14-1

Richard T. Schaefer

SOCIOLOGY:
A Brief Introduction
Seventh Edition

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 chapter
14
Government and the Economy
CHAPTER OUTLINE
•Economic Systems
•Case Study: Capitalism in China
•Power and Authority
•Political Behavior in the United States
•Models of Power Structure in the United States
•War and Peace
•The Changing Economy
•Social Policy and the Economy: Global Offshoring
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 14-3

A Look Ahead
█ How does the power elite maintain
its power?
█ Is war necessary in settling
international disputes?
█ How have the trends toward
deindustrialization and the outsourcing
of service jobs affected our economy?

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-4

Economic Systems
█ A society’s system for producing,
distributing, and consuming goods and
services will depend on its level of
development and its political ideology
– Industrial society: society that depends
on mechanization to produce its goods
and services

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-5

Capitalism
█ Economic system in which the means of
production are held largely in private
hands
– Main incentive for economic activity is
accumulation of profits
– Laissez-faire: businesses compete with
minimal government intervention
– Monopoly: exists when a single firm
controls the market
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 14-6

Socialism
█ Means of production and distribution
owned collectively rather than privately
owned
– Communism: economic system under
which all property is communally owned
and no social distinctions are made on
the basis of people’s ability to produce

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-7

Informal Economy
█ The transfer of money, goods, or services
is not reported to the government, i.e., a
haircut in exchange for a computer lesson
– Difficult to measure
– In developing nations, informal economy
represents significant part of total
economic activity

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-8

Table 14-1 Characteristics of

the Three Major
Economic Systems
Economic Contemporary
System Characteristics Examples

Capitalism Private ownership of the means Canada

production Mexico
Accumulation of profits the main United States
incentive
Socialism Collective ownership of the means Germany
of production Russia
Meeting people’s needs the basic Sweden
objective
Communism Communal ownership of all property Cuba
No social distinctions made on basis North Korea
of peoples’ ability to produce Vietnam
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 14-9

Case Study:
Capitalism in China
█ China stands on the brink of becoming the
world’s largest economy
– Chinese more interested in acquiring the latest
consumer goods
– Communist Party officials’ decision to open
China’s economy to capitalism reduced the
once omnipotent institution’s influence

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-10

The Road to Capitalism

█ The Communist party assumed control of
China in 1949, outlawing individual profit-
making
█ By the 1960s, China’s economy dominated

by state-controlled enterprises
█ From the late 1980s to the mid 1990’s,

China’s government slowly eased

restrictions against private enterprise

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-11

The Chinese Economy Today

█ The growing free-market economy has
brought significant inequality to Chinese
workers
█ Chinese capitalists now have to compete
with multinational corporations
█ In 2003, GM’s Chinese operation was

producing 110,000 automobiles a year for

Chinese consumers
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 14-12

Chinese Workers
in the New Economy
█ Loosening state control led to rise in job
mobility, increased opportunity, and
prosperity for family-owned businesses
– Struggles include a lag between urban and
rural salaries and worker safety

China requires Google, Yahoo, Microsoft, and

Cisco Systems to alter search engines and
blogging tools to block unapproved Web sites

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-13

Figure 14-1: World’s Largest

Economies, 2020 (Forecast)

Source: The Economist 2006.

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 14-14

Power
█ Ability to exercise one’s will over others
█ Sources of power in political systems
include:
– Force: actual or threatened use of coercion
to impose one’s political dissidents
– Influence: exercise of power through a
process of persuasion
– Authority

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-15

Types of Authority
█ Authority: institutionalized power
recognized by people over whom it is
exercised
█ Max Weber ([1913] 1947) developed
classification system for authority

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-16

Types of Authority
█ Traditional authority: legitimate power
conferred by custom and accepted
practice
█ Legal-rational authority: power is made
legitimate by law
█ Charismatic authority: power is made

legitimate by leader’s exceptional personal

or emotional appeal to his or her followers
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 14-17

Types of Government
█ Monarchy: form of government headed
by a single member of a royal family
█ Oligarchy: form of government in which a
few individuals rule

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-18

Types of Government
█ Dictatorship and Totalitarianism
– Dictatorship: Government in which one
person has nearly total power to make and
enforce laws
– Totalitarianism: involves virtually complete
government control and surveillance over all
aspects of a society’s social and political life

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-19

Types of Government
█ Democracy
– Government by the people
– Representative democracy: elected
members of legislatures make laws
– U.S. is a representative democracy, but critics
question how representative our democracy
really is

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-20

Participation and Apathy

█ In U.S., only small minority of citizens,
often members of the higher social
classes, participate in political
organizations on local or national level
– Less than 20% ever contacted an official of
national, state, or local government about a
political issue or problem

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-21

Figure 14-2:
Voter Turnout Worldwide

Source: International Institute for Democracy and Electoral Assistance 2005.

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-22

Race and Gender in Politics

█ In U.S., political strength is lacking in
marginalized groups, such as women and
racial and ethnic minorities
– Female politicians may be enjoying
more electoral success but there is
evidence the media cover them
differently from male politicians

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-23

Figure 14-3: Women in National

Legislatures, Selected Countries,
2006

Source: Inter-Parliamentary Union 2006.

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 14-24

Power Elite Models

█ Mills’ Model
– Power elite: small ruling elite of military,
industrial, and governmental leaders
– Power rested in the hands of a few,
inside and outside of government
– Mostly male, white, and upper class

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-25

Power Elite Models

█ Domhoff’s Model
– Stresses roles played by elites of
corporate community and leaders of
policy-formation organizations such as:
• Chambers of Commerce
• Labor unions

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-26

Power Elite Models

█ Pluralist Model
– Competing groups within the community
have access to government, so no
single group can dominate
– Variety of groups play significant roles in
decision making

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-27

Figure 14-4: Power Elite Models

Source: Left, author based on C. W. Mills [1956] 2000; right, Domhoff 2006:105.

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-28

War and Peace

█ Global view studies how and why nations
become engaged in military conflict
█ Nation-state view stresses the interaction
of internal political, socioeconomic, and
cultural forces
█ Micro view focuses on the social impact of

war on individuals and their groups

– Public opinion plays major role
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 14-29

War and Peace

█ Peace: absence of war and proactive
effort to develop cooperative relations
among nations
█ Terrorism: use or threat of violence
against random or symbolic targets in
pursuit of political aims
Since September 11, 2001 governments around
the world renewed their efforts to fight terrorism

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-30

Figure 14-5: U.S. Public Opinion

on the Necessity of War,
1971-2004

Source: Acora 2004.

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-31

Figure 14-6: The Global Reach

of Terrorism

Source: National Geographic 2005:17.

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 14-32

The Changing Face

of the Workface
█ Sociologists and labor specialists foresee
a workforce increasingly composed of
women and racial and ethnic minorities
– From 1984 to 2014, 54% of new workers
expected to be women
– The workforce also will reflect the diversity of
the population, as ethnic minorities join the
labor force

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-33

Deindustrialization
█ Systematic, widespread withdrawal of
investment in basic aspects of productivity
– Can take the form of corporate restructuring
– Downsizing: reductions taken in a company’s
workforce as part of deindustrialization

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-34

Global Offshoring
█ The Issue
– Offshoring is process of transferring types of
work to foreign contractors
– It is global and effects people all over
the world

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-35

Global Offshoring
█ The Setting
– Offshoring began when U.S. companies
transferred manufacturing jobs to foreign
factories where wage rates were much lower
– No longer limited to manufacturing

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-36

Global Offshoring
█ Sociological Insights
– Offshoring can improve efficiency of
business so it can be viewed as
functional to society
– Conflict theorists question whether
offshoring furthers global inequality
– Long-term impact of offshoring on India
and developing countries hard to predict

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 14-37

Global Offshoring
█ Policy Initiatives
– Offshoring a political flashpoint in 2004
presidential election
– Most policy makers see offshoring
as part of the “natural” process
of globalization

© 2008 The McGraw-Hill Companies, Inc. All rights reserved.