After decades of being a verboten ideology, socialism is now being heralded as a solution to the problems of America. Many in the mass media, politicians both old and new, and droves of well known social media personalities have all been vocally in favor of the United States adopting some form of socialism.

For many in America, capitalism just simply doesn’t seem to be working

Capitalism is now under attack by proponents of democratic socialism, the ideological darling which is now popular due primarily to the plight of many millennials and younger people.

I hated red until I found out it was blue

Many young people in America today have grown up with a distaste for an economic system that they view as unforgiving and all-consuming. This perception has been compounded by rapidly increasing wealth inequality, crushing student loans, and dramatic increases in the cost of living.

They are mistaken however if they think that the problem is capitalism

All of the concerns by supporters of socialism are indeed valid. Millions of working Americans continue to struggle to pay for basic and routine expenses, with one in five not able to save any of their annual income. As a result of mounting economic concerns, many young people are now choosing to stay single and childless, while the majority of people under the age of 25 now live with their parents.

For many in America, capitalism just simply doesn’t seem to be working.

Those who have experienced a significant decrease in their economic mobility and social mobility aren’t wrong that something is definitely wrong with America’s economic system. They are mistaken however if they think that the problem is capitalism.

Image by Reimund Bertrams from Pixabay

While capitalism is currently taking the blame for America’s economic problems, America is actually a capitalist mixed economy with elements of corporatism.

Both ideologies are pointing to the other as the cause of social problems, and both are mistaken

The U.S. economic system subscribes to free-market capitalism in that it primarily leaves the means of production in the hands of private ownership, however, the American government enacts many subsidies that change supply and demand, and it also runs a number of publicly owned corporations.

Pure capitalist systems do not control the markets as much as the American government does, and therefore America is not a pure capitalist economy.

Photo by Hieu Vu Minh on Unsplash

Despite popular perception, there is no known historical or modern economy that is either pure socialism or pure capitalism, and all of the existing economic systems in the world currently under democratic governments fall somewhere along the mixed continuum.

A mixed economy is defined as an economic system that blends elements of market economies with elements of planned economies. In most instances, this is a cross between capitalism and socialism, which is actually what the American economic model is today.

One big misunderstanding

Capitalism functions within a market-driven economy where the state does not intervene, thus leaving it up to market forces to shape society and life. In a pure capitalist economy, property and businesses are owned and controlled by individuals, and the production levels and prices of goods and services are determined by how much they are demanded, and how difficult they are to produce.

Socialism is characterized primarily by public ownership of businesses and services, and therefore central economic planning is required in order to make society more equitable. In a socialist economy, the state owns and controls the major means of production, and worker cooperatives tend to have primacy.

American-style capitalism as it is today was actually born from the welfare state

While almost no one is suggesting that America continue with the existing form of American-style capitalism, the two dominant schools of thought that currently have the stage as viable replacements, are democratic socialism and democratic capitalism.

Both ideologies are pointing to the other as the cause of social problems, and both are mistaken.