Politics and the Economy 11 Ch. 13. Politics and the Economy The Transformation of Economic Systems Economy (Market): The mechanism by which values.

Politics and the Economy

11

Ch. 13

Politics and the EconomyPolitics and the EconomyPolitics and the Economy

The Transformation of The Transformation of Economic SystemsEconomic Systems

Economy (Market):The mechanism by which values are established

in order to exchange goods and servicesThe system of distribution of goods and servicesEssential to our welfareRadically different today than in the past

22


33

Preindustrial Societies: Birth of InequalityHunting and Gathering Societies

High degree of social equality

Pastoral and Horticultural SocietiesSurplus; trade between groups

Agricultural SocietiesThe invention of the plow; specialized division of labor

Increasing Social and Economic Inequalities

The Transformation of Economic The Transformation of Economic SystemsSystems


44

Industrial Societies: Birth of the MachineBrought Previously Unseen SurplusesConspicuous ConsumptionFactories Exploited LaborMore Efficient Machines Led to Conspicuous Consumption

Postindustrial Societies: Birth of Information AgeService SectorVast Surplus of GoodsExtensive Trade among NationsWider Variety and Quantity of GoodsInformation ExplosionGlobal Village

The Transformation of Economic SystemsThe Transformation of Economic Systems


55

Capitalism: Three componentsPrivate Ownership of Means of ProductionMarket CompetitionPursuit of Profit

Laissez-Faire Capitalism – Government is not involved in decision making

Welfare or State Capitalism – Individuals have certain rights but are overseen by the government –this is the U.S. economy

World Economic Systems-CapitalismWorld Economic Systems-Capitalism


66

Socialism - Three components:Public Ownership of Means of ProductionCentral PlanningDistribution of Goods without Profit Motive

Needs Decided by Central CommitteeDesigned to Eliminate CompetitionEveryone Works for the Government

World Economic Systems-SocialismWorld Economic Systems-Socialism


The Convergence of Capitalism and The Convergence of Capitalism and SocialismSocialism

77

Criticism of Capitalism: leads to social inequalityCriticism of Socialism: not respecting individual rights

Both capitalist and socialist systems have adopted features from the other

The convergence theory refers to the growing similarities shared by capitalism and socialism

i.e. Western banks in China, unemployment compensation in the U.S.


Work in the Postindustrial EconomyThe dual labor market

Primary labor market–Jobs that provide extensive benefits to workers

Secondary labor market–Jobs that provide minimal benefits to workers

Labor unions–Organizations of workers that seek to improve wages and working conditions through various strategies

Decline of unionsShrinking industrial sectorService jobs are unlikely to be unionized.


Self-Employment, Unemployment, and UnderemploymentInvolves exchange of goods and services not reported

to the government, including from work done “ on the side” and from illegal activities (drug dealing)

Undocumented workers – over 1 millionSelf-employment–Earning a living without being on the

payroll of a large organization

Underemployment: Lower salaries, fewer benefits, and reduced/no pensions

Many workers agree to cuts in pay and/or benefits.

Jobs disappear as:occupations become obsolete.businesses change the way they do business.companies downsize or close.


The Underground Economy

Most of us occasionally participate in the underground economy in small ways.

Much of the underground economy is due to criminal activity.

The largest segment is people who fail to report legally earned income on their tax returns.

Economic activity involving income not reported to the government as required by law


Race and Gender in the Workplace

In the past, white men have been the mainstay of the US labor force.

In the future, more workers will be women and minorities.

The workplace must develop programs and policies that meet the needs of a socially diverse workforce and encourage everyone to work together effectively and respectfully.


New Information Technology and Work

Computers are de-skilling labor (McDonaldization).

Computers are making work more abstract.

Computers limit workplace interaction.Computers increase employers' control

of workers.Computers allow companies to relocate

work.


The Globalization of CapitalismThe Globalization of Capitalism

1313

Stagnant Paychecks: the productivity of U.S. workers has increased year after year, yet inflation and cost of living has affected the value of a paycheck

New Economic System and Old Divisions of Wealth: U.S. worker face high insecurities in the workplace with layoffs and plant closings. Many are affected by outsourcing. The wealthy are not really affected by the current recession.


The Globalization of CapitalismThe Globalization of Capitalism

1414

The Global Superclass: this term refers to the leaders of the globe’s top multinational companies

This class is very powerful and wealthyThey have access to the top circle of political power

around the globe


Corporations

A few large corporations dominate the US economy.

Economic concentration has created the conglomerate, a giant corporation comprising many smaller corporations.

Federal law forbids monopoly, the domination of a market by a single producer.

Oligopoly, the domination of a market by a few producers, is legal and common.

Organizations with a legal existence, including rights and liabilities, apart from those of its members


Global Capitalism and Our Future Global Trade will continue to increase

Elimination of Tariffs

1)The Most Industrialized Nations will continue to garner the world’s wealth

2)A major concern is that economic inequality will increase between rich and poor nations and within rich and poor nations

1616


Politics

Democracy and Human Rights: Having our Say


1818

RepublicansOlderMiddle to Upper Social

ClassesConservativeLess government

DemocratsYoungerMinority GroupsWomen more than menLiberalWorking classesMore government

The U.S. Political SystemThe U.S. Political System


1919

Non-Hispanic Whites most likely to voteMen and women tend to vote for different presidential

candidatesThe more people feel they have a stake in the system, the

more likely they are to voteVoter Apathy is present in the U.S.: indifference to voting-

Why is it so widespread?

Voting PatternsVoting Patterns


Political Power in American Society: The Vote

Regular and Fair Elections?Voting is:

an important source of power for citizensit enables people to remove incompetent, corrupt, or insensitive

officials from officeTo influence issues at the local, state, and national levels.

In current U.S. practice, voting has severe limitations as a means of exercising power.the range of candidates from which to choose is restrictedthe high cost of political campaigns reinforces the limited choice of

political candidatesthe exercise of power by those at the top of the American political

structure


2121

Special Interest Groups:People Who Think Alike on a Particular Issue and Mobilize for Political Action

Lobbyists:People Paid to Influence Legislation who work for Special Interest groups

Often times, lobbyists are people who are retired from the government

The main criticism of Special Interest groups and Lobbyists are that they buy votes

Lobbyists and Lobbyists and Special InterestsSpecial Interests


2222

Functionalist Perspective: Pluralism (Diffusion Among Many)

The functionalist perspective believes that the U.S. is ruled by many different groups

There is a check and balance between the main branches of the government: Legislative, Judicial, and Executive

Functionalist Functionalist PerspectivePerspective


2323

Conflict Perspective: The Power Elite/Ruling Class

-Elites rule the government (Mills and Dumhoff)

Conflict Conflict PerspectivePerspective


Nationalism and the Nation-State

• For millennia people lived in small bands and tribes that often allowed a great deal of participation in governance by many or all members.

• Nationalism – is the intense belief in the worth, rightness, and glory of one’s own nation

• Nation – an independent entity with full sovereignty • Sovereignty – a nation is sovereign when it answers to no

higher power, except as it may freely enter into treaties • State – term used by political scientists to refer to a sovereign

government entity • Nation-state – a sovereign entity that represents the

interests of people who share a common culture, presumably a common language, as well as a common territory


Democracy and Its Alternatives

Democracy has been tried since ancient times, but has often seemed unwieldy and fractious compared to its alternatives. Democracy – or rule by the people Monarchy – or rule by a hereditary leader City-state – is a city that functions as an

autonomous unit under its own leadership (e.g., ancient Athens)

Oligarchy – is rule by a powerful elite One-party system – governmental system that

gives control to a single party Two-party system – governmental system that

includes two active political parties


Why is Democracy important?

• Many social scientists believe that it is a mechanism that convinces us that we have some sort of power when we actually don’t.


This idea of Democracy……according to Joseph Stiglitz (Economist) is

that it’s being reconfigured and it’s changing.

Stiglitz’s concepts:-Democratic Deficit—gap between

informal/intrinsic and substantive rights.


Intrinsic rights: basic rights, freedom of speech—values important to people-instrumental mechanism in that if there were

certain problems in society then democracy as a process allows for that info to pass and be disseminated —allows us to call out and hold governments somewhat responsible/accountable.

Substantive rights: crucial issue—what happens in practice—US doesn’t do very well.-Example: The average life of a Black male in

Harlem is less than a Bangladeshi -ability to exercise those rights?-What happens in cases where your social/intrinsic rights are

being violated? Then it affects your ability to participate in general, your community, vote, etc.


Democratic Paradox: (Stiglitz’s concept)

Democracy spreading around the world, other countries/societies are embracing it (Arab Spring); but those who have it don’t want it. This has to do with the way politics are being reconfigured.Example: we still vote but it doesn’t function

—people are losing interest in the idea of democracy.


So, Democracy today has to do with the working

definition of Democracy. This includes: Regular and fair elections—all membersEffective competitionCivil Liberties—political and civil rights—having right to

vote, right to run for office, etc.

But in order for democracy to function well, itrequires it’s 3 legs to be balanced. These are:

3) Civil society—the 3rd sector; lies between other 2 sectors

2) Government—fair elections; non-corrupt, etc.1) Market—*what is happening in terms of the

democratic deficit is that the market is becoming more powerful and out of balance than the other two legs


Democracy is a process leading to a “thing”—not really endpoint because it’s constantly changing.

But in a democracy decisions of government should be transparent and open to discussionparticipation allows for accountability; but this

isn’t happening.


Is Democracy Universal?Stiglitz makes the argument that everyone

in theworld accepts democracy at some level.

Institutions aren’t universal but the idea of having power over your own life is universal.

There is a more general notion that people should have some input in their lives—this has been around since way past modern societies—African and Native American tribes.

Democracy isn’t tied to a state—having the ability or right to have a say in these processes is accepted (perhaps not by those in power).


How is globalization affecting democracy?

Issues mentioned above are being affected.Becoming larger than nation stateIssues of power—who is accountable?


GlobalizationAlways been aroundProcessIncreased movement of food, ideas, culture,

politics, interconnectednessTechnology is keyPolitical – global one idea system

3434


The Right to Be Fully Human

Following WWII, the UN drafted a comprehensive declaration of human rights and has followed this with statements on the rights of refugees, children, women and others. Human rights – refers to the rights of individuals

around the world Civil rights – refers to the rights of citizens of

nations


Democracy supposed to act on behalf of people – government is supposed to enforce that.

However, if government power is being compromised and put in others’ hands it takes away from people because of privatization (water, gas, etc).

This is seen as government convergence—more and more government privatization and shifting power from government.Overlapping communities across borders because of

increasing risks—ex. Environmental problems, terrorism, etc.growing risk beyond scope of one nationbecause of these things democracy needs to be

rethought in this era of globalizationoWho is supposed to resolve this? UN?


http://www.youtube.com/watch?v=-1EHTt4HFng&feature=channel

http://www.youtube.com/watch?v=tOLfGUKX8EE&feature=channel

http://www.youtube.com/watch?v=k_3K1PCZHE0&feature=channel

Politics and the Economy 11 Ch. 13. Politics and the Economy The Transformation of Economic Systems Economy (Market): The mechanism by which values.

Documents

postindustrial economy

economy work

economy selfemployment

criticism of capitalism

convergence of capitalism

exchange of goods

preindustrial societies

economic inequalities