THE past couple of years have not been private enterprise's finest hour. From the collapse of Lehman Brothers to the implosion of General Motors and Chrysler to BP's oil spill in the Gulf of Mexico, one great firm after another that had boasted of making society richer has turned into an expensive liability for taxpayers at best or, at worst, a menace to the general prosperity or the environment. You might expect this sequence of calamities to have made people sourer towards capitalism and friendlier to the state. But in America, at least, you would be wrong. Americans remain deeply wedded to the free-enterprise system.

Even after the collapse of Wall Street and all that has followed, an overwhelming majority of Americans say in opinion polls that they prefer capitalism to socialism. Gallup found in January that 61% had a positive view of capitalism and about the same percentage had a negative view of socialism. In March last year the Pew Research Centre asked Americans whether they were better off in a free-market economy “even though there may be severe ups and downs from time to time”. Seventy percent answered in the affirmative. Most Americans also say their federal income taxes are too high. Even those who favour higher taxes on the rich think the top rate should be 20% or less.

If Americans will stand behind the free-enterprise system come what may, it makes sense for Barack Obama's opponents to portray the president as a danger to it. “We are facing a ruthless secular-socialist machine that is alien to America's history and traditions,” bellows Newt Gingrich, the hero of the Republican victory of 1994, as he flogs his latest book (“To Save America”). The Republicans are sure to do well in November's mid-terms.

And yet Arthur Brooks, the president of the American Enterprise Institute, thinks defenders of capitalism need to do more. They need, even in America, to remake the moral case for it.

Mr Brooks considers entrepreneurship central to American culture, maybe literally a part of its DNA (thanks to all of those immigrants importing the gene that makes you get up and go). His guess is that the country is divided about 70% to 30% in favour of free enterprise. But he poses an intriguing question. If that is true, how did a politician with as “little regard for free enterprise” as Mr Obama become president in the first place? The answer in his own book (“The Battle”) is that although America is a 70-30 nation in favour of free enterprise, the 30% are firmly in charge.

How could that possibly be? Mr Brooks offers two explanations. The first is that the 30% coalition is led by people with undue influence: rich intellectuals, Hollywood types, media folk and university teachers. Also in the mix that elected Mr Obama are blacks and Hispanics, who trust government more than white Americans do. Second, for all America's faith in capitalism, the economic calamity of 2008 helped the minority fool the majority into thinking that the crisis was caused by the private sector and that the state knew how to solve it. In Mr Brooks's opinion it was the other way round: the state's social engineering (in particular, government support for dodgy mortgages) caused the crisis, and its “remedies” will only make matters worse.

To save capitalism in the years to come Mr Brooks wants to persuade Americans all over again that a free-enterprise system is not only more efficient than socialism but morally superior as well. He has an elegant theory about this. Neither state-engineered equality of income, nor money itself, makes people as happy as their own “earned success in life”, which people are much freer to earn in a system of free enterprise. But both Mr Brooks's subtle approach and Mr Gingrich's unsubtle one suffer from a shared weakness. Where in fact is the evidence that Mr Obama is even remotely a “socialist”?

To stand up this straw man the president's critics recycle the same small crop of incriminating quotations time and again. Mr Obama told Samuel “Joe the Plumber” Wurzelbacher on the campaign trail in 2008 that “when you spread the wealth around, it's good for everybody.” Gotcha! In recent speeches to graduating students he has counselled against materialism and extolled the virtues of public service. More evidence! “That strikes me as exactly the wrong message to send to young people,” huffs Mitch Daniels, the governor of Indiana and a Republican presidential might-wannabe. Please. Platitudes like these have been the stuff of commencement speeches from time immemorial.

There is no master plan

Government has expanded on Mr Obama's watch. His administration is spending $1 trillion on economic stimulus, has propped up two of the big three car firms instead of letting them implode and introduced a far-reaching reform of health care. Whatever you think of the merits of the first two decisions it takes a peculiar mixture of amnesia and paranoia to see them as a master plan to turn America socialist, rather than as a series of ad hoc responses to the exigencies of the crisis Mr Obama inherited. As for the third, it is a funny socialism that gives private, for-profit insurance firms the main responsibility for delivering health care.

The American right misses Mr Obama's real flaw. He is not a “socialist”; but he does not understand business. As even Democrat-leaning CEOs complain, he neither expresses enough appreciation of capitalism nor shares the wavelength of those who practise it. Bosses are ushered in for photo-calls and then ignored. It is one thing to seek redress from BP, another to vilify it as an alien invader. He is interested in economics and technology; but not in how you make money. That coolness is a weakness; but it takes a lot more than indifference to destroy America's spirit of capitalism. Big government and free enterprise have co-existed productively in America since the second world war. Most Americans expect that to continue, and it almost certainly will.





Economist.com/blogs/lexington