government & the economy

economic system

social institution through which goods & services are produced, distributed, & consumed

political system

social institutions that founded on a recognized set of procedures for implementing society’s goals

ultimate responsibility for social policy

political system

societies have evolved from

preindustrial societies

industrial societies

depends on mechanization to produce goods & services

3 basic types of industrial societies

capitalist; socialist; communist

capitalism

means of production are held largely by private hands & main incentive for economic activity is the accumulation of profit

laissez-faire

“let them do”; people compete freely, with minimal government intervention in the economy

Adam Smith

father of economics; laissez-faire

types of capitalism

laissez-faire

contemporary capitalism

monopoly

contemporary capitalism

focus on profit & ownership but with regulation; monitor prices, set safety standards; regulations help not endanger workers

monopoly

control of the market by a single business firm; violates the principle of free competition & laissez-faire capitalism

outlaw monopoly via

antitrust laws

antitrust laws

only allow monopolies in utilities & transportation

competition is much more restrictive than expected in a

free enterprise system

socialism

means of production & distribution in society are collectively rather than privately owned; Karl Marx

socialism objective

meet people’s needs rather than profit

socialism beliefs

believe government should make economic decisions; government owns the means of production

communism

all property is communally owned & no social distinction are made based on people’s ability to produce

power

ability to exercise one’s will over others; overcome resistance & control individuals’ behavior

3 basic sources of power

force; influence; authority

force

actual or threat of coercion to impose one’s will; use of prison or execution

influence

exercise of power through persuasion; use mass media to change minds

authority

institutionalized power that is recognized by the people who it is exercised; held by elected individuals, public servants, or referees

started 3 classifications of authority

Weber

traditional

power is conferred by custom & accepted practice; king or queen

classifications of authority

traditional

rational-legal

charismatic

rational-legal

power conferred from law (Constitution); president or prime minister

charismatic

power legitmate by leader’s exceptional personal appeals to their followers; MLK Jr., Jesus Christ

power of Charisma

from belief of follower than qualities of leader; given power by the media

multiple authority people

JFK; FDR

types of government

monarchy

oligarchy

dictatorship

totalitarianism

democracy

representative democracy

monarchy

head of state is a single member of a royal family

oligarchy

few individuals rule (rich); in modern times rule by military or party

dictatorship

government which is ruled by 1 person who has nearly all power; seize power

totalitarianism

virtually

democracy

government by the people

represenatative democracy

certain individuals are selected to speak to people

models of power structure in U.S.

power elite model

power elite

small group of military, industrial, & government leaders who control the fate of the U.S.; power rest in and outside the government

3 levels of PEM

top; middle; bottom

top PEM

corporate rich, military leaders, & executive branch

middle PEM

legislators, opinion leaders, & interest groups

bottom PEM

exploited masses

C. Wright Mills developed

power elite model

pluralist model

power shared among many groups; heavily criticized

why pluarlist model is criticized

the groups are often white groups with absent minority voices

deindustrialization

widespread withdrawal of investment in basic aspects of productivity such as factors & plants; outsourcing

outsourcing

move from U.S. to other country

downsizing

reductions taken in a company’s workforce; blames automation & new technology

sharing economy

connecting owners to underused assets with other willing to pay to use them; majority came out of great recession

sharing economy examples

uber, lyft, airbnb

temporary workforce

individuals have precarious work; workers usually cannot support household; part-time

precarious work

employment that is poorly paid, insecure, & unprotected

offshoring

the transfer of work to foreign contractors; turn to locations in developing countries

main purpose of offshoring

to build profits; used to be limited to manufacturing

reshoring

bring jobs back to U.S. is limited; case-by-case basis