Copyright © Allyn & Bacon 2010 Problems in Politics and the Global Equality This multimedia product and its contents are protected under copyright law.

Copyright © Allyn & Bacon 2010

Chapter 13Problems in Politics

and the Global Equality

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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


Politics and the EconomyPolitics

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


Three Economic SystemsCapitalism: 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.


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

commonState still has active role in protecting rights


Three Economic Systems, cont.

Mixed Economies Combination of both capitalism and socialism (most economies are of this type)

State capitalismGovernment 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.


Problems in Global EconomyInequality 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


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.


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.


Problems in U.S. EconomyConcentration of Wealth: (can be traced through several

stages.)

(1850-1890)Earliest stage :Investment capital individually ownedFamilies such as: Carnegie, Vanderbilt,

Rockefeller

(1890-1940) Monopoly Capitalism:Control of capital shifted to corporationsMonopoly: single firm controls an industry and

accounts for all sales in a specific market.


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.


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 trillionNational debt continues to grow

Consumer Debt: individual debt due to loans and credit cards.As of 2008, it was $2.52 trillionPrivate problem becomes public issue when

people can’t pay back their debts


Problems in U.S. Economy, cont.Corporate welfareWhen government helps industries and private

corporations in their economic pursuits Subsidies to farmers, tax credits for corporations.

Potential ProblemsWhen subsidies originally put in place to stabilize

the economy continue unnecessarily because of labor union and lobbying and campaign contributions


Political ParticipationPolitics: 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.


Problems in U.S. PoliticsU.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 powersAmong legislative, executive, and judicial branches

Checks and balancesAll branches have some involvement in the others


Problems in U.S. Politics, cont.Voter apathyUndermines representative demography. If many

do not vote, the interests of only a few are represented

Gender gapDifference between a candidate’s number of

votes from women and menWomen and men seem to view social and

economic issues differently


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.


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


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.


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


Sociological Perspectives, cont.ConflictElite 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.

Copyright © Allyn & Bacon 2010 Problems in Politics and the Global Equality This multimedia product and its contents are protected under copyright law.

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economic systems capitalism

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global economy inequality

primary sector production

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