America Does Not Have A "Free Market Capitalist" Economy

America Does Not Have A "Free Market Capitalist" Economy

I say quite often that America does not have a Free Market Capitalist economic system and sometimes the befuddled looks I get from those that hear this provokes them to question what I mean by it. The answer is simple and can be broken down into two parts, the two definitions of what is being asked.

"What is a Free Market?" and "What is Capitalism?"

The answers to these two questions together with an understanding of the current mode of economic activity gives a clear indication that the statement, "America does not have a Free Market economic system" is true.

So what is a free market economic system?
Free Market principles point to an economic system where business are unfettered by regulation, licensing, special fees and taxation, a system where all manner of salable goods are on the market without prohibition or exclusion. It is a system where the buying habits of those consumers would drive the manufacturers and distributors to produce or stock items that were valued by customers and discontinue or remove goods that have lost favor or marketability and sales numbers. This provides that customers are able to actually drive the economy by their buying habits and wants, without the interference of an outside entity.

This would of course be in contrast to the current system of high regulation, increasing taxation, special licencing, educational requirements and so on the American system is plagued by. Economists who advocate this idea of unfettered markets, also see that allowing prices and wages to form naturally and the availability and manufacture of goods to lie in the interest of those who have the capability to produce and the want to produce in trade for profit is a nearly unfailing concept in the ways of maximum efficiency of producers as well as maximum favorable market conditions for consumers.

With this some may say that the deregulation of businesses will (could/would) lead to businesses being able to skirt environmental concerns, livable wages, price gouging, and so on. In response to this one can argue on the case of environmental concerns that the information that a retailer or manufacturer was damaging the environment, the consumers voice could be heard by lowering or altogether abandoning or boycotting the product, manufacturer and retailers and distributors. When profits and sales decrease a signal is sent that certain practices are not favorable or condoned. This is the aspect of "market self regulation".

On the issue of wages. Wages should be set by employer and employee. If in the scenario an employer is offering too little pay the potential employee can ask for more or refuse. By no means should the wage of any person be determined by anyone other than the laborer and the job provider. In the system we have now wages are set by government decree, in an attempt to make a fair wage government actually provides yet another hurdle for a prospective employee to jump in order to gain employment. If the set wage is too high for the business, they will refuse to hire. Minimum wage laws also hinder the ability of these businesses to adjust wages based on experience of each employee, there is always a floor that they cannot overcome. Again a control on the level of wages offered by businesses is not a Free Market principle. It is a system of control.

Pricing controls work similar to wage controls, being that wages are prices and vice-versa, it stands that any interference in the marketable value being set by someone other than the seller negates the definition of free market practice.

So what is Capitalism?

Capitalism is defined many ways depending on the social structure lense those defining it look through. To make this easier we can go with two differing opinions, one from Wikipedia (which I use because of it's high use of editing from other editors) and then a definition from the website WorldSocialism.org (including this one because it highlights the idea that the word has different meanings depending on who you ask and how they define it).
According to Wikipedia Capitalism is "is an economic system in which trade, industry, and the means of production are largely or entirely privately owned and operated for profit. Central characteristics of capitalism include capital accumulation, competitive markets and wage labor.  In a capitalist economy, the parties to a transaction typically determine the prices at which assets, goods, and services are exchanged."  This is the definition, or close to it, that most non socialists agree upon.

With this definition in mind we can see that there are a large number of businesses and services that are not privately owned, ran, or funded but are so called public services and are controlled by government, whether county, state, or federal, and are funded through taxation instead of consumerism. This leads me, to say that we may define America as a mixed economy, but definitely not a pure Capitalist economy.

According to the website WorldSocialism.org though Capitalism is something to be feared and abhorred based on their claim of worker exploitation. The definition they detail is,"Capitalism is the social system which now exists in all countries of the world. Under this system, the means for producing and distributing goods (the land, factories, technology, transport system etc) are owned by a small minority of people. We refer to this group of people as the capitalist class. The majority of people must sell their ability to work in return for a wage or salary (who we refer to as the working class.)"

They go on to say,"The working class are paid to produce goods and services which are then sold for a profit. The profit is gained by the capitalist class because they can make more money by selling what we have produced than we cost to buy on the labor market. In this sense, the working class are exploited by the capitalist class. The capitalists live off the profits they obtain from exploiting the working class whilst reinvesting some of their profits for the further accumulation of wealth."

And with this in mind we can ask the socialist this question, "isn't the worker also a capitalist, as they value their time and effort less than the wage they are paid? If they did not value the wage more than the time or effort they would not work, as in a socialist society, goods are given freely based upon need and taken based upon production, or better said by their economic muse Karl Marx, "From each according to his ability, to each according to his need". This proclaims that no matter how productive you are, your effort is only for the benefit for the others who wish not to work or do not perform as you do. What incentive does that leave to work hard, or even harder? What incentive does that leave to work at all? What incentive does that leave to create, to innovate, or to improve upon goods? If there is no benefit for someone to excel at a good or service it will be done at a minimum speed and quality.


With that being said we can look at the American economy as a partial capitalist economy and a partial socialist economy. There are many areas that the State has complete control over production or service. Roads, Schools, Protection Services, Old Age Insurance are a few of the largest and easiest to see. In that the capitalist is still beholden to government entities in order to start or continue in their business. We can also see THAT is in no way a "free market" system.

The Costs Post 9/11/2001

9/11/2001 around 3,000 people lost their lives in the World Trade Center buildings and the flights used as guided missiles. In the aftermath of the buildings collapsing, the total deaths were recorded at 2,996 people, including the 19 hijackers and 2,977 victims. More would succumb to illness caused by the dust and debris in the months and years afterwards, and we can only speculate on those citizens who died as a result of shock at the unfolding of the atrocities of the day. But these are not the only casualties we can add to this. we can also add in the deaths of service members and civilians from America and those of other nations.

According to the website Journalist's Resource "The Brown University project estimated that together, all countries involved have lost a total of 31,000 uniformed servicemembers and military contractors. In addition, the researchers estimated in 2011 that between 152,280 and 192,550 civilians in Afghanistan, Iraq and Pakistan have died as a “result of the fighting at the hands of all parties.” In March 2013, the Brown researchers revised the civilian total estimate to 200,000; and they estimated that 330,000 people had been killed overall as a result of the conflicts, accounting for all soldiers, militants, police, contractors, journalists, humanitarian workers and civilians involved."

These numbers should do enough to discourage any more operations in the areas, but sadly it does not deter those war hawkish members of the political atmosphere nor a number of citizens from the demolition and destruction of these countries, these people and these futures. 

Lives cost a lot, no one is denying that, but let's take a second to look at the economical impact the past 13 years have taken. According to the CBO (Congressional Budget Office) Total spent and obligated through FY 2014 is around 4,374.5 billion US dollars. (2014 dollars) with the Additional Cumulative Interest on Past Pentagon and State/USAID War Appropriations FY 2001‐2013 by 2054 reaching over 7,900 billion. If you are having trouble with converting that, it is 4 Trillion 374 Billion, 500 Million dollars since 2001 and an estimated 7 Trillion 900 Billion dollars. 

All of this is taken directly from increased borrowing from the US Central Bank with loans being paid back with interest by the US taxpayer. That money is being created with the future payments being ladled with interest and being sworn to your children and grand-children and so on. 

Another aspect of what has been lost since 2001.

The rights and privacy lost since 2001 have been explained by many, from Judge Andrew Napolitano to Former House Of Representative and 2008 and 2012 Presidential candidate Ron Paul, from the leaked document of the CIA, NSA, DOJ, DOD and a host of other alphabet soup agencies by the work of Bradley Manning, Edward Snowden and Julian Assange, who took personal sacrifice for the American citizens to a new level. 

All the new security you see and experience when traveling, paid for by increased taxation. All the new background checks you go through, paid for by increased taxation. The departments themselves, who have been the subject to their own leaks of inter-office behavior, are entirely funded by the same ones they are spying on. Let there be no mistake about it, the notion that you can be 100% ok with the amount of agencies and securities that have increased since 2001 and also hold a belief in the reduction of taxation is entirely erroneous. Let it also be noted that in any attempt to curb this behavior or increasing security state bubble is met with resistance by those who value their sense of safety over their sense of morality or sensibility. Hell they even used the word Patriot to pass an act of protecting themselves while spying on you; ie. Patriot Act. 

Over the years Patriots have risen, but did you even notice?

We have already gone over Snowden, Manning and Assange, all who have given their freedom for your knowledge of the facts of the government you live under. There are more examples of those who have made a stand for a belief in what is moral and right.

The Burger King Corporation recently set itself into a media firestorm. With the acquisition of a foreign (Canada) company, the BK Corp saw to move its Headquarters to Canada to escape higher corporate taxation. Now the media and those unknowingly ignorant of economic sense call this move unpatriotic. But how so? Wasn't the Boston Tea Party a patriotic act, in the same sense to avoid undue taxation, the hypocrisy is almost deafening. 

Cliven Bundy did his patriotic duty in his defiance of federal officials to turn over parts of his land to federal department control in the name of bogus claims of conservation of a certain species. He, along with other resistors in name and spirit spent days holding off Federal Department of Land Management officers as they took to try and take what they wanted of property that had no right to.

So on this Patriots day let's remember those that gave their lives, their freedoms and their blood, sweat and tears for what is morally right, what can be more patriotic than a man who fights a tyrannous, overbearing, overreaching, overburdening Government?