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Economics and Politics
Society The Basics FOURTEENTH EDITION Chapter 12 Economics and Politics
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Learning Objectives (1 of 2)
12.1 Summarize historical changes to the economy Assess the operation of capitalist and socialist economies Analyze patterns of employment and unemployment in the United States Discuss the importance of corporations to the U.S. economy Distinguish traditional, rational-legal, and charismatic authority.
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Learning Objectives (2 of 2)
12.6 Compare monarchy and democracy as well as authoritarian and totalitarian political systems Analyze economic and social issues using the political spectrum Apply the pluralist, power-elite, and Marxist models to the U.S. political system Describe causes of both revolution and terrorism Identify factors encouraging war or peace.
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The Power of Society Will the jobs you take throughout your life reflect choices you make based on your personal abilities and interests?
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The Economy: Historical Overview Learning Objective 12
The Economy: Historical Overview Learning Objective 12.1: Summarize historical changes to the economy. The economy operates in a predictable manner. Goods and services ensure survival, make life easier, and contribute to social identity. Economies of modern high-income nations are the result of centuries of social change. Three technological revolutions reorganized production and, in the process, transformed social life: agricultural revolution, industrial revolution, and informational revolution.
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The Economy Economy Goods Services
Social institution that organizes a society’s production, distribution, and consumption of goods and services Goods Commodities ranging from necessities to luxury items Services Activities that benefit others
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Agricultural Revolution (1 of 2)
The earliest societies were hunters and gatherers with no distinct economy. With surplus, the economy was a distinct social institution Agricultural technology Job specialization Permanent settlements Trade As societies industrialize, a smaller share of the labor force works in agriculture.
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Agricultural Revolution (2 of 2)
In the United States, much of the agricultural work that remains is performed by immigrants from -income nations. These farm workers from Mexico travel throughout Florida during the tomato harvest.
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Industrial Revolution
Industrialization created economic change in five ways. New sources of energies Centralization of work in factories Manufacturing and mass production Specialization Wage labor 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 Specialization Diverse division of labor and lower overall skill requirements Wage labor Working for strangers with intense supervision
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Information Revolution and Postindustrial Society
Postindustrial economy Productive system of service work and 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
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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 As countries become richer, the primary sector becomes a smaller part of the economy and the tertiary or service sector becomes larger. Source: Estimates based on World Bank (2012). Global economy Expanding economic activity that crosses national borders
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The Global Economy Development
Five major consequences Global division of labor More products pass through many nations National governments no longer control the economic activity within their borders Small number of businesses control a vast share of the world’s wealth Concerns raised about the rights and opportunities of workers Development of a global economy has five major consequences.
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Global Map 12-2 Service-Sector Employment in Global Perspective
The tertiary sector of the economy becomes ever larger as a nation’s income level rises. In the United States, Canada, the countries of Western Europe, much of South America, Australia, and Japan, about two-thirds of the labor force performs service work. Source: Data from International Labour Organization (2012).
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Economic Systems: Paths to Justice (1 of 2) Learning Objective 12
Economic Systems: Paths to Justice (1 of 2) Learning Objective 12.2: Assess the operation of capitalist and socialist economies. Capitalism Economic system in which natural resources and the means of producing goods and services are privately owned Key features of capitalism Private ownership of property Pursuit of personal profit Competition and consumer choice Justice Freedom of the marketplace is a capitalist system
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Economic Systems: Paths to Justice (2 of 2)
Socialism Economic system in which natural resources and the means of producing goods and services are collectively owned Key features Collective ownership of property Pursuit of collective goals Government control of the economy Justice Meeting everyone’s needs in roughly equal manner in a socialist system
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Alternative Systems Welfare capitalism State capitalism
Economic and political system that combines market- based economy and social welfare programs State capitalism Economic and political system in which companies are privately owned but cooperate closely with government
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Relative Advantages (1 of 2)
Capitalism Economic productivity GDP is $13,500 Economic equality More income disparity Personal freedom Emphasizes freedom to pursue personal self-interest
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Relative Advantages (2 of 2)
Socialism Economic productivity GDP is $5,000 Economic equality Less income disparity Personal freedom Emphasizes freedom from basic want
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Work in the Postindustrial U. S. Economy Learning Objective 12
Work in the Postindustrial U.S. Economy Learning Objective 12.3: Analyze patterns of employment and unemployment in the United States. The changing workplace In 1900, roughly 40% of U.S. workers were farmers. In 2011, just 1.6% were in agriculture Family farm replaced by corporate agribusinesses Compared to a century ago, when the economy involved a larger share of factory and farm work, making a living in the United States now involves mostly white-collar service jobs. Source: Estimates based on U.S. Department of Labor (2012).
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Work in the Postindustrial U.S. Economy: Labor Unions
Organizations of workers that seek to improve wages and working conditions through various strategies, including negotiations and strikes Reasons for union decline Shrinking industrial sector Newer service jobs not unionized Changes in laws
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National Map 12-1 Right-to-Work Laws across the United States
Unions oppose “right-to-work” laws because these laws limit the power of unions to organize workers. In general, right-to-work laws have been enacted in the South and in many of the Plains States and western states. By contrast, states in the Northeast, in much of the Midwest, and on the West Coast have not enacted right-to-work laws. How do you think the two categories of states typically voted in the 2012 presidential election Source: National Conference of State Legislatures (2012).
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Professions Professions Characteristics
Prestigious white-collar occupation that requires extensive formal education Characteristics Theoretical knowledge Self-regulated practice Authority over clients Orientation to community rather than self-interest Includes the ministry, medicine, law, academia, architecture, accountancy, and social work
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Self-Employment, Unemployment, and Underemployment (1 of 2)
Earning a living without being on the payroll of a large organization Unemployment Jobs disappear as occupations become obsolete, businesses change operational plans, and companies downsize or close. Although college graduates have a low risk of unemployment, race is related to unemployment for all categories of people. Source: U.S. Department of Labor (2013). Every society has some unemployment Self-employment 2012: 7% of today’s workers Most are small business owners. More likely blue-collar than white-collar Unemployment 2012: 8.1% 40% of unemployed out of work for more than half a year People who gave up looking for jobs not included in statistics
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Self-Employment, Unemployment, and Underemployment (2 of 2)
Lower salaries, fewer benefits, and reduced/no pensions Many workers agree to cuts in pay and/or benefits
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The “Jobless Recovery”
Impediments to job recovery Smaller workforce before the recession More companies have opened factories/offices abroad. The U.S. economy is simply not growing fast enough. In global terms, U.S. workers are simply too expensive and not highly skilled enough to fare well in today’s economy. The economy operates in cycles, with periods of prosperity followed by periods of recession— what we commonly call “boom and bust.” In
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New Information Technology and Work
The Information Revolution is changing what people do in a number of ways De-skilling labor Making work more abstract Limiting workplace interaction Increasing employers' control of workers Allowing companies to relocate work In today’s corporate world, computers are changing the nature of work just as factories did more than a century ago. In what ways is computer-based work different from factory work? In what ways do you think it is very much the same?
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Corporations Learning Objective 12
Corporations Learning Objective 12.4: Discuss the importance of corporations to the U.S. economy. Economic concentration Largest corporation dominate U.S. economy Conglomerates and corporate linkages New markets, spin offs, mergers, shared stock, interlocking directorates Corporation Organization with a legal existence, including rights and liabilities, separate from that of its members Conglomerate Giant corporation composed of many smaller corporations Corporations: Are They Competitive? Large corporations not operationally independent Monopolies forbidden; oligopoly allowed Corporations and the Global Economy Corporations account for most global output. Modernization theory: Support market as key to global prosperity Dependency theory: Call for replacing markets with government-based economic policies
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Corporations and the Global Economy
Corporations account for most global economic output. Modernization theory: Market is the key to global progress and affluence. Dependency theory: Multinationals worsen global inequality and increase dependency of poor nations on rich nations. Economic future of U.S. will occur in global arena. There is need to address global inequality and population increase.
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Power and Authority Learning Objective 12
Power and Authority Learning Objective 12.5: Distinguish traditional, rational-legal, and charismatic authority. Power Ability to achieve desired ends despite resistance from others (Weber) Authority Power that people perceive as legitimate rather than coercive (Weber)
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Politics and Government
Social institution that distributes power, sets a society’s goals, and makes decisions Government Formal organization that directs the political life of a society Government Formal organization that directs the political life of a society demand compliance from the population Most governments do not threaten their people (Weber). Every government tries to make itself seem legitimate.
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Authority (1 of 3) Traditional
Power legitimized through respect for long established cultural patterns Authority declines as societies industrialize. Traditional authority is also a source of strength for patriarchy. Modern scientific thinking, the specialization demanded by industrial production, and the social changes and cultural diversity resulting from immigration all combine to weaken tradition.
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Authority (2 of 3) Rational-legal
Power is legitimized by legally enacted rules and regulations. Rationally enacted rules also guide the use of power in everyday life. Authority resides not in the person but in the office. Bureaucratic authority
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Authority (3 of 3) Charismatic
Power legitimized through extraordinary personal ability and devotion and obedience are inspired. Authority depends less on a person’s ancestry or office and more on personality. Routinization of charisma transforms authority into some combination of traditional and bureaucratic authority.
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Monarchy Learning Objective 12
Monarchy Learning Objective 12.6: Compare monarchy and democracy as well as authoritarian and totalitarian political systems. Absolute monarchy Rulers claiming power based on divine right Examples Saudi Arabia, Kuwait, Bahrain Monarchy is typically found in societies that have yet to industrialize. The recent political unrest throughout the Middle East indicates growing resistance to this form of political system in today’s world. Even so, King Abdullah and members of his royal family strengthen their control of Saudi Arabia through their support of Arabic heritage and culture.
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Politics in Global Perspective: Monarchy
Constitutional monarchy Symbolic heads of state Political principles rule Elected official actually rules Examples: Great Britain, Spain, Denmark
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Democracy Representative democracy
Authority in hands of elected leaders chosen by people in elections The United States is not truly democratic Extensive use of unelected bureaucratic officials Wealthy have more political influence than impoverished
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Democracy and Freedom: Capitalist and Socialist Approaches
Capitalist societies Claim freedom Provide broad political liberties which mean more to rich than poor Socialist societies Claim security Provide limits to individual choices
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Global Map 12-3 Political Freedom in Global Perspective
In 2013, a total of 90 of the world’s 195 nations, containing 43 percent of all people, were politically “free”; that is, they offered their citizens extensive political rights and civil liberties. Another 58 countries, which included 23 percent of the world’s people, were “partly free,” with more limited rights and liberties. The remaining 47 nations, home to 34 percent of humanity, fall into the category of “not free.” In these countries, government sharply restricts individual initiative. Between 1980 and 2013, democracy made significant gains, largely in Latin America and Eastern Europe. Source: Freedom House (2013).
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Other Political Systems (1 of 2)
Authoritarianism Political system that denies popular participation in government Authoritarian government is indifferent to people’s needs. Examples: Saudi Arabia, Bahrain, Ethiopia
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Other Political Systems (2 of 2)
Totalitarianism Highly centralized political system that extensively regulates people’s lives Seeks to bend people to the will of the government Examples: Vietnam, North Korea In totalitarian nations, government controls all aspects of people’s lives. During the funeral of Kim Jong-Il, absolute ruler of North Korea, people were told to line the route used for his public funeral and display appropriate anguish at his death. After the event, government officials examined photographs of the crowds and prosecuted those whose sorrow did not measure up to their demands.
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Politics in the United States (1 of 2) Learning Objective 12
Politics in the United States (1 of 2) Learning Objective 12.7: Analyze economic and social issues using the political spectrum. Individualism Key descriptor for U.S. political culture Welfare state Government agencies and programs provide benefits to population One in six US workers is a government employee The US welfare state is still smaller than those of many other high-income nations.
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Politics in the United States (2 of 2)
Political spectrum Ranges from extremely liberal on the left to extremely conservative on the right Types of issues Economic issues Social issues Economic issues Taxing Market and government involvement Social issues Class, race, and gender Party identification
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Politics in the United States: Class, Race, Gender, and Age
Class position Majority hold mix of conservative and liberal attitudes. Race African Americans are generally more liberal than whites. Gender Women tend to be more liberal than men. Age Younger voters becoming more liberal. Economic issues Taxing Market and government involvement Social issues Class, race, and gender Party identification
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The Presidential Election, 2012: Popular Vote by County
Barack Obama won the 2012 presidential election with 51 percent of the total popular vote, but he received a majority of the vote in only about one-fourth of the nation’s counties. Obama and other Democrats did well in more densely populated urban areas, while Mitt Romney and other Republicans did well in less populated rural areas. Can you explain why urban areas are mostly Democratic and rural areas are mostly Republican? What other social characteristics do you think distinguish the people who vote Democratic from those who vote Republican? Source: The Guardian (2012).
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Politics in the United States: Special-Interest Groups
Strong in nations where political parties tend to be weak Employ lobbyists to work on their behalf Political action committee (PAC) Formed by a special-interest group, independent of political parties Organized to raise and spend money in support of political goals In 2012, members of the House of Representatives seeking reelection spent an average of $1.5 million on their campaigns, with most of the money coming from outside organizations, including PACs. Senators seeking reelection spent an average of $11 million on their races. In 2012, Barack Obama and Mitt Romney together received and spent $2.6 billion on their presidential campaigns, including more than $500 million from PACs and other organizations (Center for Responsive Politics, 2012). Does raising the most money matter? The answer is yes—in the 2012 elections, in 94 percent of the House races and 79 percent of the Senate races, the candidate who spent the most money ended up winning the election. Lower-income people have more pressing financial needs, and so they tend to focus on economic issues, such as job wages and benefits. Higher-income people, by contrast, provide support for many social issues, such as animal rights.
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Politics in the United States: Voter Apathy
Americans are less likely to vote today than a century ago. Half of registered voters participated in presidential election. Participation rose to 57.5% in 2012. People with a bigger stake in U.S. society are more likely to vote. Conservatives: Apathy is political indifference Liberals: Apathy is alienation
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Theoretical Analysis of Power in Society (1 of 2) Learning Objective 12.8: Apply the pluralist, power-elite, and Marxist models to the U.S. political system. Pluralist model: People rule Analysis of politics that sees power as spread among many competing interest groups One of the most significant political forces to develop in recent years is the Tea Party movement. Pluralist model Polsby (1959): Concluded that in New Haven, no one group—not even the upper class—ruled all the other Supporters claim that government has grown too big, too expensive, and now threatens the people. Do you see government as a “problem” the way many people on the right side of the political spectrum do? Or do you see it as the “solution” the way many people on the left side of the political spectrum do? Why?
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Theoretical Analysis of Power in Society (2 of 2)
Power-elite model: Few people rule Analysis of politics that sees power as concentrated among the rich Marxist political-economy model: The system is biased Analysis that explains politics in terms of the operation of a society’s economic system Power-elite model Lynd and Lynd (1937): Concluded that in “Middletown”, power elite was one family Marxist political-economy model Liazos (1982): Democratic society impossible as long as basic institutions do not meet needs of all
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Power beyond the Rules: Political Revolution Learning Objective 12
Power beyond the Rules: Political Revolution Learning Objective 12.9: Describe causes of both revolution and terrorism. Political revolutions have common traits Rising expectations Unresponsive government Radical leadership by intellectuals Establishing new legitimacy In 2011, as part of the popular movement that swept across northern Africa and the Middle East, Egyptians forced President Hosni Mubarak from office. Rising expectations Tend to happen when quality of life is improving Unresponsive government Government unwilling or unable to reform Radical leadership by intellectuals Thomas Hobbes: Intellectuals provide the justification for revolution. Establishing new legitimacy Guarding against the counterrevolution
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Power beyond the Rules: Terrorism
Acts of violence or the threat of violence used as a political strategy by an individual or a group. Characteristics Violence used as legitimate political tactic; channels of negotiation bypassed Terrorism used by governments and individuals Democratic countries especially vulnerable because of broad civil liberties One person’s terrorist is another's freedom fighter Terrorism is a complex political process typically involving parties with differing levels of global power. The television series Homeland illustrates that terrorism is also a matter of defining some parties as “good” and others as “evil” and sometimes never being sure which is which. How accurately do you think the mass media in the United States portray the global conflicts we call “terrorism”?
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War and Peace Causes of war (Wright) Perceived threats Social problems
Political objectives Absence of alternatives Almost half of all U.S. deaths in war occurred during the Civil War (1861–65). Sources: Compiled from various sources by Maris A. Vinovskis (1989) and the author. Perceived threats Threats to people and territory Social problems Internal problems and frustration Political objectives Show of force and protecting one’s own property Moral objectives Rallying people around morality Absence of alternatives Limited options
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War and Peace: Social Class, Gender, and the Military
Military personnel typically from working class Share of women in military increasing Conventional warfare is symmetrical. Terrorism is asymmetrical. In 2013, the U.S. armed forces announced plans to integrate women into military combat operations by Do you see this as a step forward for women? Why or why not?
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War and Peace: Costs and causes of militarism
$1.7 trillion spent annually on global military budgets U.S. accounts for 41% of global military spending Causes Arms race Military-industrial complex Regional conflict Nuclear weapons Danger of catastrophic war increases with nuclear proliferation 4000 operational nuclear warheads exist today
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Mass Media and War Learning Objective 12
Mass Media and War Learning Objective 12.10: Identify factors encouraging war or peace. Mass media and war Mass media provides selective information to a worldwide audience. Television and other media are almost as important to the outcome of a conflict as the military that is doing the actual fighting.
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Pursuing Peace Recent Approaches Deterrence High-technology defense
Diplomacy and disarmament Keep talking about reducing arms Resolving underlying conflict Deterrence Balance of power between societies High-technology defense Strategic defense initiative Diplomacy and disarmament Keep talking about reducing arms Resolving underlying conflict Increase spending on promoting peace rather than building up military
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