economies play particularly important roles in relationships among nations because fundamental differences in worldviews are likely to underlie differing solutions to problems associated with the production and distribution of goods and services.

38. Capitalist Economies
Capitalism – an economic system founded on two assumptions:
sanctity of private property
the right of individuals to of profit from their labor
Capitalist societies are founded on the belief that private individuals and organizations have the right to pursue their own private gain and that society will benefit from their activities.

39. Capitalist Economies
Under capitalism, most property belongs to private individuals and organizations rather than to the state or the community.
In practice, there are important deviations from the ideal capitalist model, one of which involves the tendency to form a monopoly, a single company controlling a particular market, or an oligopoly, a combination of companies controlling a market.

40. Socialist Economies
What are the distinguishing characteristics of socialist economies?
the means of production transfers from the wealthy capitalists to the government
government planning in socialist economies replaces the disorder and unpredictability of the market
the state ensures all members of society a share of the nation’s wealth

41. Mixed Economic Systems
Every nation violates some of the assumptions of its economic system, and most nations fall between the extremes of capitalism and socialism.
Many scholars indicate that the demise of communism ensures the triumph of capitalism.
The 21st century will see a global economy dominated by capitalism.

42. The Global Culture of Capitalism
Two basic types of variants of capitalism:
Individualistic capitalism promotes the principles of self-interest, the free market, profit maximization, and the highest return possible on stockholder investment.
Communitarian capitalism, which emphasizes the interests of employees, customers, and society, exists in Europe and Japan.

43. The Corporation
Corporation – an organization owned by shareholders who have limited liability and limited control over organizational affairs.
A key feature is separation of ownership from control.
Total corporate assets are concentrated in the hands of a relatively few giant corporations.

44. Effects of Modern Corporations
Corporate leaders develop influential political and social ties.
Corporate officials are able to reward or punish elected government officials through investment decisions.
Wealthy members of society, including corporate officials, affect a political candidate’s chance of being elected in the first place.

45. Effects of Modern Corporations
The political clout of large corporations is multiplied because of interlocking directorates (members of corporations sitting on one another’s boards of directors).
The political power of corporations is enhanced through conglomerates (a network of unrelated businesses operating under a single corporate umbrella).

46. Globalization and Multinational Corporations
Globalization is the process by which crumbling geographical barriers permit members of different societies to become aware of increasingly similar economic, political, and social arrangements.
Multinational corporations are firms in highly industrialized societies with operating facilities throughout the world.

47. Work in the Contemporary American Economy
Primary sector – depends on the natural environment to produce economic goods. Types of jobs in this sector include: farmer, miner, fishery worker, timber worker, cattle rancher.
Secondary sector – manufactured products are made from raw materials. Occupations in this sector include: blue collar workers of all types.
Tertiary sector – provides services. Service industries include insurance, real estate, retail sales, and entertainment.

48. Occupational Structure: Two Tiers
Core tier – contains dominant positions in large firms (examples: computer technology, pharmaceutical, and aerospace firms).
Between 30 and 40% of U.S. workers are in the core tier.

49. Occupational Structure: Two Tiers
Peripheral tier – composed of jobs in smaller firms that either are competing for business excluded from core firms or are engaged in less profitable industries (examples: agriculture, textiles, and small-scale retail trade).
Most U.S. workers—60 to 70 percent—are employed in the peripheral tier.

50. Downsizing
Downsizing refers to the reduction in a corporation’s workforce designed to cut costs, increase profits, and enhance stock values.

51. Downsizing
To justify downsizing, business leaders point to several factors:
rising health-care costs
the need to become leaner and less hierarchically structured in an increasingly competitive global environment,
eliminate levels of middle management that can be replaced by computers and information technology

52. Downsizing Downsizing became popular during the 1990s.
Since 1985, more than 8 million employees were downsized,
half of whom held white-collar jobs.
In 2001, corporate layoffs increased nearly 40 percent over the previous year.

53. Questions for Consideration
Give some examples of how environmental challenges have been the result of becoming more globalized.
How does the struggle between globalization and technology challenge some of our values?