The U.S. Economy Is Neither Capitalist Nor Socialist

[Yavin4]

The U.S. economy, as are most developed economies, is a mixture of public and private producers of goods and services. Capitalism is an economic system wherein production of goods and services are all privately held, and in a socialist system, production is in the hands of the public, either through their government or through some other form of collective ownership.

In the 20th century, after the Great Depression, the U.S. enacted several reforms to our economy. These reforms regulated our banking system, provided public insurance for the elderly and the unemployed, broke up monopolistic trusts, mandated collective bargaining with unions, ensured that the elderly had healthcare, and many, many other reforms. These reforms, and others, created the largest middle class in American history, and this middle class allowed our economy to have steady growth for years without a financial crisis.

The problems with our economy started with the Reagan revolution in the 1980s who told us that if we de-regulated business and cut taxes on the wealthy, then we'd all get rich. What really happened is that a very small number of us, most of whom were already rich, got even richer, and the rest of us had to borrow more and more just to have the lifestyle that our parents had. Our economy has gotten so skewed that we've returned to the boom and bust cycles that lead to the Great Depression.

I say all of this so that we can debate our economy on the basis of truth. Capitalism did not cause our current problems because we don't live in a purely capitalist society. What caused this problem is that we've allowed a small group of people to completely skew our political system so much so that it is incapable of writing and enacting legislation that balances the interest of the people against the economically powerful. It's vital to the argument to make this distinction because there were public institutions involved in the financial crisis as well as private ones. (See Fannie and Freddie.)

[BlooInBloo]

1. Wow. You guys really do love nattering back and forth over purely semantical issues.

[Yavin4]

3. It's Not About Semantics. It's About Accuracy

Just like saying Obama is a socialist, it's also inaccurate to say that America is a capitalist economic system. The problem is that people love to argue about extreme economic systems that are irrelevant to the problems at hand.

[MrModerate]

4. And you don't? C'mon. Fess up. You wanted to write a long diatribe . . .

But had to rush off to do something useful and real-worldish instead.

[voc]

2. Trickle down

failed to trickle down. Said better than I could. I would note that the group you speak of isn't that small, they have quite a few followers who are convinced that if they hold them up they, too, will benefit. To that end, I would consider them lesser members of the same club. It is doubtful that if they didn't have these "hopefuls" the perceived power would be somewhat diminished.

[Double T]

5. The US economy is purely a Greediest economy.

The top 1% rule and have most of the wealth.

[Selatius]

6. Correct. It is a mixed economy. It is a terribly broken, unequal economy, but it can be reformed.

A little introduction of socialism and regulation here and there would go a long way towards reversing the damage.

Nowadays, I favor an introduction of a co-op sector alongside a private sector. The co-op sector would be supported by a public banking mechanism that is capitalized by a capital assets tax on all businesses. Ideally, we can replace all business taxes with this single tax. Labor co-ops would receive funding from this public bank much like any other enterprise would receive money from traditional banks. Failed or failing firms in the private sector could opt to be bought-out by the public bank, which would then reorganize the firm into a new labor co-op.

In time, the co-op sector will grow large and be a significant alternative to selling one's labor to capitalists. The competition between the two sectors for the same pool of labor would translate out into better pay and benefits for all, provided the co-op sector is allowed to compete on a level playing field with the private sector.

[AllentownJake]

7. Capitalism vs. Socialism is overly simplifying the matter

Trying to blame an economic system or way we structure the production of goods or services is not in reality what is doing us in.

We are simply an empire that is in decline. Same thing that is happening to us right now has happened to countless other empires as they tried to expand their influence and power too far beyond their own borders.

We are simply a nation that can no longer afford it's empire, however it is politically impossible for anyone to make that acknowledgement. It more resembles what happened to the Soviet Union than it resembles anything else.

[Luminous Animal]

8. The problem is that we allowed a small group of

capitalists to skew our political system.