Читать книгу Keeping the Republic - Christine Barbour - Страница 26

Capitalism is a procedural economic system based on the working of the market—the process of supply and demand. In a pure capitalist economy, all the means that are used to produce material resources (industry, business, and land, for instance) are privately owned, and decisions about production and distribution are left to individuals operating through the free-market process. Capitalist economies rely on the market—the process of supply and demand—to decide how much of a given item to produce or how much to charge for it. In capitalist countries, people do not believe that the government is capable of making such judgments; they want to keep these decisions out of the hands of government and in the hands of individuals, who they believe know best about what they want. The most extreme philosophy that corresponds with this belief is called laissez-faire capitalism, from a French term that, loosely translated, means “let people do as they wish.” The government has no economic role at all in such a system. However, no economic system today maintains a purely unregulated form of capitalism, with the government completely uninvolved.

capitalist economy an economic system in which the market determines production, distribution, and price decisions, and property is privately owned

Like most other countries today, the United States has a system of regulated capitalism. It maintains a capitalist economy, and individual freedom from government interference remains the norm, but it allows government to step in and regulate the economy to guarantee individual rights and to provide procedural guarantees that the rules will work smoothly and fairly. Although in theory the market ought to provide everything that people need and want, and should regulate itself as well, sometimes it fails.

regulated capitalism a market system in which the government intervenes to protect rights and make procedural guarantees

procedural guarantees government assurance that the rules will work smoothly and treat everyone fairly, with no promise of particular outcomes

The notion that the market, an impartial process, has “failed” is a somewhat substantive one—it is the decision of a government that the outcome is not acceptable and should be replaced or altered to fit a substantive vision of what the outcome should be. When markets have ups and downs—periods of growth followed by periods of slowdown or recession—individuals and businesses look to government for economic security. If the market fails to produce some goods and services, like schools or highways, individuals expect the government to step in to produce them (using taxpayer funds). It is not very substantive—the market process still largely makes all the distributional decisions—but it is not laissez faire capitalism, either.