Download The Economy and Politics

The Economy and Politics
Chapter 12: The Economy and Politics
Case Study: Liar’s Loans
Section 1: The Economic Institution
Section 2: The United States Economy
Section 3: The Political Institution
Section 4: The United States Political System
Simulation: Applying What You’ve Learned
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Case Study: Liar’s Loans
During the first decade of the 2000s, the United States
financial system faced a crisis caused by banks and other
lenders making loans to people who could not pay their
loans back. In previous years, lenders made money on
these risky loans by selling them to other financial
institutions. Eventually, however, these weak loans led to a
financial crisis that some likened to the beginning of the
Great Depression.
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Section 1 at a Glance
The Economic Institution
• Societies develop economic institutions to decide how to
allocate their resources.
• Economic systems have three basic sectors: primary,
secondary, and tertiary.
• The two main economic models are capitalism and
socialism.
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
The Economic Institution
Main Idea
• Societies develop economic institutions in order to distribute limited
resources.
Reading Focus
• How do economic basics affect society?
• What three sectors do all economic systems have?
• What are the two main economic models?
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Do you think you could
survive without money?
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Economic Basics
• Everybody has needs (such as food and water) and wants (such as a
new car or stereo).
• Every society creates a system of roles and norms that governs the
production, distribution, and consumption of goods and services. This
system is called the economic institution.
• People’s needs and wants are unlimited, but resources are limited.
• Three questions of an economy:
– What goods and services should be produced?
– How should these goods and services be produced?
– For whom should these goods and services be produced?
• Answers depend on the factors of production, or resources needed
to produce goods and services (such as land and labor).
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Reading Check
Find the Main Idea
What three questions
must every society answer?
Answer: What goods and services must be
produced? How should these goods and services
be produced? For whom should these goods and
services be produced?
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Economic Systems
Basic Sectors
Industrial Societies
• Primary sector: extracting raw
materials from the environment
• Advances in technology helps
move focus to secondary sector
• Secondary sector: use of raw
materials to manufacture goods
• Higher levels of agricultural
production allows for more
people
• Tertiary sector: providing
services
• Job specialization increases
Preindustrial Societies
Postindustrial Societies
• Very little technological
development
• Focus is on tertiary sector
• All economic activity carried out
by human and animal labor
• Greater emphasis placed on
knowledge and the collection and
distribution of information
• Focuses on primary sector
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Reading Check
Analyze
What type of economic society
is the United States?
Answer: capitalist
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Economic Models
Capitalism
Socialism
• Capitalism: Factors of production
owned by individuals; profit and
competition regulate activity
• Socialism: Factors of production
owned by the government;
government regulates economic
activity
• Law of supply: Producers will
supply products with high profit
• Law of demand: Demand will
increase as the price decreases
• Laissez-faire capitalism: No
government regulation
• Free-enterprise systems: Limited
government control of business
• Economic activity controlled by
social need and central
governmental planning
• Ideal communism is a political and
economic system in which property
is communally owned and social
classes cease to exist
All economies fall somewhere in between these two idealized systems.
Over time, economies have moved toward the center of this continuum.
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Reading Check
Find the Main Idea
What are the two main economic models?
Answer: capitalism and socialism
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Section 2 at a Glance
The United States Economy
• The United States economy became the strongest in the
world in the 1900s.
• New economic developments have changed the way the
U.S. economy works.
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
The United States Economy
Main Idea
The United States has one of the world’s richest and most diverse
economies.
Reading Focus
• Why are the 1900s sometimes called “the American Century”?
• What recent developments have transformed the American economic
system?
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
An Immigrant’s Dream of Prosperity
What does the United
States economy offer
that so many
immigrants want?
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
The American Century
Rise of Corporate
Capitalism
Globalization of Corporate
Capitalism
• Corporation: A business
organization owned by
stockholders and treated by law as
if it were an individual person
• Multinational: A corporation that
has factories and offices in several
countries
• Oligopoly: A few large companies
control an industry
• Protectionism: The use of trade
barriers to protect domestic
manufacturers from foreign
competition
• Free trade: Unrestricted trade
between countries
• Generally headquartered in one
country
• Some large multinationals have a
bigger economy than some poor
nations
• Some sociologists see global
capitalism as the decline of nationstates
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Reading Check
Find the Main Idea
What two trends have increased
U.S. economic power?
Answer: the rise of corporate capitalism and
globalization
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The Economy and Politics
Click on the image below to
play the Interactive.
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Recent Developments
The Changing Nature of
Work
• In the United States, work
has shifted from an industrial
base to a service base.
• Companies have cut costs
by moving jobs to other
countries and by eliminating
jobs.
• The service sector has not
absorbed displaced workers.
E-commerce
• Business conducted over the
Internet
• Internet allows companies to
automate many purchases
• Internet allows customers to
purchase at home
• Concerns about personal
information and keeping it
safe
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Recent Developments
Trouble Ahead?
• Challenges include government debt, Social Security system,
subprime mortgage crisis, and rising fuel prices
• About half of Americans carry debt on a credit card, with an
average debt of $10,000
• Americans owe about $2.5 trillion
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Reading Check
Analyze
What three factors led to a reduction
in U.S. manufacturing jobs?
Answer: advances in technology, globalization
(relocation of jobs to newly industrialized
countries), elimination of less-skilled jobs
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Section 3 at a Glance
The Political Institution
• Societies exercise power over their members through
political institutions.
• Legitimate power is authority; power exercised through
force is coercion.
• The two basic types of government are democratic and
authoritarian.
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
The Political Institution
Main Idea
Political institutions around the world exercise power in many different
ways.
Reading Focus
• How does sociology view politics?
• What gives legitimacy to a person or group in power?
• What types of government do sociologists recognize?
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Two Koreas Two Political Systems
Can a country's
politics really make
a difference?
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Sociological View of Politics
• For society to run smoothly, people must often act together for
the common good.
• In complex societies power is exercised by the state—the
primary political authority in society.
• A political institution is the system of roles and norms that
governs the distribution and exercise of power in society.
• Political institutions have evolved over time.
• Functionalists see the state as centering on the task of
maintaining order in society.
• Conflict theorists look at the way in which political institution
affects social change.
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Reading Check
Find the Main Idea
What are two sociological view of politics?
Answer: functionalists—analyze the political
institution in terms of the functions of the state;
conflict theorists—focus on how the political
institution brings about social change
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Legitimacy of Power
Legitimacy refers to whether those in power are viewed as
having the right to control, or govern, others.
Authority
Coercion
• Authority is legitimate power.
• Coercion is power used through
force and based on fear.
• Traditional authority is power
that is based on custom.
• Rational-legal authority is
based on rules and regulations.
• Charismatic authority is based
on the personal characteristics
of an individual exercising
power.
• All societies use coercion to an
extent, but an illegitimate
system has coercion as its main
method of maintaining order.
• The more that a government
relies on coercion, the less
stable that government will be.
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Reading Check
Draw Conclusions
What type of authority is the most difficult
to sustain from one leader to the next?
Answer: charismatic
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Types of Government
The state is the combined political structures of a society such as
the presidency, Congress, and Supreme Court in the United
States. The government is the people who direct the power of the
state.
Democratic Systems
• Power is exercised through the people. Those who are governed take
part in the governing process.
• Representational democracies are those in which voters elect
representatives.
• Representatives make political decisions.
• Constitutional monarchies have monarchs, but ultimate power
rests with elected officials.
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Conditions for Democracy
Industrialization
Access to Information
• Most democratic societies are
industrialized.
• Democracy requires wellinformed voters.
• Lenski says the educated urban
population of industrial societies
expect a voice.
• Democracies are strongest in
societies where the public and
media have open access to
information.
Limits on Power
Shared Values
• All governments exercise
power, but in democracies there
are clear limits placed on
government power.
• Although the right to hold
opposing views is a cornerstone
of democracy, a shared set of
basic values is essential.
• One way to do this is to spread
power among many groups.
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Authoritarian Systems
In a government based on authoritarianism, power rests firmly with
the state. However, this is not Weber’s authority of legitimate power.
An absolute monarchy is an
authoritarian system in which the
hereditary ruler holds absolute
power.
A dictatorship is an authoritarian
system in which power is in the
hands of a single individual.
A junta is an authoritarian system
in which a small group has seized
power from the previous
government by force.
Totalitarianism occurs when
those in power exercise complete
authority over the lives of
individual citizens.
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Reading Check
Summarize
What are the two basic types of
government?
Answer: democratic and authoritarian
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Section 4 at a Glance
The United States Political System
• The United States is one of the few countries with a twoparty system.
• Politicians are influenced by more than just the voters.
• People develop political beliefs through political
socialization.
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
The United States Political System
Main Idea
The United States is a democracy, but American voters are not the only
group that influences the government.
Reading Focus
• How does the number of political parties influence a country’s
political system?
• How do sociologists analyze who rules the United States?
• What is political socialization?
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Fighting the System
Why aren't third parties
more successful?
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Political Parties
Topics of special interest to sociologists are political parties,
special-interest groups, voter participation, political models, and
political socialization. A political party is an organization that
seeks to gain power legitimately.
Multiparty Systems
The Two-Party System
• Most democracies have multiparty
systems in which different parties
appeal to people on different
issues.
• Nearly all elected U.S. officials
since the Civil War have been
members of either the Democratic
Party or the Republican Party.
• This works because of
proportional representation—
seats in government are decided
by proportions of votes.
• Critics claim that this method of
election prevents growth of third
parties.
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Reading Check
Compare
What type of political party system
do most democratic countries have?
Answer: multiparty system
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Who Rules the United States?
Interest Groups
• Interest groups leverage political power to influence policies.
• They use lobbyists, monetary donations, collection of petitions,
organized letter-writing campaigns, and media campaigns.
Political Participation
• United States has one of the lowest rates of voter participation.
• Only about 60 percent of voting-age people vote.
• Race and ethnicity, age, and education level affect rates of
voting.
Political Models
• The power-elite model states that political power is exercised by
and for the privileged few.
• The pluralist model states that the political process is controlled
by interest groups that compete with one another for power.
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Reading Check
Summarize
What methods do interest groups use
to gain politicians’ support?
Answer: lobbying, campaign contributions,
petitions, letter-writing campaigns
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Political Socialization
Family
Mass Media
• Children begin learning political
beliefs from their parents and
other relatives.
• The political viewpoint of the
mass media is not always
announced directly.
• Parents may also conduct
deliberate socialization activities
such as taking a child to vote.
• Political messages become
explicit during a campaign
season.
School
Peer Groups
• Children recite the Pledge of
Allegiance every day.
• People with similar
characteristics tend to share
political beliefs.
• Students learn the political
histories of the country and of
their states.
• Economic status and age are two
of the major factors that influence
a person’s political views.
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Reading Check
Draw Conclusions
How is reciting the Pledge of Allegiance
a form of political socialization?
Answer: social norm, instills American value of
democratic government
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Simulation: Applying What You’ve Learned
There Should Be a Law!
How do special-interest groups influence the creation of laws?
1. Introduction
2. Simulation
• In this simulation, you will learn
how compromise and conflict
play a part in ensuring our laws
reflect all of society.
• Assign a moderator, a secretary,
researchers, and a presenter.
• Work in groups to write a bill
that benefits your group.
• Each group will propose their bill
to the whole class.
• Choose a special interest and
draft a bill that would benefit it.
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.
The Economy and Politics
Simulation (cont.)
3. Discussion
• What did you learn from this lab?
As a group, discuss the
following:
• How difficult was it to originate an
idea for a law?
• What do you think causes society to
rely on government to create laws
and sanctions to reflect our values?
• Do special interest groups help or
hurt the lawmaking process?
• Should the lawmaking process be
simplified? More difficult?
Original Content Copyright © Holt McDougal. Additions and changes to the original content are the responsibility of the instructor.