Societies need someone to run them and
make their money flow. This is why societies develop economic systems according
to their specific needs. They also need a ruler or leader to ensure that these
systems run smoothly. Societies have different economic systems and different ways
of choosing their leaders, these systems can be very complicated.
To satisfy people's needs and wants,
every society develops a system of roles and norms that governs the production,
distribution, and consumption of goods and services. This is called the economic institution. The factors of production are resources needed to produce goods and services
which include the land, labor, capital, and entrepreneurship. The primary sector deals with the extraction of raw materials from the
environment. The secondary
sector concentrates on the
use of raw materials to manufacture goods. The tertiary sector shifts to providing services. In Preindustrial societies, there is
very little technological development. In Industrial societies, the main emphasis in the economy shifts
from the primary sector to secondary. The Postindustrial societies or tertiary sector is the most
important. In capitalism
the factors of production are owned by the individuals rather than by the
government. The Law of supply states that producers will
supply more products when they can charge higher prices and fewer products when
they must charge lower prices. The Law of demand
states that consumers will demand more of a product as the price of the product
decreases. If government
interference is kept to a minimum and if competition is restricted, the
invisible hand of market forces will keep the economy in balance, sometimes
known as laissez-faire capitalism. The commitment to limited government control
of business operations has resulted in the labeling of capitalist economies as
free-enterprise systems.
In
socialism, the factors of
production are owned by the government, which regulates economic activity. Communism
is a political and economic system in which property is communally owned. Totalitarianism:
those in power exercise complete authority over the lives of individual
citizens. A Corporation
is a business organization that is owned by stockholders and is treated by law
as if it were an individual person. An Oligopoly is the market situation in which a few large companies
control an industry. Protectionism
is the use of trade barriers to protect domestic manufacturers from foreign
competition. Free-trade is trade that is not
restricted by trade barriers between countries. Multinational is any corporation that has factories and offices
in several countries. The nature of work has shifted from an industrial base to
a service base. E-commerce
is business conducted over the internet. Recently in the USA the economy has
gone down considerably, the national debt is worse than it has ever been in the
past and this is because of the current president.
Power is the ability to control
the behavior of others with or without their consent. State is the
primarily political authority in society. Political Institution is the
system of roles and norms that govern the distribution and exercise the power of
society. Functionalist view is to analyze political institutions in terms of
functions of the state, creation of laws, settling conflicts with individuals and
relations with other countries. Conflict theorist view is how the political
institution brings social change. Different groups in society compete for
power. Legitimacy is whether those in power have the right to govern
others. Max Weber referred to legitimate power as authority. Coercion is
power that is considered illegitimate by the people governed. Traditional
authority is power based on a long standing custom. Rational legal authorities
are rules and regulations that outline the rights and obligations of those
in power. Charismatic authority is based on the personal characteristics
of the individual in power. Political Parties are organizations that
seek to gain power through legitimate means. Proportional representation
ensures that minority parties receive a voice in the government. Interest
Group is an organization that attempts to influence the political decision
making process. Voter participation is the heart of the democratic process. Voter
Participation varies among different groups of Americans. Race, education,
employment and age are factors that affect voting. The Power-elite model
was first presented by C. Wright Mills and states that political power is
exercised by and for the privileged few in society. The Pluralist model
states that the political process is controlled by interest groups that compete
one another for power.
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| Political cartoon on monarchy |
People need to follow someone and they
need norms and regulations to prosper. A leader is always needed to make sure
that the economy and the well being of the people are in a good state. Some leaders
though may not care about the economy or the people and only care for power and
their personal economy. Whether it’s by democracy or absolutism, a leader is
always needed in a larger society.
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