CHAPTER 13 The Economy and Politics

1. CHAPTER 13The Economy and Politics Section 1: The Economic Institution Section 2: The Political Institution

2. Section 1: The Economic Institution Objectives: • Compare and contrast the characteristics of the capitalist and the social economic systems. • Discuss developments that have transformed the American economic system.

3. Section 1: The Economic Institution Economic Models of Capitalism and Socialism CAPITALISM: • Factors of production are owned by individuals • Forces of profit and competition regulate economic activity • Minimal government interference

4. Section 1: The Economic Institution Economic Models of Capitalism and Socialism (continued) SOCIALISM: • Factors of production are owned by the government • Economic activity regulated by the government • Pure form is communism

5. Section 1: The Economic Institution Economic Models of Capitalism and Socialism (continued) BOTH: • Exist in industrial and postindustrial societies • “Pure” forms are ideal types

6. Section 1: The Economic Institution The American Economy • Rise of Corporate Capitalism – has changed the relationship between business ownership and control • Economic Globalization– many of the large corporations are also multinational • The 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

7. Section 2: The Political Institution Objectives: • Explain how the exercise of power varies by type of government • Describe the major characteristics of the U.S. political system.

8. Section 2: The Political Institution The Exercise Of Power • Traditional authority – power that is based on long-standing custom • Rational-Legal – based on formal rules and regulations • Charismatic – based on a leader’s charisma

9. Section 2: The Political Institution The U.S. Political System • Dominated by two major political parties – Democratsand Republicans • Includes interest groups and PACs, which help groups with minority views influence government decisions • Has proportional representation, but debate exists over who holds power

10. Section 2: The Political Institution The U.S. Political System (continued) • Consists of three branches of the government – the executive, legislative, and judicial • Includes public participation, although voter participation varies and is relatively low overall