A mixed economy is when Republicans and Democrats reach an unspoken, silent agreement. The silent agreement is as follows. Republicans don’t want socialism. At the same time, they’re terrified of endorsing principles such as freedom, individual rights and capitalism. Democrats are not afraid of principles such as collectivism and group responsibility elevated above individual rights. However, they want to win elections above all else, and principled socialism has never sold very well in the USA.
How do they resolve this “problem”? When there’s a crisis in the economy (for example: health care, prescription drug prices, utilities, stock market fraud) brought about by the inability of capitalism to function (due to all the government controls in the mixed economy), Republicans agree to maintaining private, for-profit businesses in exchange for ever more controls imposed by the Democrats on private enterprise.
Each side “wins” in this arrangement. Republicans get to say, “See? We stopped the Democrats from imposing socialism on you.” The reality, of course, is that they brought us ever closer to socialism because of the additional government controls. Democrats get to say, “See? We stopped short of doing what we wanted to do (that is, totally have the government take over some economic function), and it’s still not working. In fact, it’s getting worse. It’s the fault of capitalism and the Republicans.” Democrats never have to take responsibility for the failures of partial socialism since, with Republican help, they stop short of legislating full socialism.
The arrangement has served each party well for decades, into the present moment. Clearly, the Republicans get the short end of the stick, but the Republicans don’t have nearly the spine of the Democrats. The question is this: what happens once we achieve full socialism? Who accepts the blame and who takes the credit when everything starts to collapse economically?
If you sense that each party is dishonest and wrong, then you are right. However, the fact that each party is dishonest does not prove that both sides — socialism and capitalism — are wrong. It only shows that socialism needs capitalism to compromise itself into accepting partial socialism. When partial socialism fails, then capitalism gets blamed. The result is that sooner or later we get still more socialism.
Consider Medicare. It failed way beyond what critics predicted back in the 1960’s. It’s past the point of bankruptcy and has hampered if not ruined medical care by bringing government bureaucracy and hyper-regulation to this important field. Yet the solution of our present conservative government is to expand Medicare benefits by granting “free” prescription drugs to the elderly population. Socialism is failing and Republicans propose more socialism in order to save what they keep calling capitalism.
Genuine, unfettered capitalism advances human life and, when consistently practiced, lets human beings keep the products of their own efforts. It is fair because it allows people to keep what is morally theirs, whether it’s $1 or $1 billion. It is practical because private ownership and the profit motive encourage personal responsibility, innovation and competence. Capitalism never won because it never was given a chance. The folly of today is that most people think capitalism won — which in theory, it probably did. But in practice we still have more socialism than not.
So what next? The coming years will tell. The current economic stagnation may be an indication that our mixed economy is slowly collapsing into the economic paralysis of all out socialism. Only more capitalism, not more socialism, will save us. We need aggressive action in favor of making capitalism legal again. A few tepid tax cuts, phased in over the next decade or two, won’t be enough to save us (nor, quite possibly, George W. Bush’s presidency in 2004). The question is: do any of our political leaders realize all this? If so, do they have the courage to say so?
