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Transcript
American Political Economy 0 Political economy = interaction between economy and government; state and markets 0 Democratic political system/capitalist economic system 0 Capitalism = capital is privately owned and controlled/business decisions driven by profits 0 Markets = decentralized and “self-regulating” 0 Never wholly free or self-regulating 0 Require rules, regulation by government Market Capitalism 0 Promotes efficiency, productivity 0 Externalities (socializing cost; privatizing gain) 0 Contradiction between private interests and community (public) interests 0 Expansion/growth and ecological crisis 0 Instability (recession, depression, unemployment, inflation); boom and busts (cycles) 0 Undemocratic US Market Capitalism 0 Markets freer, less regulated 0 Corporate capitalism = small unrepresentative, unelected group controls economy, possesses immense political power 0 Whether to invest, where to invest, what to invest in, and how to produce 0 Campaign contributions, lobbyists, lawyers, media 0 Private government = fundamental impact on people’s lives and communities 0 Considered nonpolitical, private (not political) 0 Enormous pressure to offer inducements to business 0 Mobilization of bias = political advantage business enjoys due to economic power 0 Not all-powerful (competing interests; democratic politics) Changing Landscape 0 Structure of American economy has changed 0 Competition intensified due to globalization and technological innovation 0 Mergers have created huge corporations 0 Production more concentrated, control more centralized in fewer hands 0 Threat to democracy = concentration of economic power tends to promote concentration of political power Who Owns Private Government? 0 “Share-holder” democracy? 0 Half of households do NOT own stock 0 Wealthiest 1%, 37% 0 Next wealthiest 9%, next 42% 0 10% of households own 80% of stock 0 Corporate elite = white and male 0 Capitalist class cohesion 0 Social clubs, interest groups/peak associations, corporate boards 0 Small group (vast income and wealth) own America’s private government, situated to shape political system to serve their interests Changing Employment 0 Industrial occupational order (blue-collar factory jobs) replaced by postindustrial order (professionals, service employees, and white-collar workers) 0 Good and bad jobs grew at expense of middle; huge growth in financial sector 0 Service and sales jobs poorly paid, few benefits, require menial and routine labor, and rarely union protection 0 Income inequality in U.S. 0 Top 20% captured 50% of all income; bottom 20% got 3.4% (2007) 0 Political choices shape inequality 0 Markets generate inequality, pay unskilled labor with povertylevel wages unless checked by political/public forces 0 In U.S. these forces weak = labor movement tiny; parties skewed to the right; government unresponsive to interests of low-income groups Extreme Market Capitalism 0 Public sector quite small 0 Public employees only 15% of workforce 0 Low proportion of GDP collected in taxes 0 Government spending as share of GDP low 0 Few public services 0 Few constraints on business firms 0 Government regulation of workplace thin 0 Lowest proportion of unionized employees of any industrialized democracy 0 Helps account for income inequality 0 Caused by: failure to unionize in South; restrictive labor legislation placed obstacles in way of union-organizing; opposition to unions by corporations 0 Supercapitalism = roles as consumers and producers increased at expense of importance of public sphere and role as citizens Capitalist Instability/Crisis 0 Great Recession (2007-present) 0 High unemployment – hardest on low income groups 0 Decline in stock market – now booming again 0 Bursting of housing bubble 0 Three time bombs: Sub-prime mortgages, Leverage, Securitization 0 Government’s “hands-off” relationship to capitalism shelved when system in jeopardy 0 Socialism for the rich, capitalism for the poor = losses socialized and profits privatized (Stiglitz) 0 Key question: Will huge public monies used to shore up financial system be followed by reforms to minimize chance of a similar future crisis? Answer = NO!