There can be some confusion in America if America is both a Capitalist and a Socialist. Even I was confused if America was considered a capitalist and socialist country.
America is considered both a capitalist and socialist economy; America is deemed to have a mixed economy which means it has both capitalism and socialism characteristics. Having a mixed economy in America is essential because there are some things that we need the government to intervene with on behalf of the public good.
America Is Both Capitalist And Socialist
America is considered both a capitalist and socialist country; America is known to be a mixed economy. The United States is regarded as a mixed economy because the United States has characteristics and features that show both capitalism and socialism features in the economy.
Investopedia said it best when they referred to the United States as a mixed economy when they said:
The United States is considered a mixed economy because America believes in complete economic freedom but will also look at what is considered “for the goodwill of society.”
Pure Capitalism Or Free Market System And America
Many people are surprised to discover that the United States does not have pure capitalism but is considered a mixed economy. The United States government has always played a unique role in the nation’s economic affairs.
The United States has many services under the government and not the private section. Many parts of the economy have moved under government control over time.
To be considered pure capitalism or a free market system would mean that individuals are entirely uncontrolled in their economic behaviors or actions. In other words, in pure capitalism the government would give free range for all economic activities.
Investopedia defines the free market as:
In the United States, some government regulations take place; there are controls placed on individuals and economic decisions they can make. Because of this, the United States is considered a mixed economy and not a pure free market economy.
Here are a few aspects of a free-market economy:
- A true and free market requires that all property be owned by private individuals and all services be provided privately.
- Prices would fluctuate according to the supply and demand principles of economics.
- Transactions would be voluntary and not compelled or restricted by the government; in other words, it would be a totally free kind of economic system.
For example, the United State Post Office is owned and operated by the United States government. The U.S. Postal Service (USPS) is an extensive business that the federal government operates.
The USPS has over 60,000 employees and more than 70 billion in annual revenue. The USPS is not operated by an individual or corporation but by the Federal Government.
The United States Post Office is set up for the good of the entire country and not for one corporation or individual. The USPS is an example of a profit making venture that the United State government runs and operates.
Why The United States Is Considered A Mixed Economy
The fact the United States is considered a mixed economy can be shocking for many Americans. We were raised feeling that we should see ourselves as entirely capitalist with a free-market economy.
But the reality is that the United States has both capitalism and socialism tendencies; the socialism tendency also serves the purpose of helping Americans or for the greater good of society as a whole.
Here are some facts about the U.S.Economy:
- The United States economy shows characteristics of both capitalism and socialism or what is known as a mixed economy.
- The principle of a mixed economy is that the United States embraces economic freedom regarding how capital is used. But the government has the right to intervene when the government’s intervening is considered for the public good.
- The government will control parts of the economy with restrictions and licensing requirements, including education, roads, hospital care, post office, courts, and other aspects of our economy.
- In a mixed economy, the government also has roles in financial policies, including monetary and other fiscal policies.
In a mixed economy, there are many goods and services that the government may need to control or partially control for the good of the entire community or individuals.
The United States government will help give some subsidies such as for farmers, oil companies, financial companies, and utility companies.
The government may also put limits on certain types of goods or services. For example, in the United States, road work is handled at a government; medical emergencies services and the Fire Department are also under government controls.
The U.S. Government may decide to tax a particular product to discourage its product use; all of these goods and services would be done for the public good or for society.
Being a mixed economy for America works for our system and values; we are not an actual socialist state, nor are we a true free-market economy, but we are a mixed economy. Most Americans value the services that the United State government supplies, such as the roads we drive on or the post office that helps to send our packages.
Having characteristics of capitalism and socialism of a mixed economy helps the American public and is for the public good.
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