Is the U.S. Capitalist, Socialist or Something In-between?


During the Presidential campaign, then-Democratic candidate Barack Obama inartfully described his proposed federal income tax cuts for the middle class as “sharing the wealth.” His more strident right-wing opponents – including Vice Presidential candidate Sarah Palin – almost immediately labeled Obama “a socialist,” adding to a litany of alleged infirmities as a presidential candidate that included lacking executive experience; being a closet Muslim; and “someone who pals around with terrorists.”

Yet in reality Obama’s middle class tax proposal may have been the least “socialist” concept that has been floated and acted upon by a broad array of elected officials and senior-level appointees since four weeks before and four weeks after the Presidential election. This includes not only the huge federal financial bailout and taking of ownership of major investment and commercial banks – something embraced by the establishments of both political parties and the putative ‘capitalist’ business elites – but a series of other proposals, including the bailout of the Big Three American automakers, that are far more socialistic than a tax cut.

Of course, effective campaigning, like good television advertising, tends to have at least two fundamental characteristics in common – oversimplification and hyperbole – so one might forgive or ignore the campaigns for taking liberties with such terms. Yet the ready and frequent use of the term “socialist” by a variety of sources does raise serious questions as to whether anyone out there really understands either capitalism or socialism as concepts or political constructs. This might help us know how much we should apply either label to the U.S. given the prevailing economic malady and the series of palliatives being offered up by the current and future Administrations, respectively.

Socialism, of course, places primary ownership of the means of production in the hands of the state, or in some cases, corporate entities controlled by the state. In its extreme cases, such as in North Korea, this reality is absolute; in many other countries, state control is predominant and preeminent but pockets of private enterprise, usually small-scale and concentrated in agriculture or business services, still exist.

Capitalism is a much more vague idea but essentially reverses priorities, putting the predominant role in the hands of private interests such as investors and corporations. State power in a capitalist country usually focuses on the creation of standards, public health, safety, and welfare, such things as regulating the currency, protecting the environment, and assuring the health of the populace.

In contrast to the 19th Century, the US already operates on a much-diluted form of capitalism. Our markets are not free; they are highly regulated (and yet many would today argue they are not highly regulated enough). The exchange rates and values of our currency do not float freely but are heavily manipulated through federal government rate-setting activities. Investment decisions are not driven purely by return expectations or classic risk/reward analyses; rather they are incentivized or discouraged by a byzantine system of rewards and penalties affectionately known as the Internal Revenue Code. In other words, the federal government – under both Democrat and Republican Administrations and supported by both Houses of Congress – intervenes routinely in how markets operate and how capital is deployed. In this sense the federal tax code is fundamentally a mechanism for wealth redistribution, so candidate Obama’s statement about his proposed middle-class tax cut simply represented a shift to one set of priorities, much as the Bush Administration’s tax cuts represented another.

If you accept the premise above that the U.S. already had one foot out the doorway between a more pure form of capitalism and socialism as it is widely practiced in other Westernized countries, it now appears that the U.S. is being pulled at warp speed through that doorway, as a consequence of the myriad plans (schemes would be a more accurate description, given how little thought appears to be devoted to them before rolling them out at press conference after press conference) for bailing out various classically capitalistic institutions.

Bailing out a completely broken mortgage finance system that rewarded handsomely (some would say shamelessly) myriad private-sector entities and the mortgage industry represents a shift towards socialism. Providing over $100 billion in taxpayer support for AIG is socialism, not capitalism. Providing $200 billion of taxpayer support to prop up consumer credit, so that Americans can return to a false economy predicated upon unbridled, conspicuous consumption, is socialism not capitalism.

The fact that these and other extraordinary moves by the federal government are undertaken in the name of saving our capitalistic economy and staving off a severe economic depression does not change the fact that we are experiencing – first under Bush and soon under Obama – a powerful drift towards extended state control of the economy. Free-wheeling and unfettered profit-making and corporate greed on the way up, backstopped by enormous government bailouts on the way down, represents in some ways the worst of both worlds .

We now add to this series of attempts to solve our economic crisis the so-called “New, New Deal” proposed by President-elect Obama the week before Thanksgiving. Focused on fixing America’s infrastructure improvements, technological innovation, and education – as well as the creation of 2.5 million new jobs in the process – the New, New Deal basically supplants a failed, quasi-capitalistic economy with one that is driven primarily by government spending on government projects, in part for the purpose of creating new government jobs.

There will be two silver linings if all of these government bail-out strategies and the implementation of Obama’s New, New Deal succeed: The U.S. could emerge from this economic abyss in which we find ourselves; and pass, at last, a comprehensive, universal healthcare reform that will not look nearly as socialistic as it may have appeared only six months ago.

Yet there are some real dangers as well. A massive government program that extends more and more into every aspect of the economy could bring enormous inefficiencies as political decisions overtake market-based decision-making. It is not beyond the pale, for example, that banks may make loans to customers not based on their fundamental ability to pay but their ability to shift their risks to the government. Land use and other decisions once left to markets and localities could be placed in the hands of federal regulators, where the influence of well-connected developers and special interests (including such laudable causes as environmental protection) could be profound.

Of course, this is a situation that could also change our national geography in profound ways. Parts of the country well-plugged into the new ruling party – the Northeast, coastal California, and most of all Chicago – could be huge beneficiaries. But the real winner, as I have argued before, may be the Nation’s Capital and its environs, whose power over the private economy would be greater than at any time since the Second World War.

Of course, it may perhaps be both overly simplistic and somewhat hyperbolic to suggest that Washington, D.C. is morphing into "Pyongyang on the Potomac." However, unless the federal rescue of our fundamentally capitalistic economy and society is not very carefully orchestrated, we may see greater similarities with another centrally planned economy – the one run from Paris. In that case, similarities between Paris and Washington, D.C. may extend well beyond the boulevarded street network and classical scale bestowed upon us by Pierre L'Enfant; we could also end up with something more akin to France's centrally controlled dirigiste system than anyone could have expected.

Peter Smirniotopoulos, Vice President – Development of UniDev, LLC, is based in the company’s headquarters in Bethesda, Maryland, and works throughout the U.S. He is on the faculty of the Masters in Science in Real Estate program at Johns Hopkins University. The views expressed herein are solely his own.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

nice post

Very greatful for the information presented. I have a great time reading your content. Keep it up.feast your diet away program


Very greatful for the information presented. I have a great time reading your content. Keep it up.the high performance handbook

I read your post very

I read your post very carefully and I want to say that the USA is a Diplomatic country. I personally don't like the policies of the USA they ruin the world order, so they don't follow them. So they should review their policies.
sore muscles

sky vue - Bishan New condo

sky vue - Bishan New condo launch by Capitaland Singapore at Bishan st 15. Sky Vue condo is located mins walk to Bishan MRT. Full set floor plan for ...

snoring chin straps Check

snoring chin straps Check our latest snoring chin strap review before buying this anti snoring device. You also find where to buy 1 get 1 free in our snoring chin strap...

tao of badass Become A Total

tao of badass Become A Total Badass At Meeting And Attracting Women This site is a leading resource for information about the Joshua Pellicer Tao Of Badass PDF book and... A A RebelMouse site for fans of relationship expert Mike Fiore. On this site, you can read reviews of Michael Fiore texts, products, books, PDF downloads, and new releases...

read more Old School New

read more Old School New Body Workout System: The Age-Defying Focus4 Exercise Protocol For Achieving Your Ideal Body. This site is a leading resource for information about the Steve Holman Old School New Body PDF book and workout training system that teaches you how to lose weight....

news Grow Taller 4 Idiots

news Grow Taller 4 Idiots Ebook: How To Grow Taller Using A Combination Of Extremely Effective Height Gain Exercises, Sneaky Appearance Tricks, And "Height Boosting Cocktails". This site is a leading resource for information about the Darwin Smith Grow Taller 4 Idiots PDF book....

more conversation tips from

more conversation tips from bobby rio Make Small Talk Sexy: The Conversation Secrets That Help You Crawl Into A Woman's Mind And Activate Her Libido Almost Like Magic. This site is a leading resource for information about the Bobby Rio Make Small Talk Sexy PDF book and conversation escalation....

vipit pikalaina, turvallisen

vipit pikalaina, turvallisen ja kohtuullisten kustannusten pikalainan saat osoitteesta Pikavippi – pikalainan takaisinmaksuajan valitset itse, ... Forever Forever Yours: Carlos Cavallo Reveals Why Men Pull Away, Become Cold, Distant, And Disinterested And How To Get A Man To Open Up Emotionally By Using The "Secret Password" To His Heart That Gets Him To Adore You Completely And Commit Himself To You Forever.. Capture His Heart Ebook: How To Make Your Man Fall Deeply And Passionately In Love So He Never Wants To Leave. This site is a leading resource for information about the Claire Casey Capture His Heart PDF book and lasting commitment program that teaches you how to "flip the switch" in a man's mind that makes him fall madly in love...

michael fiore releases results from his secret survey

Generally I do not read article on blogs, however I wish to say that this write-up very forced me to check out and do so! Your writing taste has been amazed me. Thanks, very great post michael fiore releases results from his secret survey


the low density habits of autocentric culture. There is no escaping this fact. The only way to recover will be to restructure the way we live; and in the end reduce the number of vehicle miles traveled. Not just tell people not to drive, but create communities where driving is not the only option. fönsterdörrar The The National Rental Affordability Scheme is great property investment scheme initiated by the Australian Government to provide 50000 rental ...

web design cardiff - Website

web design cardiff - Website design for business Cardiff, Llandaff, Splott, Bay, Canton and ... Share them and have a chance of winning! ... Tel: 01656 655669 Fax: 0871 264 5758 Email:

exercise during pregnancy

exercise during pregnancy All-Belly Pregnancy Program: How To Eat And Exercise When Expecting To Stay Fit, Have A Strong, Healthy Baby, And Be One "Hot Mama"! This site is a leading resource for information about the Ryan Watson and Flavia Del Monte All Belly Pregnancy PDF book, diet manual, and exercises for pregnant women that help you carry your pregnancy weight with ease, prepare you for giving birth and beyond, and help you keep your baby healthy and happy inside the womb.

gmo foods -

gmo foods - Ever hear of GMO – genetically modified organisms? A lot of you are most likely wondering what these are or have never even heard of them. These GMO are in products where the genetic makeup has been altered through genetic engineering. Many Americans including myself are concerned about the spread of genetically modified organisms throughout agriculture, and the fact that there is no current requirement in this country for labeling of GMO foods.

ocala business Well, Office

ocala business Well, Office Metadata is a business directory for the best Central Florida businesses. Our staff patronizes every business personally before writing a short post of our thoughts. There is no negativity here. If a business is not up to par, we do feature it and we don’t recommend it.

the girlfriend activation

the girlfriend activation system The Girlfriend Activation System: How To Get A Girlfriend Step-By-Step Using "Literotica". This site is a leading resource for information about the Christian Hudson Girlfriend Activation System PDF book and attraction system that teaches you how to turn a girl you like into your loyal and committed girlfriend.

how to get rid of cellulite

how to get rid of cellulite fast The Cellulite Factor: Make Cellulite Disappear And Get The Sexy Body You Want. This site is a leading resource for information about the Dr Charles Cellulite Factor PDF book and cellulite treatment system that teaches you how to get rid of cellulite fast in your legs, hips, butt, and other trouble spots.

mike whitfield workout

mike whitfield workout finishers 2.0 Workout Finishers Ebook: How To Get Ripped And Torch Body Fat Using Insanely "Weird And Addicting" Metabolic Stacking Exercises...Without Giving Up Any Of Your Favorite Workouts. This site is a leading resource for information about the Mike Whitfield Workout Finishers PDF book and body transformation system that teaches you how to use metabolic finishers to torch body fat, build lean, sexy muscle, and dramatically improve conditioning without cardio. The Michael The Michael Fiore Text Your Ex Back 2.0 PDF and multimedia texting system is here! Read reviews, get download and purchase links, and learn about Michael Fiore text examples and techniques to get your ex back.

vision without glasses

vision without glasses Vision Without Glasses: How To Achieve Near Perfect 20/20 Vision Completely Naturally, No Matter How Young Or Old You Are. This site is a leading resource for information about the Duke Peterson Vision Without Glasses PDF book that teaches you simple and highly effective eye exercises to improve vision and other techniques to get better eyesight without glasses or contact lenses.

old school new body Old

old school new body Old School New Body Workout System: The Age-Defying Focus4 Exercise Protocol For Achieving Your Ideal Body. This site is a leading resource for information about the Steve Holman Old School New Body PDF book and workout training system that teaches you how to lose weight, build muscle, and tone your body in just 90 minutes per week using a combination of 4 youth-enhancing exercises.

power of conversational

power of conversational hypnosis The Power Of Conversational Hypnosis Ebook: 3 Crucial Factors That Almost Force People To Fall Under You Hypnotic Spell And Do Exactly What You Want. This site is a leading resource for information about the Igor Ledochowski Power Of Conversational Hypnosis PDF book and hypnotic training system that teaches you effective techniques for influencing and persuading people to give you exactly what you want during everyday conversations.

fantasy lover formula The

fantasy lover formula The Fantasy Lover Formula System: Become Your Woman's Ultimate Sexual Pleasure. This site is a leading resource for information about the Krista and Leann Fantasy Lover Formula PDF book and video seduction system that teaches you incredible techniques on giving intense sexual pleasure to your wife, girlfriend, or hottie you just met at the bar.

carb backloading Carb

carb backloading Carb Backloading Diet: What Muscle And Fitness Magazine Has Described As "Eat Like A Pig. Get Shredded. The Carb Backloading Diet Could Provide The Holy Grail Of Packing On Mass Without Adding Fat." This site is a leading resource for information about the John Kiefer Carb Backloading 1.0 PDF book and body fat control system that teaches you how to pack on incredible muscle while burning fat simultaneously, all while enjoying the foods you love...and YES that means pizza and donuts!

fut millionaire autobuyer

fut millionaire autobuyer FUT Millionaire Autobuyer System: How To Earn Millions Of Coins And Snatch The Best FIFA Players In The Game...All On Autopilot. This site is a leading resource for information about the Mike Miranda FIFA Ultimate Team Millionaire Autobuyer PDF book and trading system software that teaches you how to quickly and easily turn the FIFA marketplace into your own gold coin ATM machine so you can acquire any player you want and build the ultimate dream team.

Superb writing i am

Superb writing i am impressed by york i would like to express thanks here please dont stop sharing i am waiting for next updates. crossbow sale

All these are stages of

All these are stages of life, and every living thing goes through them. Together, these stages are called the life cycle. this site

finance could be

finance could be accomplished as a result of four major alternatives. Loans, leasing, municipal leasing, and leasebacks are what we will focus on right here. Remember, the selection you pick out for the company will vary depending upon your organization demands and your small business enterprise credit rating. factoring receivables

Took me time to read all the

Took me time to read all the comments, but I really enjoyed the article. It proved to be Very helpful to me and I am sure to all the commenters here! It's always nice when you can not only be informed, but also entertained! I'm sure you had fun writing this article.
Mobile spy


In an era where marketing and advertising are used on a daily basis, I have to say that the US has a capitalist way of dealing with things. I was reading something very interesting about advertising on the Perry Belcher website. Maybe you should read it too. That will clarify a few things for you.

The National Council for a New America...

The National Council for a New America launched with an open letter that’s notable for what it leaves out: The issues that a large segment of the party’s base are most passionate about. The National Council for a New America might not be such a bad thing. The conservative element in America certainly is in need of a reboot of sorts, and so naturally, something like the National Council for a New America, or NCNA, would arise. The economic crisis is one of their focal points, as well as the healthcare system, alternative fuels, and a broad array of other issues. Some people might get installment loans to sign up. It could be the short term loans towards a new day in America with the National Council for a New America.

Good realist summary of our economy

As the author correctly points out, we have had a managed capitalistic economy for some time now. This is a legacy of history and, while people differ on the margins, it basically reflects what Americans want. We are culturally attuned to capitalism but dislike the boom-and-bust cycles that come with the pure version. After all, we have had bitter experience with the depressions of the 1800s and the Great Depression of the 1930s. These caused real hardship to millions and shaped the outlooks of generations. No downturn we have experienced since we began regulating the national economy in earnest has come anywhere close. So while government regulation has its hazards and missteps, overall it seems to have a beneficial effect. The question is whether the people doing the managing will have the foresight and willingness to make the necessary tough choices for the long-term good of the nation. This has been a problem in recent years. The fact that millions were easily demagogued into thinking that adjusting tax brackets amounts to a rush to "socialism" illustrates the difficulty of challenging the status quo, an edifice that is showing obvious structural cracks.

I disagree with one thing. The "new New Deal" vaguely outlined by Obama does focus on rebuilding infrastructure, which is a government function. But there is no reason to suspect that the purpose of such a program is to create government jobs. The number of government jobs created is likely to be miniscule compared to the jobs created in private engineering and construction firms. There is simply no need for more government jobs, except for project managers to oversee the contracts, and many of them may already be on staff. No one has mentioned a program of direct government employment.

Obama's idea sounds like a better approach to our current problems than trying to keep the financial and real-estate bubbles inflated, which I fear is going to be the net effect of the bailouts.