1. SociologyChapter 13 The Economy and Politics Preview Section 1: The Economic InstitutionThe Economic Institution Section 2: The Political InstitutionThe Political Institution Chapter Wrap-Up

2. SociologyChapter 13 Read to Discover What are the characteristics of the capitalist and the socialist economic systems? What developments have transformed the American economic system? Section 1: The Economic Institution

3. SociologyChapter 13 Question What are the similarities and differences between capitalism and socialism? Section 1: The Economic Institution

4. SociologyChapter 13 CapitalismSocialism ECONOMIC MODELS factors of production owned by individuals factors of production owned by individuals forces of profit and competition regulate economic activity forces of profit and competition regulate economic activity minimum government interference industrial and postindustrial societies industrial and postindustrial societies “pure” forms are ideal types “pure” forms are ideal types factors of production owned by the government factors of production owned by the government pure form is communism pure form is communism economic activity regulated by the government economic activity regulated by the government Section 1: The Economic Institution

5. SociologyChapter 13 CAPITALISM: Factors of production—resources needed to produce goods and services—are owned by individuals Forces of profit (self-interest) and competition regulate economic activity Minimal government interference; prices are regulated by the laws of supply and demand Section 1: The Economic Institution

6. SociologyChapter 13 SOCIALISM: Factors of production are owned by the government Economic activity regulated by the government and by social needs Pure form is communism Section 1: The Economic Institution

7. SociologyChapter 13 BOTH: Exist in industrial and postindustrial societies “Pure” forms are ideal types Section 1: The Economic Institution

8. SociologyChapter 13 Question What developments have transformed the American economic system? Section 1: The Economic Institution

9. SociologyChapter 13 Rise of Corporate Capitalism—has changed the relationship between business ownership and control (few stockholders control businesses) and created oligopolies Economic Globalization—many of the large corporations are also multinational 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 Section 1: The Economic Institution

10. SociologyChapter 13 Read to Discover How does the exercise of power vary by type of government? What are the major characteristics of the U.S. political system? Section 2: The Political Institution

11. SociologyChapter 13 Traditional Authority—power that is based on long-standing custom Rational-Legal Authority—based on formal rules and regulations Charismatic Authority—based on a leader’s charisma Coercion—power that is considered illegitimate by the people being governed Section 2: The Political Institution

12. SociologyChapter 13 Democracy—power exercised through the people Monarchy—one person rules –Constitutional Monarchy—power rests primarily with elected officials –Absolute Monarchy—hereditary ruler holds absolute power Dictatorship—power is in the hands of a single individual Junta—power has been seized by a small group Section 2: The Political Institution

13. SociologyChapter 13 Question What are the major characteristics of the U.S. political system? Section 2: The Political Institution

14. SociologyChapter 13 Public participation Three branches of government Major Characteristics of the U.S. Political System Two major political parties Proportional representation Interest groups and PACs Section 2: The Political Institution

15. SociologyChapter 13 Dominated by two major political parties— Democrats and Republicans Includes interest groups and PACs, which help groups with minority views influence government decisions Section 2: The Political Institution

16. SociologyChapter 13 Has proportional representation, but debate exists over who holds power Consists of three branches of the government— the executive, legislative, and judicial Includes public participation, although voter participation varies and is relatively low overall Section 2: The Political Institution

17. SociologyChapter 13 Chapter Wrap-Up Understanding Main Ideas 1.How do capitalism and socialism differ in terms of ownership of the factors of production and in terms of regulation of economic activity? 2.How has e-commerce changed the American economy? 3.How do democratic and authoritarian governments differ in the ways they use power? 4.What methods do interest groups and political action committees use to win political and public support for their issues?