POLS 102 1st Edition Lecture 3Outline of Last Lecture I. Prisoners Dilemma DefinitionII. Nash Equilibrium DefinitionIII. PoliticsIV. Valuesa. How they are used in politicsb. American valuesi. Freedomii. Order1. Narrow2. Socialiii. Equalityc. How values conflictOutline of Current Lecture 1. Policy Outcomesa. Examples2. Governmenta. Definition3. Government Characteristicsa. Legitimacyi. Why the actions of government are seen as legitimate 1. Tradition2. Charisma/Capabilities of leaders3. Rational Reasonsb. Power through which force is exercisedi. Positive Powerii. Negative Power4. Why we have governmenta. Maintain Orderb. Provides Equalityc. Address Collective Action ProblemsCurrent LectureThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.Policy Outcomes – what the government does as a matter of law, regulation or other actions (policy instruments) to help the public realize some desirable value or interest, for the pursuit ofequality and opportunity. Examples:1) Pay for veterans’ college education through the G.I. Bill2) Ensure creditors that student loans will be paid back, if they default3) Requires people to get health insurance and subsidizes the purchase of it4) Put Japanese Americans into internment camps during WWII (so they wouldn’t sabotage the US plans.) And removed Cherokee’s from Georgia once gold was found on the land (“Trail of tears.”)5) Free Community College (?) – Obama is proposinga) By raising taxes on people with a household income of over $500,000b) It will reduce the resources of the rich to help the less fortunatec) = Raising capital gains taxes to pay for educationThe government has these policies because it’s desirable for the population as a whole.Book Definition of Politics:The process through which individuals and groups reach agreementson the course of common or collective action– even as they disagree about the intended goals of that action.“Politics is about who gets what, when and how.”– LaswellGovernment – the monopoly holder as the legitimate use of force in society.- They have the ability to force individuals to agree and follow with a certain policy– unlike any other institution. - Negative things occur when individuals don’t comply with lawsGovernment Characteristics1) Legitimacy– the state of affairs in which the government is recognized as the just and properruler. The actions of the government are viewed as legitimate. a) Why the actions of the government are viewed as legitimate: Tradition - Birth or monarchy- People believe God gave specific people the right to be rulers (for example: Henry 8) Charisma/Capabilities of Leaders- Their willingness to manage resources, engage in brutality, etc. makes them a respectable leader.- Example: Napolean Legal/Rational Reason (especially in democracies)- Agreed upon based on a fair legal system through a procedural voting system- Even if you disagree with who won an election, they won in a procedural, fair way- However, not all actions are legitimate or in line with the constitution 2) Power through which force is exerciseda) Positive Power– Person A forces Person B to do something that Person B doesn’t want to do.  There’s a relationship between transaction costs and conformity costs.- Transaction costs – Time, efforts and resources necessary to reach a conclusion or make a decision- Conformity costs – Refer to cost of living with a situation or outcome you don’t like – actual dollar amount(a) Example: People who are against abortion, living in a state where abortion is legal. They have an inverse relationship – when transaction costs are low, conformity costsare high and vice versa. Some transaction costs are infinite - Example: Obama trying to convince republicans to raise capital gains taxes It is hard for the government to push conformity costs on people – therefore it is hard for the government to pass laws that people don’t like- However, the U.S. has high conformity costs. b) Negative Power– the ability for government to block laws and increase transaction costsand lower conformity costs. Stopping people from what they want to do. Relationship between transaction and conformity costs - When making laws, the government does not have many transaction costs to offer. - Example: the Republicans aren’t passing the raise on capital gains taxes = they don’t want a conformity cost.Why do we have government?1) Maintain Order– if we didn’t have government we’d have to worry about people randomly putting conformity costs on us.a) Avoid a “state of nature” = get hobbies2) Provides Equality3) Address collective action problemsa) Coordination – the management of decision necessary to create an outcome Sometimes done effectively or ineffectively  Bad Coordination – FEMA’s bad or lack of response to sending aid to Hurricane Katrina victims; however, they eventually turned it around and helped the victims out.b) Free Riding– there’s a benefit that people can enjoy and its non-excludable  Non-excludable – available to everyone, by its existence, even if you don’t produce it- Example: Clean Air, National Security, etc. A lot of people choose to use these resources without paying for them, because theycan- “There’s a cost to create a benefit and there’s also an individual share of the benefit” - Olsen- But your individual share is so small it’s not worth it to pay your individual share- Everyone has this same incentive structure, so they use resources without payingfor