1. Copyright © Allyn & Bacon 2010 Problems in Politics and the Global Equality This multimedia product and its contents are protected under copyright law. The following are prohibited by law: any public performance or display, including transmission of any image over a network; preparation of any derivative work, including the extraction, in whole or in part, of any images; any rental, lease or lending of the program.

2. Copyright © Allyn & Bacon 2010 Chapter Outline Capitalism Socialism Mixed Economies Economic Systems Uneven Economic Development Transnational Corporations Concentration of Wealth National and consumer debt Corporate welfare Global and U.S. Economy Democracy Voter apathy Political Campaigns Government Politics Functionalist Conflict Interactionist Sociological Perspectives

3. Copyright © Allyn & Bacon 2010 Politics and the Economy Politics Social institution where power is acquired and exercised by individuals and groups Economy Social institution that ensures production, distribution, and consumption of goods and services Political Economy Interdependent workings and interests of political and economic systems

4. Copyright © Allyn & Bacon 2010 Three Economic Systems Capitalism: 4 features of ideal capitalism- Private ownership of means of production Own income-producing property and “buy” people’s labor Pursuit of personal profit People maximize their individual gain through personal profit Competition Creates competitive prices, keeps one business from getting excessive profits Lack of government intervention Free enterprise policies, gov. doesn’t regulate prices or wages.

5. Copyright © Allyn & Bacon 2010 Three Economic Systems, cont. Socialism Public ownership of means of production True socialism – means of production owned collectively or by the state, not privately or by corporations Primary motivation is for collective good of all citizens. Centralized decision-making Privatization of state owned goods is becoming common State still has active role in protecting rights

6. Copyright © Allyn & Bacon 2010 Three Economic Systems, cont. Mixed Economies Combination of both capitalism and socialism (most economies are of this type) State capitalism Government is involved in the dealings of private companies and help set rules, policies, and objectives. Democratic socialism (welfare capitalism) Private ownership of some of the means of production with governmental distribution of essential goods and services Medical care, child care, transportation, etc.

7. Copyright © Allyn & Bacon 2010 Problems in Global Economy Inequality occurs globally due to uneven economic development. Societies have 1 of 4 different economies: Pre-industrial Economies: Primary sector production: Extraction of raw materials and natural resources from the environment Industrial Economies: Secondary sector production: Processing of raw materials from primary sector Usually factory and manufacturing work

8. Copyright © Allyn & Bacon 2010 Problems in Global Economy, cont. Post-industrial Economies: Tertiary sector production Providing services rather than goods Transportation, communication, education, advertising, entertainment In advanced industrial societies there is great dependence on an international division of labor. Outsourcing of work for cheaper wages.

9. Copyright © Allyn & Bacon 2010 Problems in Global Economy, cont. Transnational Corporations and the Lack of Accountability: Transnational corporation (TNC): Large-scale business organizations headquartered in one country but operating in many countries Currently TNC account for 25% of total world production. TNC are big and powerful and play significant role in economies and governments of many countries. Most shareholders have little control over location of plants wages, or treatment of environment where factories are located. They tend to lack accountability to any government or regulatory agency.

10. Copyright © Allyn & Bacon 2010 Problems in U.S. Economy Concentration of Wealth: (can be traced through several stages.) (1850-1890)Earliest stage : Investment capital individually owned Families such as: Carnegie, Vanderbilt, Rockefeller (1890-1940) Monopoly Capitalism: Control of capital shifted to corporations Monopoly: single firm controls an industry and accounts for all sales in a specific market.

11. Copyright © Allyn & Bacon 2010 Problems in U.S. Economy, cont. (1940 –today) Advanced Monopoly Capitalism Ownership and control of industry and business highly concentrated After WWII rise in Oligopoly: small number of companies control an entire industry or service. Mergers often create monopoly situations Problem today with interlocking corporate directorates: members of the board of directors of a corporation also sit on the board of one or more other corporations. Diminish competition by producing interdependence.

12. Copyright © Allyn & Bacon 2010 Problems in U.S. Economy, cont. National Debt: amount of money owed by the federal government to creditors. Aug. 2008: U.S. debt was $9.6 trillion National debt continues to grow Consumer Debt: individual debt due to loans and credit cards. As of 2008, it was $2.52 trillion Private problem becomes public issue when people can’t pay back their debts

13. Copyright © Allyn & Bacon 2010 Problems in U.S. Economy, cont. Corporate welfare When government helps industries and private corporations in their economic pursuits Subsidies to farmers, tax credits for corporations. Potential Problems When subsidies originally put in place to stabilize the economy continue unnecessarily because of labor union and lobbying and campaign contributions

14. Copyright © Allyn & Bacon 2010 Political Participation Politics: social institutions through which power is acquired and exercised by some people or groups. Primary political system in contemporary societies have is government: formal organization that has legal and political authority to regulate relationships among people in a society and between society and others outside its borders.

15. Copyright © Allyn & Bacon 2010 Problems in U.S. Politics U.S. is a Democracy: Political system where the people hold the ruling power through elected representation Direct participatory democracy Meet and debate issues Separation of powers Among legislative, executive, and judicial branches Checks and balances All branches have some involvement in the others

16. Copyright © Allyn & Bacon 2010 Problems in U.S. Politics, cont. Voter apathy Undermines representative demography. If many do not vote, the interests of only a few are represented Gender gap Difference between a candidate’s number of votes from women and men Women and men seem to view social and economic issues differently

17. Copyright © Allyn & Bacon 2010 Problems in U.S. Politics, cont. Politics and Money in Political Campaigns: Political action committees (PACS) Fund campaigns to elect or defeat candidates on the basis of their positions on specific issues Individuals, unions, and corporations have circumvented the law through the soft money loophole Contributing to a political party instead of a specific candidate and through PACs Contributions can make the difference between success or defeat Violations are rarely punished but if they are it is well after an election is over.

18. Copyright © Allyn & Bacon 2010 Problems in U.S. Politics, cont. Government by Special-Interest Groups: Special interest groups exert influence on single issues (environment, gun control) Make contributions to candidates who will protect their interests and profits. Government by Bureaucracy: Permanent government: top tier civil service bureaucrats with strong power base who affect policies Persists even as presidents come and go

19. Copyright © Allyn & Bacon 2010 Problems in U.S. Politics, cont. Military-Industrial Complex: Refers to the inter-dependence of the military establishment and private contractors Involves private interest groups that manufacture military related goods, members of Congress that appropriate money for military programs and bureaucratic agencies (such as Defense Dept.) U.S. will always have an active military-industrial complex because of our focus on military ideals and significant preparedness for war.

20. Copyright © Allyn & Bacon 2010 Sociological Perspectives Functionalist: Government plays 4 functions: Maintains law and order Plans society and coordinates other institutions Meets social needs Handles international relations Pluralist Model: power is widely dispersed through many competing interest groups Problems can be solved by identifying dysfunctional elements and correcting them

21. Copyright © Allyn & Bacon 2010 Sociological Perspectives, cont. Conflict Elite Model: power is concentrated in a small group; the masses are relatively powerless U.S. is ruled by Power elite (C. Wright Mills) includes top business leaders, executive branch of government, and the military “top brass” Way to overcome problems in politics and economy is to change the entire system.