Social Problems, 13eD. Stanley EitzenMaxine Baca ZinnKelly Eitzen Smith

Chapter 2Wealth and Power: The Bias of the System

Wealth and Power: The Bias of the System

CH

AP

TE

R 2

Learning Objectives

2.1 Explain the mechanisms that promote monopolistic capitalism and the consequences of each on a capitalist society.

2.2 Describe how the U.S. government is biased in favor of the wealthy.

2.3 Explain the links between wealth, power, and the U.S. political system.

2.4 Demonstrate how corporations benefit from government actions.

2.1 - U.S. Economy: Concentration of Corporate Wealth

• Monopolistic Capitalism

• Transnational Corporations

• Concentration of Wealth

LO 2.1 - Monopolistic Capitalism

• Shared monopolies

• Megamergers– The ten largest mergers in U.S. history have

occurred in the last 15 years

• Interlocking Directorates– The linkage between corporations through a

direct or indirect interlock

In addition to amusement parks, Disney has media holdings including ABC, ESPN, The Disney Channel, Hyperion Books, ABC radio, Walt Disney Pictures, Miramax Films, Buena Vista Productions, and Pixar.

LO 2.1

LO 2.1 - Transnational Corporations

• Move production to low-wage nonunion countries

• Lower foreign production costs

• Less strict labor safety and environmental protection laws

LO 2.1 - Concentration of Wealth

• Concentration of corporate wealth• Concentration of private wealth• Convergence of income tax policies

LO 2.1

© 2005 Matt Wuerker. Used with the permission of Matt Wuerker and the Cartoonist Group.

LO 2.1

LO 2.1 - Explorer Activity: The Distribution of Wealth: Characteristics of Wealth in Southern Connecticut

http://www.socialexplorer.com/pearson/plink.aspx?dest=http%3a%2f%2fwww.socialexplorer.com%2fSpiceMap%2f%3fv%3d567a62d7a3d94c32

Please log into MySocLab with your username and password before accessing this link.

LO 2.1

Interlocking directorates concentrate power and benefit companies through the __________.

A. distribution of funds

B. sharing of information

C. management of employees

D. creation of teams

LO 2.1

Interlocking directorates concentrate power and benefit companies through the __________.

A. distribution of funds

B. sharing of information

C. management of employees

D. creation of teams

LO 2.1

The largest corporations control the world’s economy.

A. True

B. False

LO 2.1

The largest corporations control the world’s economy.

A. True

B. False

2.2 - Political System: Links Between Wealth and Power

• Government by Interest Groups

• Financing of Political Campaigns

• Candidate Selection Process

LO 2.2 - Government by Interest Groups

• Are we a democracy?– Special interest groups hire lobbyists to persuade

legislators to vote their way.– At the national level, lobbying in 2011 was a $3.32

billion business.– Special interest groups violate the principle of

democracy.

LO 2.2 - Financing of Political Campaigns

• Campaign financing is undemocratic

• Campaigns are funded by candidates and special interest groups

• Contributors gain unfair access to politicians

• Bipartisan Campaign Reform Act – McCain-Feingold law

• Citizens United v. Federal Election Commission

Used with permission of Clay Bennett and the Washington Post Writers Group in conjunction with the Cartoonist Group. All rights reserved.

LO 2.2

Candidates from both political parties hobnob with the rich and famous to finance their political campaigns.

LO 2.2

In 2008, PhRMA, the pharmaceutical industry trade group, spent $200,000 on federal elections. After the Citizens United decision, it spent $9.5 million.

LO 2.2

LO 2.2 - Candidate Selection Process

• The selection of candidates is related to campaign finance

• One must have money or be able to raise money to win

• Political parties are constrained by campaign finance to nominate candidates with views aligned to those with money

LO 2.2 - Video: Politics in the United States

http://media.pearsoncmg.com/ph/hss/SSA_SHARED_MEDIA_1/sociology/videos/MSocL_Intelecom/INT_WWL_15K_003.html

LO 2.2

According to the textbook, the platforms of main political parties are similar because they both __________.

A. emerged from the same party

B. consist of educated individuals

C. need donations to run for office

D. are represented on television

LO 2.2

According to the text, the platforms of main political parties are similar because they both __________.

A. emerged from the same party

B. consist of educated individuals

C. need donations to run for office

D. are represented on television

LO 2.2

Individuals are limited in the campaign donations that they can give to individual candidates but not to PACs.

A. True

B. False

LO 2.2

Individuals are limited in the campaign donations that they can give to individual candidates but not to PACs.

A. True

B. False

2.3 - Bias of the Political System

• Power elite– Elite can use power to their advantage

• Systemic imperatives– The institutions of society are patterned to produce

prearranged results

• Power– Ability to get what one wants from someone else

LO 2.3

Systemic imperatives limit decision makers because __________.

A. no change to the status quo is easier than change

B. PACs influence the choices available

C. power is concentrated in the hands of many

D. numbers are more powerful than the wealthy

LO 2.3

Systemic imperatives limit decision makers because __________.

A. no change to the status quo is easier than change

B. PACs influence the choices available

C. power is concentrated in the hands of many

D. numbers are more powerful than the wealthy

LO 2.3

Personal wealth is the same as power.

A. True

B. False

LO 2.3

Personal wealth is the same as power.

A. True

B. False

2.4 - Consequences of Concentrated Power

• Subsidies to Big Business

• Trickle-Down Solutions

• The Powerless Bear the Burden

• Foreign Policy for Corporate Benefit

• Reprise: The Best Democracy Money Can Buy

LO 2.4 - Subsidies to Big Business

• Business can conduct its affairs either undisturbed by or encouraged by government, whichever is of greater benefit to the business community.

LO 2.4 - Trickle-Down Solutions

• Subsidizing business to benefit “everyone”– An effort to stimulate the economy

• Harms the disadvantaged:– Increases the inequality gap – Greater national debt, which then is used to justify

cutting welfare programs – Weak job growth

LO 2.4 - The Powerless Bear the Burden

• Great Recession of 2007– Where were cuts made?

• Military – Who actually got drafted?– Who serves?

LO 2.4 - Foreign Policy for Corporate Benefit

• Military goods for sale overseas• Support for foreign governments

LO 2.4 - Reprise: The Best Democracy Money Can Buy

The sabotage of democracy by money:1. It makes it harder for government to solve social

problems. 2. The have-nots of society are not represented among

the decision makers. 3. The money chase creates part-time elected officials

and full-time fundraisers. 4. Money diminishes the gap between the two major

political parties. 5. Money discourages voting and civic participation. 6. Special interests get special access to the decision

makers.

LO 2.4

The United States has supported tyrannical foreign governments when they __________.

A. change to democracy

B. enter into peace treaties

C. support U.S. corporate interests

D. are in economic trouble

LO 2.4

The United States has supported tyrannical foreign governments when they __________.

A. change to democracy

B. enter into peace treaties

C. support U.S. corporate interests

D. are in economic trouble

LO 2.4

Trickle-down economic solutions benefit the lower class the most.

A. True

B. False

LO 2.4

Trickle-down economic solutions benefit the lower class the most.

A. True

B. False

LO 2.4 Question for Discussion

Discuss the multifaceted relationship between politics and money.