Free-market Capitalism? Hardly.
Free is hardly the term I would use to describe the “market” in the U.S. these days. With red-tape abound, I think “bridled market” would be much more suited. When one thinks of capitalism, the free-market immediately comes to mind. When one thinks of the U.S. economy, capitalism immediately comes to mind. Therefore, the U.S. is a free-market capitalist state right? Once upon a time, yes we were. Have you ever read the recounts of how early settlers traded with the Indians (furs, grains, tobacco, etc.)? Do you think those transactions were hindered by red-tape? No, they were transactions resulting from a truly free market. Over the years, regulatory measures in regards to the market have piled up and have all but eradicated the idea of a free-market. The U.S. remains a capitalist state (for now), but not so much a free-market capitalist state. Personally, I believe the U.S. more resembles “state based capitalism.” To clarify consider this:
- Free-market capitalism is an economic system in which the means of production are privately owned and operated, profiting said private entity. In the free-market capitalist system, the state has very little say-so and control over the production and operation of goods and services. Supply and demand are the ultimate controllers in such a system.
- State-based capitalism is a system in which the means of production are privately owned (for the most part) and operated (for the most part), profiting said private entity AND the state under which the system presides. In the state-based capitalist system, the state has significant control over the production and operation of goods and services. You could consider the state-based capitalist system as an infant socialist system.
So which one sounds more like the U.S. to you? Especially with the legislation and government takeovers/bailouts of late, I would definitely side with state-based capitalism. So why does everyone just assume that capitalism is capitalism and the free-market is just a given characteristic of the capitalist system? Some may just do it unintentionally, but some are out to cast the “free-market” into the fire for causing all the problems in the U.S. economy (especially of late). But guess what? The U.S. really doesn’t operate under a purely free-market! At best, the U.S. should be considered a “mixed economy.” As the “free” characteristics of the market continue to disappear as a result of government takeovers of industry (healthcare, automobiles, banks, etc.), the U.S. is going to have to stop referring to themselves (ourselves) as a capitalist state. I bet you can guess what the new system will be called…
