Sociology
Chapter 13
The Economy and Politics
Preview
Section 1: The Economic Institution
Section 2: The Political Institution
Chapter Wrap-Up
Sociology
Chapter 13
Section 1: The Economic Institution
Read to Discover
• What are the characteristics of the
capitalist and the socialist economic
systems?
• What developments have transformed the
American economic system?
Sociology
Chapter 13
Section 1: The Economic Institution
Question
What are the similarities and
differences between capitalism and
socialism?
Sociology
Chapter 13
Section 1: The Economic Institution
ECONOMIC MODELS
Capitalism
Socialism
• factors of
production owned
by individuals
• industrial and
postindustrial
• forces of profit and
societies
competition
regulate economic
• “pure” forms
activity
are ideal types
• minimum
government
interference
• factors of
production owned
by the government
• economic activity
regulated by the
government
• pure form is
communism
Sociology
Chapter 13
Section 1: The Economic Institution
CAPITALISM:
• Factors of production—resources needed to
produce goods and services—are owned by
individuals
• Forces of profit (self-interest) and competition
regulate economic activity
• Minimal government interference; prices are
regulated by the laws of supply and demand
Sociology
Chapter 13
Section 1: The Economic Institution
SOCIALISM:
• Factors of production are owned by the
government
• Economic activity regulated by the government
and by social needs
• Pure form is communism
Sociology
Chapter 13
Section 1: The Economic Institution
BOTH:
• Exist in industrial and postindustrial societies
• “Pure” forms are ideal types
Sociology
Chapter 13
Section 1: The Economic Institution
Question
What developments
have transformed the
American economic system?
Sociology
Chapter 13
Section 1: The Economic Institution
• Rise of Corporate Capitalism—has changed the
relationship between business ownership and control
(few stockholders control businesses) and created
oligopolies
• Economic Globalization—many of the large
corporations are also multinational
• Changing Nature of Work—shift from an industrial base
to a service base due, in part, to technology
• E-Commerce—business conducted over the Internet,
which is based on information
Sociology
Chapter 13
Section 2: The Political Institution
Read to Discover
• How does the exercise of power vary by
type of government?
• What are the major characteristics of the
U.S. political system?
Sociology
Chapter 13
Section 2: The Political Institution
• Traditional Authority—power that is based on
long-standing custom
• Rational-Legal Authority—based on formal
rules and regulations
• Charismatic Authority—based on a leader’s
charisma
• Coercion—power that is considered illegitimate
by the people being governed
Sociology
Chapter 13
Section 2: The Political Institution
• Democracy—power exercised through the
people
• Monarchy—one person rules
– Constitutional Monarchy—power rests
primarily with elected officials
– Absolute Monarchy—hereditary ruler holds
absolute power
• Dictatorship—power is in the hands of a single
individual
• Junta—power has been seized by a small group
Sociology
Chapter 13
Section 2: The Political Institution
Question
What are the major characteristics of
the U.S. political system?
Sociology
Chapter 13
Section 2: The Political Institution
Major Characteristics of the
U.S. Political System
Two major
political
parties
Interest groups
and PACs
Three branches of
government
Proportional
representation
Public participation
Sociology
Chapter 13
Section 2: The Political Institution
• Dominated by two major political parties—
Democrats and Republicans
• Includes interest groups and PACs, which help
groups with minority views influence government
decisions
Sociology
Chapter 13
Section 2: The Political Institution
• Has proportional representation, but debate
exists over who holds power
• Consists of three branches of the government—
the executive, legislative, and judicial
• Includes public participation, although voter
participation varies and is relatively low overall
Sociology
Chapter 13
Chapter Wrap-Up Understanding Main Ideas
1. How do capitalism and socialism differ in terms of
ownership of the factors of production and in terms of
regulation of economic activity?
2. How has e-commerce changed the American
economy?
3. How do democratic and authoritarian governments
differ in the ways they use power?
4. What methods do interest groups and political action
committees use to win political and public support for
their issues?