1. Politics and the Economy
Chapter 11
Politics and the Economy

2. Module 47
Power and Authority
Political system: social institution responsible for implementing and achieving society’s goals
Interacts closely with economic system: social institution thorough which goods and services are produced, distributed, and consumed
Politics: “who gets what, when, and how” (Lasswell)

3. Power Power: ability to exercise one’s will over others (Weber)
Module 47
Power
Power: ability to exercise one’s will over others (Weber)
Sources of power in political systems
Force: actual or threatened use of coercion to impose one’s political dissidents
Influence: exercise of power through process of persuasion
Authority: institutionalized power recognized by the people over whom it is exercised

4. Types of Authority Three ideal types of authority (Weber)
Module 47
Types of Authority
Three ideal types of authority (Weber)
Traditional authority: legitimate power conferred by custom and accepted practice
Rational-legal authority: power made legitimate by law
Charismatic authority: power made legitimate by leader’s exceptional personal or emotional appeal to his or her followers

5. Module 47
Types of Government
Monarchy: Form of government headed by a single member of a royal family
Oligarchy: Form of government in which a few individuals rule

6. Types of Government Dictatorship and Totalitarianism
Module 47
Types of Government
Dictatorship and Totalitarianism
Authoritarianism (Dictatorship): Government in which one person has nearly total power to make and enforce laws
Totalitarianism: Involves virtually complete government control and surveillance over all aspects of a society’s social and political life

7. Types of Government Democracy Government by the people
Module 47
Types of Government
Democracy
Government by the people
Representative democracy: Elected members of legislatures make laws
Direct democracy: direct participation by all citizens

8. Legal definition typically requires formal declaration of hostilities
Module 47
War and Peace
War: Conflict between organizations that possess trained combat forces equipped with deadly weapons
Legal definition typically requires formal declaration of hostilities

9. Module 47
War
Global view studies how and why nations become engaged in military conflict
Nation-state view stresses interaction of internal political, socioeconomic, and cultural forces
Micro view focuses on social impact of war on individuals and their groups

10. Module 47
Peace
Peace: Absence of war and proactive effort to develop cooperative relations among nations
Global Peace Index: U.S. ranked 97 on list of 121 nations
Since 1990s, 90% of armed conflicts occurred within states

11. Module 49
Economic Systems
Industrial society: Society that depends on mechanization to produce its goods and services
Capitalism
Socialism

12. The Industrial Revolution
Brought five changes to the economy
New sources of energy
Centralization of work in factories
Manufacturing and mass production
Specialization
Wage labor
New laws banned child labor, set minimum wage levels, improved workplace safety, and extended schooling and political rights to a large segment of the population

13. The Information Revolution and Postindustrial Society
Postindustrial Economy
A productive system based on service work and high technology
Driving economic change: third technological breakthrough
Computer
Three important changes
From tangible products to ideas
From mechanical skills to literacy skills
From factories to almost anywhere

14. Sectors of the Economy Primary Sector
The part of the economy that draws raw materials from the natural environment
Secondary Sector
The part of the economy that transforms raw materials into manufactured goods
Tertiary Sector
The part of the economy that involves services rather than goods

15. Capitalism
Four distinctive features:
Private ownership of the means of production
Pursuit of personal profit
Competition
Lack of government intervention
(Laissez-faire)

16. Socialism
Three distinctive features:
Public ownership of the means of production.
Pursuit of collective goals.
Centralized decision-making.

17. Module 49
The Informal Economy
Informal economy: Transfer of money, goods, or services is not reported to the government
Difficult to measure
In developing nations, informal economy represents 40% to 60% of total economic activity

18. Conglomerates and Corporate Linkages
Giant corporations composed of smaller corporations
Form as
Corporations enter new markets
New companies spin off
Mergers
Conglomerates are linked because they own each other’s stock

19. Corporations are linked through
Interlocking directorates
Networks of people who serve as directors of many corporations
Linkages encourage illegal activity
Price-fixing
Companies share information about their pricing policies

20. General Motors Board - Interlocking Directorates

21. Interlocking Directorates

22. Interlocking Directorates

23. Interlocking Directorates

24. Corporations: Are They Competitive?
Monopoly
The domination of a market by a single producer
Forbidden by federal law
Oligopoly
The domination of a market by a few producers
Legal and common
Federal government regulates to protect the public interest
Often too little, too late, resulting in harm to millions

25. Corporations and the Global Economy
Corporations now account for most of the planet’s economic output
Biggest are based in U.S., Japan, and Western Europe
Their marketplace is the entire world
Know that poor countries contain most of the world’s people and resources
Modernization theory – raises living standards
Dependency theorists – increase inequality

26. The Changing Face of the Workforce
Module 50
The Changing Face of the Workforce
U.S. workforce is constantly changing
Sociologists and labor specialists foresee workforce increasingly composed of women and racial and ethnic minorities
54% of new workers expected to be women from 1984 to 2014
More diverse workforce means relationships between workers more likely to cross gender, racial, and ethnic lines

27. Module 50
Deindustrialization
Deindustrialization: systematic, widespread withdrawal of investment in basic aspects of productivity
Can take the form of corporate restructuring
Downsizing: reductions in a company’s workforce as part of deindustrialization
Social costs cannot be overemphasized

28. © 2013 Pearson Education, Inc. All rights reserved.

29. The Globalization of Capitalism
A New Global Structure and the Global Oppression of Workers
Stagnant Paychecks
Trends in Leisure
Telecommuting
The New Economic System and the Old Divisions of Wealth
© Pearson Education, Inc. All rights reserved.

30. The Globalization of Capitalism
High insecurity with layoffs, plant closings, and the prospect of more of the same
Half of the entire country’s income goes to the richest fifth of Americans
Only 3 percent goes to the poorest fifth
The Global Superclass
© Pearson Education, Inc. All rights reserved.

31. The Inverted Income Pyramid: The Proportion of Income Received by Each Fifth of the U.S. Population
© Pearson Education, Inc. All rights reserved.