Government & the Economy

Government & the Economy
Dennis Schroader
SOC 101
Brianne Larsen
May 24, 2010


As social institutions go, the two that have the greatest impact on the everyday lives of people are government and the economy. As stated in the text:
“It’s hard to imagine two social institutions more intertwined than government and the economy. Besides serving as the largest employer in the nation, government at all levels regulates commerce and entry into many occupations. At the same time, the economy generates the revenue to support government services” (Schaefer, 2009, p 345).
The governmental/political system is the means through which a society implements policy and procedure to achieve its goals. This is a universal institution, differing only in scope and scale. The institution of the federal government in the United States of America, for example, began as a body of extremely limited authority, deferring instead to the sovereignty of the several states (US Constitution, Amendment X). Today, the scope of federal involvement in the everyday affairs of American citizens has evolved to the point at which it is nearly absolute.

According to the text, “The term economic system refers to the social institution through which goods and services are produced, distributed, and consumed” (p 344). Government regulates everyday behavior by this primary means. This as opposed to using police and military forces to respond to criminal and extraordinary events, or schools and media outlets for long-term social control.

The purpose of this paper is to evaluate and describe the role of the joint institutions of the government and economy as viewed through the functionalist, conflict, and interactionist perspectives.

The functionalist view “emphasizes the way in which the parts of a society are structured to maintain its stability” (Schaefer, 2009, p 14). Adherents to this theory view the parts of society as different organs of the body, which work together for the survival of the whole. The first tenet of Functionalism as it applies to a government or society is, “Any group or society must replace personnel when they die, leave, or become incapacitated… through such means as immigration, annexation of neighboring groups, acquisition of slaves, or sexual reproduction” (Schaefer, 2009, p 113). This seems self-evident. A failure to accomplish this fundamental task necessarily leads to the decline and ultimate irrelevancy of a society as illustrated in the description of the Shakers in the text (p 113). An opposite example is that of the United States of America, which has been so successful at attracting new people that there is currently a major national debate about immigration control.

The second tenet of the Functionalist view is that, “…finding or producing new members is not sufficient; the group or society must also encourage recruits to learn and accept its values and customs” (Schaefer, 2009, p 113). This is done through most directly through schools, but governments also have other means by which they can influence society’s values. Some governments, such as China, Venezuela and Cuba among others, overtly control all aspects of the media. In this way, they can prevent dissenting points of view from entering the mass media market. Other nations, such as the United States, do not exercise direct media control, but influence media outlets through other means, such as subsidies or interview exclusives. In the United States, certain social values are also promoted through what research is funded, particularly at the college level. For instance, the US government has funded research into “global warming” to determine what can and should be done to alter the course, yet the same government has not funded a single project to question and challenge the assumptions of the phenomenon itself. By so doing, the government implicitly places its stamp of approval on the notion of man-caused global warming.

The third tenet of the Functionalist view is that, “Any relatively permanent group or society must provide and distribute desired goods and services to its members” and, “The group must satisfy the needs of most members to some extent, or it will risk the possibility of discontent and ultimately disorder” (Schaefer, 2009, p 113). Governments achieve this through their interaction with their economic system.

The two basic types of economic models are capitalism and socialism (p 344). The capitalist system, as originally envisioned by Adam Smith in his work “An Inquiry into the Nature and Causes of the Wealth of Nations” (1776), takes the position that the individual – rather than the collective – is best able to meet the needs and desires for himself and his family when he is free to do so without artificial external interferences, such as from government (Smith & Cannan (Ed), 1904). Smith’s philosophy is based on the principle of voluntary exchange. He noticed “a propensity in human nature… to truck, barter, and exchange one thing for another… It is common to all men, and to be found in no other… animals… Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog” (Smith, in O’Sullivan, Sheffrin, & Perez, 2008). Smith theorized that a natural force – that he dubbed an “invisible hand” – would cause markets to function for the greatest benefit of society and reach equilibrium. In theory, this would require businesses to compete and evolve to best meet the needs and desires of their customers, thereby promoting the best interests of the company and consumer alike. The major flaw of capitalism is the non-existence of Smith’s ideal of a “perfectly free market” in which every consumer has perfect and immediate information about the companies with which they do business and products they purchase. Because it does not exist, markets must necessarily be regulated by government to protect against corporate abuses and excesses.

Socialism rejects free-market principles in favor of collective ownership of the means of production. “The basic objective of [socialism] is to meet people’s needs rather than to maximize profits” (Schaefer, 2009, p 346). The socialist theory as defined by Karl Marx criticizes capitalism as an exploitative institution whereby the rich business owners (the bourgeoisie) oppress their employees (the proletariat) by controlling the means of production. Marxist theory takes what is to them the next logical step by claiming, “A central government, acting as the representative of the people, should make basic economic decisions” (Schaefer, 2009, p 346). The “evolution” of this theory, according to Marx, is communism, in which the collective – by way of the state – owns all property and there are no social distinctions. This ideal has never worked through history, although proponents would argue that its failure has been one of implementation rather than a flaw in the philosophical and economic models. This is, in essence, the “it would work if you would just do it right” argument which does nothing to support or advance the theory. The major flaw in this theory is that it discounts human nature. Some people will work until they die for a cause they believe in, others will only work for so long until they demand results, and the rest will only work as hard as they have to in order to get by. This is illustrated in George Orwell’s dystopian satire of the now fallen Soviet Union, “Animal Farm” (1945).

The fourth tenet of Functionalism is that of preserving order. “Failure to preserve order and defend against conquest leads to the death not only of a people, but of a culture” (Schaefer, 2009, p 113). One of the major points of concern in the immigration debate is that the illegal immigration represents a failure of the American society to preserve order and defend against conquest.

The fifth and final tenet of the functionalist view is, “People must feel motivated to continue as members of a group or society in order to fulfill the first four requirements.” Further, “Patriotism, then, assists some people in developing and maintaining a sense of purpose” (Schaefer, 2009, p 113). Recalling the reference to Animal Farm, this tenet is fundamentally represented by the character “Boxer”, the workhorse, who was driven by his sense of duty to sacrifice himself for the purpose of providing a better future for his society. Alternatively, one of the other horse characters, “Mollie”, was far more vain and self-indulgent and quickly left the farm when it became necessary to contribute. In this example, “Mollie’s” lack of purpose as it applies to the society influenced her to seek another society where her true purpose – being pampered by humans – could be realized.

The conflict perspective disagrees with functionalism. While both views agree that governments exist to “meet basic social needs”, the conflict theory objects to idea that outcome is efficient or desirable (p 114). In similar fashion with Marxist theory, the conflict perspective insists that major institutions exist to maintain the privileges of the powerful, thereby contributing to the powerlessness of others. Conflict theorists believe government is inherently conservative (resistant to change) and discriminatory.

A person who subscribes to the conflict view may take a radical stance or action to affect the social change they seek. William Ayers – a domestic terrorist who bombed the New York City Police Department headquarters, the US Capitol Building and the Pentagon in the early 1970’s - is a prime example of conflict theory in action. Other domestic examples include Timothy McVeigh and Terry Nichols – the bombers of the Oklahoma City federal building – and Adam “Azzam Al-Ameriki” Gadahn – the California-born traitor who joined al Qaeda to fight against the United States and its allies.

The interactionist view “emphasizes that social behavior is conditioned by the roles and statuses we accept, the groups to which we belong, and the institutions within which we function” (Schaefer, 2009, p 114). In contrast with the other two perspectives discussed, this viewpoint takes a “bottom-up” or micro-sociological approach to “explain society as a whole” (p 16). This theory focuses on the everyday interaction among members of society as the means of social change. The text discusses increased globalization – greater interaction among diverse members of different societies – and specifically the recent evolution of the Chinese economy into one that represents an ever-growing capitalist presence because of this interaction (pp 348 – 349).

The primary effect of the interactionist view is on the individual level. As people interact more and more with others in a non-homogenous environment, an informal cultural exchange takes place. The American sees aspects of Indian culture worthy of emulating. The Chinese sees the benefits of moving to a free-market system through their interaction with Americans and American businesses. Social change is accomplished by planting these seeds in the individual rather than through sweeping legislation or massive social movements.

Each theory makes its own case for the state of society in general and how its adherents might affect social change. This brief and far from exhaustive glimpse of different sociological perspectives on the joint institution of the government and economy reveals the incredible impact on the populace as a whole. As humanity as a whole and the societies within evolve, these theories are tested and modified to likewise evolve. The institution of government and the economy, both resistant to change through social inertia, serves the purpose of establishing the guidelines and protocols through which activists of all sorts may attempt to bring about their vision of society.

References
Orwell, G. (1945). Animal Farm. London: Secker & Warburg.

Schaefer, R. (2009). Sociology: A Brief Introduction, 8th Edition. Boston: McGraw Hill.

Smith, A., Cannan, E.  (Ed.). (1904). Wealth of Nations, Cannan Edition, 5th edition. London: Methuen & Co., Ltd.

US Const., amend. X.