Political Economy and Economic Systems

Definition of Politics

• Politics is the social institution through which power is acquired and exercised by individuals and groups.

Political Economy

• Represents the interdependent workings and interests of political and economic systems.

Economic Systems

• Major economic systems in modern societies include capitalism, socialism, and mixed economies.

Characteristics of Capitalism

• Features private ownership of production means allowing personal profits via market competition.
• Lacks government interference in economic activities.

Characteristics of Socialism

• Involves public ownership of production means and focuses on collective goals.
• Centralized decision-making process is a hallmark.

Characteristics of Mixed Economies

• Combines elements from both capitalism (market economy) and socialism (command economy).

Economic Sectors

• Main economic sectors are primary-sector (raw materials), secondary-sector (finished products), and tertiary-sector (services).

Oligopoly

• An industry situation where a few companies or suppliers dominate and control the market.

Federal Bureaucracy

• Known as the permanent government, consisting of civil service bureaucrats influential in developing and implementing policies.

Theoretical Explanations of Politics

• Functionalists adopt a pluralist model, viewing political power as widely dispersed among various interest groups.
• Conflict theorists propose an elite model, asserting that a small group holds power, leaving the majority relatively powerless.

Democracy

• A political system where ruling power rests with the people, either directly or through elected representatives.

Definition of Economy

• The social institution ensuring society's maintenance through the production, distribution, and consumption of goods and services.

Elite Model

• A perspective indicating concentrated power within a small elite group, contrasting with the powerlessness of the masses.

Gender Gap

• The disparity in voting patterns between men and women for candidates.

Military-Industrial Complex

• Describes the interdependence between military establishments and private military contractors.

Monopoly

• Occurs when a single firm commands an entire industry, controlling all sales in a specific market.

Permanent Government

• Refers to top-tier civil service bureaucrats with significant influence over policy development and implementation.

Pluralistic Model

• Portrays power as being dispersed among numerous competing interest groups within the political system.

Political Action Committees (PACs)

• Special-interest groups that financially support campaigns to influence election outcomes based on specific issue positions.

Political Party

• An organization aimed at gaining and maintaining legitimate control over the government.

Power Elite

• Comprises top rulers in the US, including business leaders, government executives, and military officials.

Primary-Sector Production

• Entails the extraction of raw materials and natural resources from the environment.

Secondary-Sector Production

• Involves the conversion of raw materials into finished goods.