copyright © 2012 pearson education, inc. all rights reserved. growth of corporate & government...

Copyright © 2012 Pearson Education, Inc. All rights reserved.

Chapter 2Growth of Growth of

Corporate & Corporate & Government Government

PowerPower

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Myth or Fact?Myth or Fact?

The economy of the The economy of the U.S. represents a U.S. represents a pure form of pure form of capitalism.capitalism.

The primary The primary motivation of motivation of corporations is to turn corporations is to turn a profit and to ensure a profit and to ensure corporate growth.corporate growth.

Myth Fact


Types of Economic SystemsTypes of Economic Systems

Capitalism refers to a system where:Capitalism refers to a system where: the means of production and distribution are the means of production and distribution are

privately heldprivately held the profit motive is the primary force guiding the profit motive is the primary force guiding

people’s economic behaviorpeople’s economic behavior there is free competition among both producers there is free competition among both producers

and consumers of goodsand consumers of goods and there is minimal government interventionand there is minimal government intervention


Types of EconomicTypes of EconomicSystems Systems

Socialism refers to economies in which:Socialism refers to economies in which: the means of production and distribution are the means of production and distribution are

collectively held collectively held the goods and services that people need are the goods and services that people need are

provided and equitably distributedprovided and equitably distributed and there is a central means of controland there is a central means of control


Types of EconomicTypes of EconomicSystems Systems

Communism refers to economies in which:Communism refers to economies in which: all goods are communally ownedall goods are communally owned people would not work for wages but would give people would not work for wages but would give

according to their abilitiesaccording to their abilities and there would be no scarcity of goods and and there would be no scarcity of goods and

servicesservices the state would become less important and its the state would become less important and its

role would dwindlerole would dwindle


Mixed EconomiesMixed Economies

Mixed economies are where there is a Mixed economies are where there is a strong element of both capitalism and strong element of both capitalism and socialism.socialism. Most industry is privately owned and oriented Most industry is privately owned and oriented

toward profit making; however many toward profit making; however many important industries may be state owned.important industries may be state owned.


The Corporate EconomyThe Corporate Economy Factors that distinguish corporations from Factors that distinguish corporations from

individually owned businessesindividually owned businesses Corporations have access to much broader Corporations have access to much broader

source of capital than do individualssource of capital than do individuals Stockholders, who own the corporation, have Stockholders, who own the corporation, have

only limited liability should the corporation be only limited liability should the corporation be sued or go bankruptsued or go bankrupt

The ownership of corporations is separate from The ownership of corporations is separate from the control of its policies and daily affairsthe control of its policies and daily affairs


Forms of Corporate GrowthForms of Corporate Growth

MonopoliesMonopolies

OligopoliesOligopolies

ConglomeratesConglomerates

Multinational corporationsMultinational corporations

Global corporationsGlobal corporations



MonopolyMonopoly: the exclusive control of a : the exclusive control of a commodity or service by a single companycommodity or service by a single company

OligopolyOligopoly: the control of a commodity or : the control of a commodity or service by a small number of companiesservice by a small number of companies

ConglomerateConglomerate: a corporation formed by the : a corporation formed by the merger or acquisition of a number of merger or acquisition of a number of diversified industriesdiversified industries



Multinational Corporations:Multinational Corporations:

Global Corporations:Global Corporations:


UnionizationUnionization

The number and size of unions has grown The number and size of unions has grown over the past century, but they have declined over the past century, but they have declined some over the last few decades.some over the last few decades.

The decline in unionization is due:The decline in unionization is due: to a decline in the number of blue-collar jobsto a decline in the number of blue-collar jobs to many companies relocating to states with to many companies relocating to states with

weak unionsweak unions to active opposition to unionization by employersto active opposition to unionization by employers to unions facing increasing hostility from the to unions facing increasing hostility from the

publicpublic


The The Functionalist Functionalist PerspectivePerspective

Big government and Big government and big business are big business are problems because they problems because they can lead to policies and can lead to policies and practices that are practices that are inconsistent with inconsistent with cultural values and cultural values and political and economic political and economic reality. reality.

The concentration of The concentration of power becomes a power becomes a social problem when social problem when some influential group some influential group believes that it is not believes that it is not receiving its fair share receiving its fair share of resources and of resources and strives to do something strives to do something about it.about it.

The The Conflict Conflict

PerspectivePerspective


Is There a Power Elite Is There a Power Elite in the U.S.?in the U.S.?

The Power Elite Model The Power Elite Model Argues that there exists a small group of very Argues that there exists a small group of very

powerful people who make just about all the powerful people who make just about all the important decisions in the U. S.important decisions in the U. S.

The power elite is a cohesive group, and the The power elite is a cohesive group, and the interests of its various members in the interests of its various members in the government, military, and corporate sectors tend government, military, and corporate sectors tend to coincideto coincide


Is There a Power Elite Is There a Power Elite in the U.S.?in the U.S.?

The Pluralist Model The Pluralist Model Views power as pluralistic, or spread over a Views power as pluralistic, or spread over a

large number of groups with divergent values, large number of groups with divergent values, interests and goalsinterests and goals

With the vote, the public can exercise some With the vote, the public can exercise some constraint over the behavior of those in powerconstraint over the behavior of those in power


The World Economic SystemThe World Economic System

World Systems Theory World Systems Theory Posits that the world’s nations have become Posits that the world’s nations have become

increasingly interdependent and are now linked increasingly interdependent and are now linked in a worldwide system where some nations have in a worldwide system where some nations have more power than others. more power than others.

This network of nations includes core nations, This network of nations includes core nations, peripheral nations, and semi-peripheral nations. peripheral nations, and semi-peripheral nations.


Problems with the Problems with the Concentration of PowerConcentration of Power

The concentration of power creates many The concentration of power creates many problems for society including:problems for society including: a reduction in economic competitiona reduction in economic competition the dominance of corporate profit-making goals the dominance of corporate profit-making goals

over societal goalsover societal goals threats to democratic institutionsthreats to democratic institutions the dwindling of unionsthe dwindling of unions worker dislocation and unemploymentworker dislocation and unemployment abuse of government authorityabuse of government authority


Future ProspectsFuture Prospects Alleviating problems related to power Alleviating problems related to power

include:include: reducing the size of the government and budget reducing the size of the government and budget

deficitsdeficits reorganizing government so that abuses are less reorganizing government so that abuses are less

likelylikely encouraging action by citizens that serve as a encouraging action by citizens that serve as a

counterbalance to government and corporate powercounterbalance to government and corporate power globalizing the labor force and establishing labor globalizing the labor force and establishing labor

rightsrights reorganizing the economy to reduce worker reorganizing the economy to reduce worker

exploitation and unemploymentexploitation and unemployment

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