Ch. 11 Student Notes-2008

Ch. 11 Student Notes-2008 - Chapter 11 Politics and the...

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Chapter 11 Politics and the Economy Henslin Chapter 11 Outline Adapted from: Fowler, L. A. (2008). Instructor’s manual for Henslin: Essentials of sociology a down-to-earth approach (7 th ed.). Boston: Allyn & Bacon. Henslin, J. M. (2007). Essentials of sociology: A down-to-earth approach (7 th ed.). Boston: Allyn I. The Transformation of Economic Systems A. An economy is a system of producing and distributing goods and services. 1. Over time, economies have become more complex and impersonal, and economic systems around the world have grown increasingly interrelated. 2. With greater surplus, social inequality has increased. B. Changes in the global economy have affected the U.S. in a number of ways. 1. With fierce global competition, many U.S. corporations are closing down or moving their operations to other countries where labor is cheaper. 2. It is common for U.S. firms to downsize and then to hire temporary replacement workers who have no job security and do not receive benefits. 3. Despite workers’ increased education, training, and productivity, the buying power of the average worker’s pay has increased by only twenty cents per hour since 1970, and the income gap between the richest and poorest Americans is the largest that it’s been in generations. II. World Economic Systems A. Capitalism , the primary economic system in the world today, has three essential features: (1) private ownership of the means of production; (2) market competition; and (3) the pursuit of profit. 1. Capitalists believe that market forces should determine both products and prices and that it is good for people to strive for profits. 2. The United States has a system of welfare capitalism in which private citizens own the means of production and pursue profits, but do so within a vast system of laws designed to protect the public welfare. B. Socialism , the world’s secondary economic system, also has three essential features: (1) the public ownership of the means of production; (2) central planning of production; and (3) the distribution of goods without a profit motive. 1. Socialism is designed to eliminate competition, to produce goods for the general welfare, and to distribute goods regardless of one’s ability to pay. 2. Socialists believe that profit is immoral because it can only be gained by paying workers less than the value of what they produce. 3.
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Ch. 11 Student Notes-2008 - Chapter 11 Politics and the...

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