For an explanation of what is capitalism to people in the United States, we have to take into consideration some important terms. Basically, capitalism is a socio-economic system based around the operation of their own production and the ownership of the resources of production. Other central features of capitalism include a competitive market, capital accumulation, free markets, private property rights, voluntary exchange of goods and services, and wages to be paid based upon the productivity of the labour. This article will look at what is capitalism, how it applies to the US economy, and where does it lead us into the future?
Contrary to popular belief, not all states in the United States are committed to fully fledged forms of capitalism. In fact, there are mixed economies – that is, between fully fledged capitalism and state-run capitalism, or between full-fledged capitalism and state run socialism. Needless to say, the degree to which this exists and the degree to which it favors one form of capitalism over the other, and therefore, the balance between these two forms of capitalism, will determine the balance between the various economies within the United States. And this balance can be determined by government intervention.
In other words, the problem with most forms of capitalism in the US is not so much the overall effects on the distribution of wealth, but rather the nature of how capital goods are produced. In traditional forms of capitalism, the ownership of productive assets is left entirely in the hands of private individuals. But in a mixed economy, the ownership is not equally distributed. For instance, because of the different levels of government intervention that may be required to guarantee the success of specific ventures in the mixed economy, there is no guarantee that private individuals will contribute anything comparable to the investment capital necessary to ensure that a new business succeeds.
Mixed economies are a special case, however. In such cases, even the most idealistic economic system is fraught with problems, particularly when it comes to distribution of wealth and opportunities. And that's the rub, isn't it? The existence of mixed economies creates problems for the system of capitalism itself. The system of capitalism is defined by private ownership and entrepreneurial enterprise, and it also depends upon the existence of non-state-driven economic systems, such as Communism and state run Socialism.
One of the main arguments against capitalism that arose long before the twentieth century is that it is based upon an aristocratic and parasitic economic structure, wherein there is exploitation of labour and of land through private ownership and entrepreneurial enterprise. And this is part of the argument against socialism that is made by Ayn Rand and her fellow right wing thinkers – the systems of socialism and capitalism are, essentially, the same thing, and in her view, one must necessarily side with the latter. It is because the conditions required for capitalism to . . . . . . occur naturally, without any outside force impeding its growth, and without the intervention of individuals or their representatives on behalf of the community, and it is also because of what she calls the intellectual property rights protected by the French revolutionist, Robespierrists.
But it would be wrong to say that all who support capitalism do so because they want to live in a society that is characterized by exploitation of labour and of land. Most of them are in support of capitalism because of what they believe it stands for – a free-market, laissez faire, and so forth. And in this way, the difference between socialism and capitalism becomes blurred. It is a common misconception that a “rebel” is someone who hates capitalism. That's not true at all – people who support capitalism hate socialism just as much as people who oppose it, so I guess it really isn't the “right” type of attitude to have, is it?