Chapter 13 Politics and the Economy. Chapter Outline Introducing Politics and the Economy Power and Politics Power and the State Who Governs?

Chapter 13

Politics and the Economy

Chapter Outline

Introducing Politics and the Economy Power and Politics Power and the State Who Governs? Models of U.S. Democracy Individual Participation in U.S. Government Modern Economic Systems The U.S. Economic System Work in the United States Where This Leaves Us

Introducing Politics and the Economy Politics and the Economy are two separate social institutions, but they are interwoven.

Both should be considered when answering questions such as:

◦ How do people earn their living?

◦ Why are wages so much higher in some types of work than in others…and in some countries than others?

◦ How do government leaders get elected, or deposed…or assassinated?

Power and Politics Coercion is the exercise of power through

force or the threat of force. Authority is power supported by norms and

values that legitimate its use. 1. Traditional Authority – the right to make

decisions for others based on the sanctity of time-honored routines

2. Charismatic Authority – the right to make decisions based on perceived extraordinary personal characteristics.3. Rational-Legal Authority – the right to make decisions based on rationally established rules.

Traditional Authority

Traditional authority, like that enjoyed by King Mohamed VI of Morocco, exists when an individual’s right to make decisions for others is widely accepted based on time-honored beliefs.

Power and Politics

Combining Bases of Authority:

An elected official who adds charisma to his rational-legal authority will increase his power. ◦ Ex. Ronald Reagan or Barack Obama can serve as examples.

A charismatic leader who establishes a rational-legal system to manage her followers will also increase her power.

◦ Ex. Mary Baker Eddy (founded the Christian Science religion and turned it into a large, bureaucratic organization)

Political Institutions Politics is the social structure of power within a

society.

◦ Political Institutions - concerned with the social structure of power; the most prominent political institution is the state.

The state is a social structure that successfully claims a monopoly on the legitimate use of force and coercion within a territory. 

Power and Politics

Power and the StateThe State is distinguished from other political institutions by two characteristics:

(1) its jurisdiction for legitimate decision making is broader than that of other institutions, and

(2) it controls the use of legalized coercion in a society.

Power and the State

Jurisdiction exercises power over society as a whole.

State Coercion state claims a monopoly on the legitimate use of three different types of coercion :

1. arrest, attack, imprison and even kill

2. take money from citizens with taxes and fines

3. negotiate with other countries and use its armed forces to attack and kill in other countries

Power and the StateAuthoritarian Systems are political systems in which the leadership is not selected by the people and legally cannot be changed by them.

also known as totalitarianism, dictatorship, military junta, despotism, monarchies, and theocracies.

some authoritarian governments, such as monarchies, govern through traditional authority; others have no legitimate authority and rest their power almost exclusively on coercion.

Connections: Social Policy

According to Amnesty International, torture is still used in Mexico, Russia, China, and elsewhere.

Prisoners and political activists may be beaten, raped, shocked, and more.

The United States has used torture in Afghanistan, Iraq, and Guantánamo Bay and has trained its allies in the use of torture.

The United Nations has established a network of independent observers to monitor prison conditions around the world.

Power and the State

Democracy a political system that provides regular, constitutional opportunities for a change in leadership according to the will of the majority.

usually occurs in wealthier nations with a large middle class who have enough social and economic resources to organize effectively - can hold government accountable.

flourishes in countries with competing interest groups, each of which comprises a minority.

Democracy

Democracy is now taking root in South Africa, where the financial and political power of the white minority is counterbalanced by the sheer numbers and political determination of the black majority.

Power and the State

Globalization and State Power multinational companies (Nike) and organizations (European Union) operate beyond their ‘home’ borders.

some organizations are set up with ‘global’ jurisdiction (i.e. World Court, World Bank, United Nations).

some theorists argue that multinational corporations and international organizations hold the power once held by states.

others argue that globalization is not new and the power of the state is greater than ever.

Who Governs? Models of U.S. DemocracyStructural-Functional: Pluralist

Model Assumes parts of system run harmoniously –

for the good of all. Focus on checks/balances within government Limits to the theory - interests of wealthy

coalesce. Programs designed to distribute wealth succeed only when:

1) crisis causes elite to favor change, 2) elite disagree and fail to coalesce

Who Governs? Models of U.S. DemocracyConflict: Power-Elite Model contends that a relatively unified elite group

makes all major decisions, based on its own interests

The power elite comprises the people who occupy the top positions in three bureaucracies—the military, industry, and the executive branch of government—and who are thought to act together to run the United States in their own interests.

Characteristic Pluralist Power Elite

Unit of analysis Interest Groups Power elites

Source of power

Situational; depends on issue

Inherited/positional; key positions in

economic/ social institutions

Distribution of power

Dispersed among competing groups

Concentrated in fairly homogeneous elite

Limits of power Limited by shifting and crosscutting

loyalties

Potentially limited when other groups

can unite in opposition

Role of State Arena where interest groups

compete

One of several sources of power

Comparison of U.S. Political Models

Participation in U.S. Government

Although all U.S. citizens over the age of 18 have the right to vote, middle-aged, better off, and better-educated citizens are most likely to do so.

In typical local elections, 70 – 80% citizens do not vote. This poses critical questions about the power of U.S. democracy

Individual Participation in U.S. GovernmentWho Votes?

Characteristics that enhance political activity:

Social Class – people with more education, more income and prestigious jobs more likely

Age – middle aged/ older persons more likely

Race and Ethnicity - whites more likely than African Americans. Hispanics least likely.

Participation in the 2006 Election

Age Percentage who voted

18 – 20 yrs 18.6

21 – 24 yrs 24.8

25 – 34 yrs 33.5

35 – 44 yrs 45.5

45 – 64 yrs 57.6

65 yrs and over 62.5

Participation in the 2006 Election

Sex Percentage who voted

Male 46.9

Female 48.6

Race / Ethnicity Percentage who voted

White 49.7

African American 41

Hispanic 32.3

Participation in the 2006 Election

Education Percentage who voted

8 yrs or less 28.9

Some high school 26.8

High school graduate 40.5

Some college 49.5

College graduate 63.9

Employment Status Percentage who voted

Employed 48.4

Unemployed 31.1

Individual Participation in U.S. GovernmentWhich Party? In U.S. whoever receives the most votes wins – ‘winner take all’ process.

As a result, in practice two parties share almost all political power: Democrats and Republicans

Both parties are basically centrist with philosophical differences:

◦ Democrats associated with liberal morality

◦ Republicans associated with conservative morality

Individual Participation in U.S. GovernmentWhy So Few Voters? Scholars suggest that Americans believe the political process is corrupt - doesn’t matter who gets elected – parties are similar.

Others suggest that politicians have made it difficult for people to vote

Still others argue that no major political party has involved poor minority and disenchanted Americans. (Voting rates increased through grassroots outreach during Obama campaign)

Ex-felon Disenfranchisement Ex-felon disenfranchisement is the loss of

voting privileges suffered by those who have been convicted of a felony.

In some states, ex-felon disenfranchisement applies only to those in prison; in other states, it is lifelong.

Number of disenfranchised are overwhelmingly poor

The number is high enough to significantly decrease the chances of electing politicians who favor helping the poor.

Modern Economic Systems The economy is everything involved in the production and distribution of goods and services.

There are basically two types of systems:

1. Capitalism

2. Socialism

Capitalism The economic system based on competition in

which most wealth (land, capital and labor) is private property, to be used by its owners to maximize their own gain.

Encourages hard work and innovation toward maximizing competitive advantage.

Does not attend to distribution and does not provide for the public good.

Those who have neither labor nor capital lose. Workers earn only a fraction of what capitalists

earn

Modern Economic Systems

Socialism

The economic structure in which productive tools (land, labor and capital) are owned and managed by the workers and used for the collective (public) good.

Creed of pure socialism: from each according to ability, to each according to need.

The key drawback of socialism is the absence of personal economic incentive.

Production is usually lower in socialist economies.

Modern Economic Systems

Modern Economic Systems

Mixed Economies Most Western societies today have a mixture of capitalist and socialist economic structures,

Vital services such as mail and industries such as steel might be socialized to ensure continuation of service or availability of good.

Other services (i.e. health care) have been partially socialized because societies have determined it unethical to deny such services to the poor.

Modern Economic Systems

The Political Economy Refers to the interaction of political and economic forms within a nation.

Both capitalism and socialism can coexist with either authoritarian or democratic systems.

The term ‘communist’ refers to societies in which a socialist economy is guided by a political elite and enforced by a military elite.

Privatization and the U.S. Political Economy:

Privatization refers to two processes:

1. The increasing “farming out” of government services to private, capitalistic firms.

2. The increasing redesign of government services to operate more like corporate businesses.

Modern Economic Systems

The Political Economy

The Postindustrial Economy Primary sector extracts raw materials from

the environment. In a preindustrial economy, the vast majority of the labor force is engaged this sector.

Secondary sector processes raw materials for sale. The Industrial Revolution brought a shift from the primary sector to the secondary sector.

Tertiary sector provides services for sale. Postindustrial economies focus on the tertiary sector (i.e. physicians, schoolteachers, hotel maids, short-order cooks, and police officers).

The U.S. Economic System

Changing Labor Force in theUnited States

The U.S. Economic System

The Corporate Economy While over 250.000 business operate in the U.S., most of the nation’s capital and labor are tied up in a few giant, transnational corporations.

Wealthy capitalists link through shared ownership; large firms link through members on boards of directors. More cooperative than competitive.

Decreased competition reduces productivity – but it increases joint political influence – domestically and beyond.

The U.S. Economic System

The “Wal-Mart” Economy This corporation is so large and powerful that it affects the entire U.S. economy.

Until 1980s federal law prohibited monopolies (a corporation that holds so large a market share for a given good/service that it controls market).

Wal-Mart makes its profit selling cheap; both suppliers and competitors are driven out of business if they fail to deliver goods at a cheap price. Suppliers shift to foreign labor markets to meet price demands. U.S. production suffers.

The “Wal-Mart Effect”

Although individual consumers benefit from Wal-Mart’s low prices, its low pay, unwillingness to pay benefits, and ability to drive competitors out of business hurts communities.

As a result, protests against Wal-Mart stores and policies have increased around the country.

The U.S. Economic System

The Economy in CrisisAs of April 2009:

25% of Americans cannot pay their bills; 50% fear job loss.

1M+ homes are in foreclosure.

Pension and savings are gone.

Economic trends of less regulation and more risk have created a system in crisis.

Because of global interconnectedness, the crisis has spread around the world

Work in the United StatesOccupations Professional occupations – demand specialized skills and creative freedom.

Non-professional occupations - do not require long years of education, do not have the autonomy to set their own educational and licensing standards, and do not have public’s confidence that they are motivated primarily by a code of ethics and a sense of service.

Underground economy – associated with workers who attempt to hide from state regulation. Can occur in profession and non-professional occupations,

Characteristics of Professions

A profession must have the autonomy to set its own educational and licensing standards and police its members for incompetence.

A profession must have technical, specialized knowledge, learned through extended, systematic training.

A profession must follow a code of ethics and work more from a sense of service than from a desire for profit.

Work in the United States

Non-professionals

• The fastest growing jobs in the United States today are non-professional minimum wage jobs in the service sector.

• These jobs offer few benefits and fewer prospects for advancement.

Projected Fastest Growing JobsOccupation New Job Openings by 2016Personal / home care aides 389,000

Home health aides 384,000

Computer software engineers – applications

226,000

Medical assistants 148,000

Computer systems analysts 146,000

Network systems & data communications analysts

140,000

Social & human service assistants

114,000

Computer software engineers – systems software

99,000

Pharmacy technicians 91,000

Dental assistants 82,000

The Experience of Work Worker Satisfaction - U.S. surveys find that

80% of workers report satisfaction with their work. Professionals report highest satisfaction.

Alienation - occurs when workers have no control over the work process or the product of their labor.

Emotional labor – refers to the work of smiling, appearing happy, or in other ways suggesting that one enjoys providing a service. i.e. ‘service with a smile’

Work in the United States

Work in the United StatesUnemployment & Underemployment

Unemployed - people who lack a job, are available for work and are actively seeking work.

Underemployed – people who hold jobs more appropriate for people with fewer skills, or hold part-time jobs only because they can’t find full time jobs.

The Future of Work Occupational outlook:

◦ More jobs in tertiary sector & ‘McJobs’ – lower pay, little status, few benefits◦ Growth in health care jobs; computer engineering

Technology and the Future:◦ Deskilling of some jobs.◦ Displacements of the work force as some jobs vanish and new ones appear. ◦ Greater supervision. Computerization and automation give management more control over the production process.◦ Impact of Technology will reflect struggles between workers and management.

Work in the United States

Globalization and the Future – globalization has in part led our national economy through a process of reverse development: we export raw materials such as logs and wheat and import manufactured products such as VCRs and automobiles.

Protecting U.S. Jobs – three general policy options: ◦ The conservative free market approach - proposes that the way to keep jobs in the U.S. is to reduce wages and benefits. ◦ Liberal approach: Government Policies - should restrict plant closings and support investments in local economies to provide more secure jobs. ◦ Social investment approach – stop high education jobs from going overseas by adequately educating American students.

Work in the United StatesThe Future of Work

Where This Leaves Us Power can be exercised through coercion or authority (traditional, rational-legal, charismatic).

The state is most prominent political institution – it has a monopoly on the legitimate use of coercion.

Democracy likely in nations with interest group plurality, large middle class, relatively little income inequality.

US Political process: Power elite and pluralist models.

Voting low in US – voter alienation.

Two economic models: capitalism and socialism.

Both capitalist and socialist nations can be either democratic or authoritarian.

Transnational corporations wield global political economic power.

Tertiary sector will continue to provide most jobs in US.

Quick Quiz

1. The ability to get others to do something against their wishes is called:

A. power.

B. influence.

C. politics.

D. conflict.

Answer: A

The ability to get others to do something against their wishes is called power.

2. Decision-making power based on the sanctity of time-honored routines is called:

A. charismatic authority.

B. rational-legal authority.

C. traditional authority.

D. moral authority.

Answer: C

Decision-making power based on the sanctity of time-honored routines is called traditional authority.

3. Decision-making power based on an individual’s perceived extraordinary personal characteristics is called:

A. charismatic authority.

B. personal authority.

C. rational-legal authority.

D. influence.

Answer: A

Decision-making power based on an individual’s perceived extraordinary personal characteristics is called charismatic authority.

4. Rational-legal authority is best described as:

A. authority based on extraordinary personal characteristics.

B. authority based on the sanctity of time honored routines.

C. authority based on submission to a set of reasonably established rules.

D. exercise of power through force or threat of force.

Answer: C

• Rational-legal authority is best described as authority based on submission to a set of reasonably established rules.

5. Patterns of political participation by social class show that:

A. the working class is most likely to vote.

B. the higher the social class, the higher the rate of participation.

C. the lower the social class, the higher the rate of participation.

D. class no longer affects voting participation.

Answer: B

Patterns of political participation by social class show that the higher the social class, the higher the rate of participation.