Politics and the Economy

Politics and the Economy


So this week we’re talking about the
economy and politics and specifically you’re going to be watching some films
that talk about the intersection of these two entities. But, before we get
started, I want to go through a few definitions and apply some sociological
theory. The economy is the area within society that determines how it produces,
distributes, and consumes goods and services. So, within the film, “Panic”, we
were specifically taking a look at this process, as it relates to housing in the
United States. Politics, on the other hand, are defined as those individuals and
groups that acquire and exercise power and authority and make decisions. It’s
important to recognize that political systems, as well as economic ones, differ
from country to country and those differences tend to focus around factors
such as globalization and technology. Before we move on to the next
section of our lecture, we need to take a moment and review the sociological
perspectives as it relates to the economy. When we’re looking at
functionalism, functionalism typically emphasizes the benefits of work in the
economy. Functionalists will also see capitalism as bringing prosperity to
society as a whole. Now, critics will point out that work is a significant
source of stress and U.S. corporations are not interested in their workers’
well-being. In the private sector, thirty percent of full timers and 74% of
part-timers don’t have paid sick days. Even when business improves, many
employers will convert full-time jobs to part-time or temporary positions and cut
health benefits. According to conflict theory, capitalism creates social
problems. Globalization has led to job insecurity and a handful of
transnational conglomerates have enormous power. We’ll define transnational
conglomerates in the next section. For conflict theorists low wages alienate
employees rather than motivate them to work harder. They also argue that
capitalism enables the rich and powerful to exploit
other groups, resulting in huge disparities. A critical evaluation of
this theory faults the theory for emphasizing economic constraints, rather
than choices, and under-estimating people’s ability to get ahead in. In feminist theory, the scholars here agree with conflict theorists that there’s
widespread workplace inequality but, as you might suspect, they’re going to
emphasize gender as a critical factor. Across all levels and occupations, women,
especially Latinas and Black women, earn less than men. Both historically and
currently, women have lower earners, I’m sorry, lower earnings than men, because of occupational sex segregation (which we’ve talked about recently, as
well as glass ceilings and glass escalators). Women make up less than half
of the labor force but hold more than two-thirds of all the low-wage jobs. Many
women’s earnings suffer from that motherhood penalty that we talked about
when we reviewed gender and sexuality. Critics of feminist theory, here, note
that men don’t always dominate women in the workplace and that there’s
considerable gender inequality in socialist, communist, and mixed economies…
not just capitalist ones. And they question whether the economy reinforces
sex discrimination or simply reflects cultural sexism. The last theory we’ll
look is symbolic interactionism. Symbolic interactionists are especially
interested in how work shapes people’s self-identity. Remember: this is a micro-
analysis perspective. Interactionists also study how people are socialized
into their jobs and the informal rules that shape behavior. We talked about all
of this when we talked about groups and leadership styles. Critics of this
particular theory include that symbolic interactionism provides in-depth
analysis but lacks scope, as findings in small groups may not be applicable to
large groups or companies. Another limitation is that interactionism,
of course, does not take a look at macro-level social forces. There are four
different types of economic systems so let’s go through each one of those. Capitalism is the first economic system
we’ll look at. In capitalism, The dreaded socialism: This
is the next economic system we’ll talk about. Socialism is based on the public
ownership of the production of goods and services. So, ideally, within this
particular system, there’s a collective ownership of property. Here, everyone’s
gonna work together instead of competing against one another and while we’re
working together we’re working for the greater good. Within socialism, there is
no profit motive. Competition and individual profits are actually
officially forbidden… Although we will often see that certain groups are in a
position to enjoy (quote unquote) “more” than the larger society. The primary
difference between socialism and communism is that socialism allows for
some free market. This isn’t the case with communism. This political and
economic system is one where property is communally owned and all people are
considered equal. That is, people receive resources based on their need and
there’s no motivation for working hard. Historians have said that communism has
failed for multiple reasons but some of these reasons include things like
widespread corruption, oppression, and just the overall economic inefficiency
that’s resulted in shortages of foods and goods within the society. The last
economic system that we’ll talk about is called the mixed economy. This is what we
see here in the United States and there’s a few different forms of this. The first is called “welfare capitalism”. Welfare capitalism is what you get when
there’s a combination of private ownership of property, market competition,
and government regulation of programs and services. The second type is called “crony capitalism”. Crony capitalism is based on
those close relationships between the business and political classes. This is
what we see when the cumulative resources are amassed between the two. So,
think about a few weeks back, when I talked about those folks who work in the
higher… higher levels of administration and government, military, and business. They retire from one sector and they move to another and they take all of
those resources with them and are in a position to capitalize on them. This is a
form of crony capitalism. Within this particular economic system, the
government will provide tax breaks, subsidies, and grants to wealthy people
in large corporations, often at the cost of those in the lower socioeconomic
status arenas. It’s important to note here that large companies drive both
capitalism and mixed economies Again, we saw this play out in the film, “Panic”. Corporations in particular yield enormous amounts of influence both in
their home country, as well as in those countries where they have additional
sites set up. Let’s take a few minutes to talk about corporations. Corporations are
those organizations that have legal rights, privileges, and liabilities apart
from those of its employees and administration. In the U.S., there are
almost six million corporations that exist. But just one-half of 1% make 90
percent of all of the corporate income that’s generated. So how does that happen? Well, most of the time, this happens
because the corporation is actually a conglomerate. A conglomerate is a
corporation that owns a collection of companies in different industries. So
think… Colony Brands: Colony Brands, most of you may know, is a small cheese
company also known as Swiss Colony Brand in Monroe, Wisconsin. But, in reality,
through a series of acquisitions and mergers Colony Brands now also owns Montgomery Ward, 7th Avenue, and HomeGoods. They diversified their
business risk by participating in different markets, thereby increasing
their sustainability and longevity. I think oftentimes students get this idea
of a conglomerate confused with what we what is actually known as a
transnational corporation. A conglomerate is not necessarily a corporation that
operates overseas. A transnational corporation, however, is. A transnational
corporation is a large company based in one country that operates across
international boundaries. So think for example: McDonald’s. Now, there is such
thing as a transnational conglomerate and that owns a collection of different
companies, in various industries, in a number of countries. So here think: GE.
General Electric is the biggest transnational conglomerate, getting close
to a monopoly. So close, in fact, are they to being (quote) “too big to fail”, that just
eight years ago, they were forced to sell off the railroad division… or at least
large chunks of it because of their size. The last concept I want to talk about, as
it relates to corporations, is that of interlocking directorates. An
interlocking directorate is what happens when the same people serve on the boards
of several companies or corporations across industry and across sectors. What
tends to happen is these individuals then develop a similar economic
perspective. You guys remember the concept of groupthink? Because that’s
what we’re talking about here. It’s seen at every level of politics, economics, and
the government. With interlocking directorates, approximately 15 to 20
percent of the participants sit on two or more boards and are more likely to be
put on a government advisory board. Some of these directorates are especially
powerful because they include people like past US presidents, members of
Congress, who provide quite strong connections to Washington DC. Once they are able to sit on these boards, they’re now in a position to
impact both the economy and the national agenda. In the last section of this
lecture, we’re going to take a look at the various forms of government and the
sociological perspectives associated therein. So let’s start with what is
government. Generally speaking, government is defined as “a formal organization that
has the authority to make and enforce laws within a society”. There are certain
universals, regardless of the type of government that exists within a culture
that are associated with governments. So governments are expected to maintain
order, provide social services, regulate the economy, establish educational
systems, create armed forces for defense, and ensure their residents’ safety. Political systems vary in their type as
well as the political freedom associated with that type. In a democracy, citizens
control the state and its actions. Principles within a democracy include:
individuals are able to participate in decisions and select responsive leaders;
the right to vote is open to everyone with free, fair, frequent, and secret
elections; the government recognizes individual rights and the rule of law
requires everyone to obey the law and be accountable for any violations of the
law. If democracy is on one end of a scale for political systems, totalitarianism is on the other end. In a totalitarian government, the government
controls every aspect of a person’s life. Secret police are present and the
military intimidate people into conformity. Somewhere in the middle of
this continuum would be authoritarianism. An authoritarian government is one where
the state controls the lives of its citizens but permits some degree of
individual freedom. A monarchy is completely different. A monarchy is what happens when power is based on heredity. The power is
legitimized by both tradition and religion. In the interest of time, I’m not
going to go through this particular chart but you can read through the
information associated with it in your textbook or download the PowerPoint
that’s in Moodle to take a look at the speaker notes for this slide. Ok! That wraps up the abbreviated lecture for this week. Make sure you watch the remaining videos before you complete the assignment
that’s going to be due on Sunday by 11:59 p.m. You guys have a great weekend
and I’ll see you next week.

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