SOCI 1090 Chapter 2: Ch 2: Wealth and Power: The Bias of the System

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6 Feb 2017

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Chapter 2: Wealth and Power: The Bias of the System
Maldistribution of wealth and power causes most of the problems
Few benefit at the expense of many
2.1: U.S. Economy: Concentration of Corporate Wealth
Reality: not based on equal competitions but finished by huge corporations
Monopolistic Capitalism
Inevitability of shared monopolies in society (few corporations dominating entire fields)
Eliminates opposition in the “free market”; they determine price and quality
Karl Marx believed social order is achieved by successful economy
Capitalism produces a class of opposed people, lack of centralized planning results in
overproduction, labor-saving machines ruins employment, control of state by wealthy =
proletariat will rise up against the wealthy and overthrow them
Megamergers take already large corps, combine them and create even larger corps
Centralizes capital to reduce competition
Raises prices for consumer
Increases power of Corp over employees reducing number of jobs, unions, etc
Interlocking directorates: an individual is on the board of two companies (direct) or two
companies have a director on the board of a third company (indirect)
Clayton Act: illegal to serve on two boards direct but indirect was a way to avoid it
Transnational Corporations
Globalization of U.S. Corps have assets overseas to increases profits
Leads to less jobs for semi skilled workers in U.S.
Grants larger power to corps across the world
Concentration of Wealth
Less than 1% have over 80% of output, 80% of assets, and 90% of profits
$ 400 wealthiest Americans > $ 185 MILLION poorest
CEO salaries increase dramatically and much faster than their workers salaries
Gov policies reduces tax on Corp, and cut back on programs benefiting poor,
2.2: Political System: Links Between Wealth and Power
Oligarchy: government ruled by the few
Government by Interest Groups
Democracy ideally is of, by and for the people; equality before law
However, wealthy interest groups hire lobbyists to persuade legislation
Lobbyists on both sides but vast majority represents the 1%
Financing of Political Campaigns
Campaigns are financed by individuals and organizations
Limitations on donations to political campaigns have many easily accessible loopholes
Although labor unions have the power to spend freely, they are no match for big corps
2.3: Bias of the Political System
Power elite uses their power to their own advantage
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