Sociology Lesson 11

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Defining government & economy
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A social institution is a pattern of norms centered around a major goal, value, or need of society. Social institutions provide stability and consistency in society and help regulate human behavior. Social institutions are important social groups in which an individual participates, which strongly influence the development of each individual in society through the socialization process. The government and the economy are two universal social institutions. People are socialized within a family and during their education, two other important social institutions. Inequality in income and access to government services make generalizations about these social institutions more difficult. Looking at the chart, you see that much of the world lives on less than $2 per day which equals $730 per yr. On the other hand, the poverty line in the United States for a single person is $9,645, about $26 per day. About 12% of people in the United States live at or below the \”threshold of poverty.\”
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Types of economic systems
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There are three basic types of economic systems. Since the economic and political system of any country are so intertwined, these three systems can be referred to as political systems as well: capitalism, socialism, & communism.
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Capitalism
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Economic System: Capitalism Means of Production and Distribution: Privately Owned Primary Goal: Profits An economic system in which the means of production are largely in private hands, & the main incentive for economic activity is the accumulation of profits
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Socialism
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Economic System: Socialism Means of Production and Distribution: Collectively owned Primary Goal: Meeting people’s needs An economic system under which the means of production & distribution are collectively owned
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Communism
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Economic System: Communism Means of Production and Distribution: Communally owned Primary Goal: Meeting all people’s needs equally As an ideal type, an economic system under which all property is communally owned & no social distinctions are made on the basis of people’s ability to produce
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Mixed economic systems
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Remember Max Weber and his \”ideal type?\” In reality, none of these economic systems works exactly as defined. For example, Medicare and Medicaid are examples of socialistic programs that try to meet people’s needs within a capitalistic society. An ideal socialist country would finance health care for all of its citizens. In many socialist economies, the Communist party controls political power. However, in almost all socialist countries, some degree of capitalism is both tolerated and encouraged. For example, in modern China, 25% of its wealth is derived from the private sector.
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The US economy
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The U.S. has the largest and most technologically powerful economy in the world, with a per capita gross domestic product (GDP) of $40,100. This means that if you added up all of the goods and services produced in the United States in any year ($11.75 trillion) and divided it by the number of people who live in the United States, each person’s share would be approximately $40,000. GDP (2004 est): $11.75 trillion US POPULATION (July 2005 est): 295,734,134 = $40,100 In the United States’ market-oriented economy, private individuals and business firms make most of the decisions, and the federal and state governments buy needed goods and services predominantly in the private marketplace.
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The downside of US capitalism
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Long-term problems for the American economy include inadequate investment in economic infrastructure, rapidly rising medical and pension costs of an aging population, sizable trade and budget deficits, and stagnation of family income in the lower economic groups. For example, since 1975, practically all the gains in household income have gone to the top 20% of households.
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The informal economy
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Most businesses and individuals report their income to the U.S. government so that taxes can be collected. However, there is also an informal economy in most countries, and the United States is no exception. An informal economy consists of goods and services transferred as cash or in some other way that is not reported to the government. People can also barter—trading one service for another. This is also part of the informal economy. Why does an informal economy exist? Some say it is because there are too many government rules and regulations. Others want to avoid taxes.
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Informal economy
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Transactions involving cash, goods, or services not reported to the government
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Power & politics
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Now that we’ve discussed economic systems, it is time to look at who gets to exercise the power that comes with wealth and status. Political scientist Harold Laswell described politics as \”who gets what, when, and how.\” Power is the ability to influence the thoughts or behavior of others. The political institution of a society determines who should hold power and the process for achieving power. There are two main types of political power: legitimate & charismatic power
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Legitimate power
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Legal norms or tradition
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Charismatic power
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A person without formal authority who has the uncommon ability to influence people & ideas
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Authority
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Power that has been institutionalized & is recognized by the people over whom it is exercised Institutionalized power that people recognize In Europe, traditional authority was exercised because of the people’s belief in \”the divine right of kings\” People allow authorities to exercise power over them because they accept tradition, accept laws or regulations, or believe in a charismatic leader
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Force
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Imposing one’s will on another
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Influence
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Persuading someone to take action
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Power elite models
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Karl Marx, C. Wright Mills, and G. William Domhoff each had their own theories about the ‘power elite’ and what roles they serve in various power structures.
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Karl Marx
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Representative democracy is a sham Society is ruled by a small group (the elite) who share common political & economic goals
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C. Wright Mills
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The power elite is composed of a small group of military, industrial, & government leaders This group exercises power with the economically powerful in ultimate control Triangle from bottom to top: – Unorganized, exploited masses – Interest group leaders, legislators, local opinion leaders – Corporate rich, executive branch, military leaders
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G. William Domhoff
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While G. William Domhoff agrees with Mills that a powerful elite, composed of people that are still largely white, male, and upper class, runs the U.S., he stresses that there are distinct roles within the power elite. One is that of the corporate community and the other is the role played by leaders of policy-formation organizations like chambers of commerce and labor unions. He points out that even though many of the people in both groups are also members of the social upper class, they do not necessarily agree on certain matters of public policy. Domhoff asserts that there are two principal divisions among the power elite: the corporate-conservative coalition and the liberal-labor coalition. The power elite is a mixture between social upper class, corporate community, & policy-formation organizations
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Pluralist model
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The pluralist model Pluralist model is based on the idea that a variety of conflicting groups within a community participate in decision-making, with one person or group controlling one aspect of society and other people exerting power in other aspects. Criticism of the pluralist model includes the exclusion of minority groups in most decision-making, and the ability of those in power to control the political agenda and make decisions without allowing public debate. A view of society in which many competing groups within the community have access to government so that no single group is dominant
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War: the ultimate test of power
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According to the Functionalist perspective, the political institution in the U.S. has several important functions: – Planning & financing of social norms such as basic services in health, education, & welfare (legislative branch) – Enforcement of social norms through executing laws (executive branch) – Resolution of conflicts among segments of society (judicial branch) – Protecting its citizens from outside enemies (military component) War is a military conflict using lethal weapons. A war is declared by a government, but public opinion impacts the decision about whether a war is the best means to resolve disputes. Conflict theorists say the government serves the needs of a few groups which impose their values and stratification system on other groups through violence and oppression.
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Deindustrialization
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Sociologists advocating that a small elite group controls the political and economic power point out that capitalist societies like the U.S. tend to grant power to giant, multinational corporations. Sociologists are interested in two areas related to economic and political power: 1) the growth of ethnic minorities and women in the workforce, and 2) deindustrialization. What is deindustrialization? This is defined as the systematic, widespread withdrawal of investment in the basic structures of productivity—factories and plants. The giant, multinational corporations have moved from urban centers—first to the suburbs and then to other nations where the labor is cheaper. Many communities depend on one large factory for employment. When that company downsizes and relocates, a community can be devastated. High-paying factory jobs and the management jobs that go with them are difficult if not impossible to replace. This leads to widespread unemployment.
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World population growth
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(image)
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Environmental concerns
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It is not just people who are affected by political and economic decisions. The environment is also impacted. Throughout the world, people are concerned about four main environmental issues: – Air pollution: the World Health Organization estimates that there are 700,000 preventable deaths each year due to air pollution – Water pollution: over one billion people worldwide lack safe & adequate drinking water – Population growth: malnutrition is the largest contributor to illness in death in developing countries, where almost 18% of children will die before age 5 – Land contamination: agricultural & technological innovations produce environmental toxins, which damage the soil’s ability to sustain crops over the long term
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Population & the environment
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The Reverend Thomas Robert Malthus (1766-1834) published essays on the principles of population in 1798. The famous Malthusian theory discussed that while the world population was increasing by geometrical proportions, the food supply was increasing by arithmetical progressions. At the time that Robert Malthus proposed this theory, the world’s population was at the limit to what the agricultural sector could support. Looking at more recent population figures, can you understand why there are \”neo-Malthusians\” who agree with Malthus’ original theory? Increases in agricultural production and stabilization of world population growth have avoided some of Malthus’ catastrophic predictions. However, the increased use of herbicides and pesticides to promote growth of agricultural products has created other environmental problems.
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Summary
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The economic and political social institutions are highly intertwined and decisions made in both areas have a strong impact on the environment. There is both a formal and an informal economy. The United States has a capitalistic economy and a democratic political system. There are three primary types of economic systems: capitalism, socialism, and communism. However, these are ideal types and in actuality, most systems are combinations of socialism and capitalism. Functional theorists propose the following as the recognized functions of political institutions: • Enforcement of social norms through laws (government’s legislative branch). • Resolution of conflicts among segments of society. • Planning and financing of basic services in health, education, and welfare. • Protecting its citizens from outside enemies. Conflict theorists say the government serves the needs of a few groups (which impose their values and stratification system on other groups through violence and oppression). There are three types of power: force, influence, and authority. Much of the world’s power is concentrated within the power elite: corporations and governments that control the methods of production and distribution. The other model of power is called the pluralistic model, where decision-making is diffused among several groups. Authority can also be divided into three types: tradition, laws and regulations, and charismatic. The environment is impacted greatly by economic and political decision-makers. Air pollution, water pollution, land contamination, and population growth are all worldwide environmental concerns. Malthus’ theory said that population grows geometrically, while the food supply grows arithmetically. The world’s population is still growing, but declining fertility rates have caused it to stabilize in the past few decades.
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Socialism
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I serve as an ideal type of economic system. I attempt to eliminate economic exploitation. I am an economic system under which the means of production and distribution in a society are collectively rather than privately owned.
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Communism
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In recent decades, Vietnam and Cuba have been thought of as examples of me. I am often associated with the name of Karl Marx. I am an economic system under which all property is communally owned and no social distinction are made on the basis of people’s ability to reproduce.
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Authority
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Weber developed a classification system of me that has become one of the most useful and frequently cited contributions of early sociology. Sociologists commonly use me to refer to those who hold legitimate power through publicly acknowledged elected positions. I refer to institutionalized power that is recognized by the people over whom it is exercised.
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Power elite model
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I am, in many respects, similar to the work of Karl Marx. I am associated with the name of C. Wright Mills. I am a view of society which argues that power rests in the hands of a few, both inside and outside government.
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Pluralist model
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I have been criticized for failing to account for the exclusion of African-Americans from the political process. I suggest that a variety of groups play a significant role in decision making. I am a view of society in which many competing groups within the community have access to government, so that no single group is dominant.
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Political system
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The social institution that relies on a recognized set of procedures for implementing & achieving the goals of a group
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Politics
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In Harold D. Lasswell’s words, \”who gets what, when, & how\”
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Economic system
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The social institution through which goods & services are produced, distributed, & consumed

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