The U.S. Is Not Capitalist

Source: AP Photo/Russell Contreras

Is the US the vanguard of capitalism for the world? Is the US even capitalist? For most media pundits the answer is obvious: Yes! Everyone knows that! After all, the U.S. has always ranked high on the indexes of economic freedom.

At least one conservative writer suggests that the US may not be the capitalist champion that people think it is. In The American Economy Is Already Too Far Left for Comfort — or Prosperity, Martin Hutchinson wrote, “Americans already are living in a socialist society.” As evidence, he points to the size of the government: “First, the state sector is unimaginably larger than in Marx’s day, around 40 percent of GDP in the United States, when federal, state, and local governments are included, even if that number is smaller than many other economies elsewhere in the West.”

Hutchinson doesn’t mention it, but the US tax system is more socialist than those of Europe because the US taxes the middle class and poor at lower rates than European nations. Economists tend to underestimate the financial benefits of not being taxed. (finish the article at Townhall Finance)

What is free market capitalism?

People in the West are confused about capitalism because they don’t know enough about socialism. Karl Marx had a greater respect for capitalism than do modern socialists or conservatives. 

Karl Marx fabricated the term “capitalism” and defined it as the private ownership of the means of production. He did not conflate capitalism with commerce, as do most historians today who see shoots of capitalism sprouting throughout human history. Neither did the monasteries of medieval Europe birth capitalism as some historians claim. Is it really necessary to remind historians that monks owned no property and took vows of poverty? Monasteries were closer to the many small socialist experiments, like the kibbutzim of Israel. Marx saw the origins of capitalism in the 17th century.

Marx pretended to have discovered the secret forces of history that had led mankind from tribal economies through feudalism to capitalism and ultimately will usher in socialism. And he insisted that society must follow that sequence. They could not jump from feudalism to socialism because only capitalism could produce the wealth necessary for its socialist heirs to live in abundance. Trying to shorten the path would perpetuate poverty and misery. That’s why Marx was skeptical about the possibility of backward nations such as Russia succeeding with socialism.