The United States is often referred to as the ‘father’ of capitalism due to its campaigns for the economic system. In a capitalist economy, factors of production such as land, capital, entrepreneurship, and labor are majorly owned and controlled by private investors (Hall 3). Experts consider the inception of capitalism into the United States as one of the contributors to its economic success, which has made it the largest economy in the world (Acemoglu and Robinson 6). Although capitalism is concentrated in the West, socialist and communist countries such as China have begun to embrace some aspects of capitalism, albeit at an arguably low pace (Acemoglu and Robinson 6). In general, numerous research studies have linked capitalism with economic growth and prosperity (Acemoglu and Robinson 4). However, going by the recent ranking of the US as the 19th ranking country begs the question of whether pure capitalism works or an amalgamation of capitalism and socialism could solve the problem.
Capitalism is all about giving entrepreneurs the freedom to do their businesses. While private ownership is prioritized, the influence of the government and the local political environment shapes the outcome of capitalist economies (Mazzucato 17). In the United States, for example, racial capitalism is one of the drivers of inequality. Minority groups in the country are poorer than their Caucasian counterparts due to unequal opportunities in the business field (George 10). Capitalism does not provide a level playing ground in the ownership of properties such as land. As a result, rich entrepreneurs dominate businesses, and the poor have a low disposable income to afford some of the luxury enjoyed by the rich (Dufour and Orhangazi 470). This has widened the gap between the rich and the poor around the world to the extent that much of the global wealth is controlled by a few billionaires. It follows, therefore, that capitalist states such as the US have many unhappy people.
The tussle for limited resources has led to violence in the United States and other parts of the world. For example, the rivalry between African Americans and whites led to the emergence of movements such as “Black Lives Matter” to advocate for equal economic progress (Melamed 79). Consequently, racial tensions have increased even further. This implies that some level of government control on factors of production could be necessary. Looking at countries such as China, Japan, and Korea where socialism is embraced more than capitalism gives some insight into the sustainability of capitalism. In the two countries, the role of the government is to ensure there is equality in the distribution of national resources (Melamed 79). As such, the government determines who owns what under what conditions. Nevertheless, there is a sense in which socialism does not foster political democracy and freedom of ownership, values that are revered in the United States.
In summary, capitalism in the United States seems to be unsustainable. Although the country’s economy is the largest in the world, economic performance does not translate into living standards. Research findings indicate that a combination of socialism and capitalism works in improving the livelihoods of normal citizens. In addition, it will enhance government involvement in the economic affairs of the country reduce inequality and conflict that emanate from capitalist markets. Whereas it is worth merging the two economic systems, the democracy of the United States should not be compromised. Nevertheless, studies should be conducted to consider the viability of some aspects of socialism in the United States.
Acemoglu, Daron, and James A. Robinson. “The Rise and Decline of General Laws of Capitalism.” Journal of Economic Perspectives, vol. 29, no. 1, 2015, pp. 3-28.
Dufour, Mathieu, and Özgür Orhangazi. “Capitalism, Crisis, and Class: The United States Economy After the 2008 Financial Crisis.” Review of Radical Political Economics, vol. 46, no. 4, 2014, pp. 461-472.
George, Jennifer M. “Compassion and Capitalism: Implications for Organizational Studies.” Journal of Management, vol. 40, no. 1, 2014, pp. 5-15.
Hall, Peter A. “Varieties of Capitalism.” Emerging Trends in the Social and Behavioral Sciences: An Interdisciplinary, Searchable, and Linkable Resource, vol. 2, no. 4, 2015, pp. 1-15.
Mazzucato, Mariana. The Entrepreneurial State: Debunking Public vs. Private Sector Myths. Anthem Press, 2015.
Melamed, Jodi. “Racial Capitalism.” Critical Ethnic Studies, vol. 1, no. 1, 2015, pp. 76-85.