We never had Pure Capitalism

A recent Reuters article suggests that capitalism is to blame for the financial crisis. That capitalism is on its deathbed. However the current system in the United States is not pure capitalism.

Pure Capitalism is the voluntary and free exchange of goods and services, a free market so to speak. There is a misconception that, taken as a whole, the type of economic system we have in the United States is capitalism. However, sticking strictly to the definition, the United States, although leaning towards free exchanging of goods and services (and apparently drifting the other direction), does not have a completely free and voluntary market.

We never had Pure Capitalism. The type of economy we have is a mixed market, where business and government collude/collaborate, whether with good intention or ill, meddle in the voluntary and free exchange of individuals, creating a forced monopoly in an industry. A centralized entity has created a forced monopoly, in several industries, for example, education, health insurance, and banking (of which I will detail in further posts.) This is known as state capitalism.

Socialism takes the idea of the mixed economy further, rather than just regulating and/or restricting voluntary and free exchange in the market, it attempts to take matters one step further creating centralized control of the market, for example nationalizing (bailing out) banks. Socialism attempts to plan not only the means and ends of production, but also the means and ends of exchange, namely through control of money. It looks as though the United States is getting closer and closer to Socialism, unfortunately.