Chapter 13 Political and Economic Institutions

1. Chapter 13 Political and Economic Institutions Thomas Emanuele Trayce Thompson Ryan Canty Conor Aspel Nick Roux

2. Introduction • This chapter is about the American political and economic systems. It focuses on the political institutions that guide our country, as well as the economic institutions that control the division of resources. A political institution has the responsibility of handling conflicts that arise from economics decisions. An economic institution, on the other hand, is the set of functions that concern the production and distribution of goods and services for a society.

3. Power and Authority • Poweris the ability to control the behavior of others, even against their will • Power was originally defined by sociologist Max Weber • People such as Martin Luther King, Jr. used power through their charismatic personalities • Weber recognized another form of power known as coercion, or the use of physical force or threats to exert control

4. Authority • Weber believed in a more stable form of power known as authority, or power accepted as legitimate by those subject to it • Ex. Teachers have authority over students because students accept the results given by the teacher • There are three types of authority: • Charistmatic authority arises from a leader’s personal characteristics • Traditional authority is when the legitimacy of a leader is rooted in custom • Rational-legal authority is when power resides in the offices rather than the officials • Used in most modern governments

5. Types of Political Systems • Contemporary nation-states can be classified into three basic types: democratic, totalitarian, and authoritarian • Decomcracy involves all citizens in self- government. We are more famililar with representative democracy, in which elected officials are responsible for fulfilling the wishes of the majority of citizens

6. Types of Political Systems (Continued) • Totalitarianism is a political system in which a ruler with absolute power attempts to control all aspects of society • Most well known example is Hitler and the Nazi party • In the middle of these two systems is authoritarianism, or a polital system controlled by elected or nonelected rulers who usually permit some degree of individual freedom but do not allow popular participation in government • Includes certain monarchies and military seizures of power • Ex. Fidel Castro’s takeover of Cuba

7. Political Power in American Society • The amount of real choice exercised through voting is limited • Only candidates endorsed by a major political party has a chance to win • Most attitudes and beliefs that are expressed as political opinions are gained through a learning process called political socialization. • Can be formal, such as government class, or informal, such as family or the media

8. Two Models of Political Power • In a democratic society, two models of political power are evident- pluralism and elitism • According to pluralism, political decisions are the result of bargaining and compromise among special interest groups • An interest group is a group organized to influence political decision making • Power is widely distributed throughout a society or community • According to elitism, a community or society is controlled from the top by a few individuals or organizations • Also known as the power elite, or the key people in each area who overlap to form a unified group

9. Economic Systems • Economic systems involve the production and distribution of goods and services • Capitalism is an economic system founded on two basic premises: • The sanctity of private property • The right of individuals to profit from their labors • Capitalism fosters the rise of monopolies, or companies that control a particular market, and oligopolies, combinations of companies working together to control a market

10. Socialism • Different from capitalism is socialism, which believes that the means of production should be controlled by people as a whole • The state owns and controls property • All members of society share in the monetary benefits • Sweden is an example of a socialist government • Most nations incorporate a mixed economic system, using both public and private ownership Benito Mussolini

11. The Modern Corporation • Corporations hold great importance in modern economic systems • A corporation is an organization owned by shareholders • Corporations gain more power through interlocking directorates, or joint board of directors • Conglomerates also enhance the political power or corporations. They are networks of unrelated business operating under a single corporate umbrella • Ex. Nabisco holds companies in tobacco, pet food, and other fields.

12. Multinational Corporations • The world is increasingly being influenced by multinationals, or firms based in highly industrialized societies with operating facilities throughout the world • Ex. ExxonMobil

13. Work in the Modern Economy • There are three basic economic sectors • The primary sector depends on the natural environment to produce economic goods • Ex. Farmers/Fisherman • The secondary sector manufactures products from raw materials • Ex. Factory Workers • Employees in the tertiary sector provide services • Entertainment and retail sales

14. Occupational Structure • Occupations are categories of jobs that involve similar activities at different work locatiosn • US is developed into two-tier occupational structure • The core tier includes jobs with large firms holding dominant positions within their industries • Pharmaceutical and aerospace firms • The peripheral tier is composed of jobs in smaller firms that either are competing for business left over from core firms or are engaged in less profitable industries • Agriculture or small scale retail trade

15. Reducing Core Industry Employment • Two main strategies are used by top management to reduce employment in core industries • Downsizing is the process by which companies reduce the size of their full-time workforces • Contingent employment involves hiring people on a part time or short term basis • Much of this is due to new technology replacing the need for workers • Video Clip

16. The End

17. Group Participation • Activity: Trayce • Powerpoint: Thomas • Vocabulary: Ryan • Quiz and Candy: Conor • Presentation and Video: Nick