In the United States today health care reform is front and center. President Obama has stumped for reform in dozens of appearances across the nation, an address to the Congress, and no fewer than five televised news shows last Sunday. On a daily basis the media report the latest wrinkles in a spate of health care proposals under discussion in the Congress and speculate on the political prospects of the President's preferred "public option."
In the health care debate, as in the government bailout of failing banks and two major U.S. auto producers, some critics of the White House invoke the "S" word – socialism. They warn that America is abandoning its historic commitment to limited government, private ownership, and the free market in favor of a welfare state, public ownership, and a planned economy. Such critics, including those attending TEA (Taxed Enough Already) parties, seem to share Ronald Reagan's distrust of government. Government, they believe, is the problem, not the solution. Government, they tell us, is inept, it covets more and more power, it steals from producers to support parasites, it threatens our liberties, and it saddles future generations with enormous debt. (1) Setting aside the voices of dissent from the radical fringe - the birthers, the conspiracy theorists, those who vilify the President as a liar, and those who construe his pep talk to the nation's students as socialist propaganda - let's engage the central issue: Is the United States abandoning capitalism for socialism?
Let us understand that under socialism the government owns and administers the productive apparatus of society and provides all the goods and services, and by contrast, under capitalism individuals and companies own and administer the productive apparatus of society and provide all the goods and services with the possible exception of law enforcement and national defense. Now, where can we find examples of these two systems in practice? The fact is that we can't because the dominant economic system in the world today is a mixed one. A mixed economy incorporates elements of socialism and capitalism, although the mix differs from nation to nation. When a good or service is provided by a public source in a society, there is a socialist component; when a good or service is provided by a private source in a society, there is a capitalist component.
Thus, if you want to see socialist components in the United States, look no farther than the Grand Canyon National Park, Social Security, Head Start, Medicare, Medicaid, the U.S. Postal Service, food stamps, police and fire departments, Youngstown State University, the Canfield public schools, the Public Library of Youngstown and Mahoning County, and the Mill Creek Metroparks. (2) Similarly, if you want to see capitalist components in the United States, look no farther than Disney World, the stock market, McDonald's, Wal-Mart, Amazon.com, Microsoft, Omaha Steaks, UPS, ESPN, Grove City College, Farmers National Bank, the Exal Corporation, and Handel's Ice Cream.
It seems clear to me that the U.S. is not abandoning capitalism for socialism. Rather, it continues to blend elements of both systems. Although the specific jurisdictions of the public and private sectors in America will change in the future as they have in the past, our economic hybrid is here to stay for the foreseeable future.
- See, for instance, the recent statements of the Atlas Society, a group which seeks to perpetuate the ideas of Ayn Rand, an advocate of laissez-faire capitalism. See www.atlassociety.org.
- One of the ironies in recent weeks is a mother objecting to her child hearing a talk in his public school by President Obama because she wanted to shield him from "socialist propaganda." Public schools are a socialist component in America. If Americans were pure capitalists, there would be only private schools.
© 2009 Tom Shipka