1. CHAPTER 13 The Economy and Politics
Section 1: The Economic Institution
Section 2: The Political Institution

2. Objectives: Section 1: The Economic Institution
Compare and contrast the characteristics of the capitalist and the social economic systems.
Discuss developments that have transformed the American economic system.

3. Economic Models of Capitalism and Socialism
Section 1: The Economic Institution
Economic Models of Capitalism and Socialism
CAPITALISM:
Factors of production are owned by individuals
Forces of profit and competition regulate economic activity
Minimal government interference

4. Economic Models of Capitalism and Socialism
Section 1: The Economic Institution
Economic Models of Capitalism and Socialism
(continued)
SOCIALISM:
Factors of production are owned by the government
Economic activity regulated by the government
Pure form is communism

5. Economic Models of Capitalism and Socialism
Section 1: The Economic Institution
Economic Models of Capitalism and Socialism
(continued)
BOTH:
Exist in industrial and postindustrial societies
“Pure” forms are ideal types

6. The American Economy Section 1: The Economic Institution
Rise of Corporate Capitalism – has changed the relationship between business ownership and control
Economic Globalization – many of the large corporations are also multinational
The Changing Nature of Work – shift from an industrial base to a service base due, in part, to technology
E-Commerce – business conducted over the internet, which is based on information

7. Objectives: Section 2: The Political Institution
Explain how the exercise of power varies by type of government
Describe the major characteristics of the U.S. political system.

8. The Exercise Of Power Section 2: The Political Institution
Traditional authority – power that is based on long-standing custom
Rational-Legal – based on formal rules and regulations
Charismatic – based on a leader’s charisma

9. The U.S. Political System
Section 2: The Political Institution
The U.S. Political System
Dominated by two major political parties – Democrats and Republicans
Includes interest groups and PACs, which help groups with minority views influence government decisions
Has proportional representation, but debate exists over who holds power

10. The U.S. Political System
Section 2: The Political Institution
The U.S. Political System
(continued)
Consists of three branches of the government – the executive, legislative, and judicial
Includes public participation, although voter participation varies and is relatively low overall