Faced with the worst economic conditions since the Great Depression, President Obama has forged his recovery plan around large-scale government intervention and spending in the private sector. Critics of the President’s plan have dubbed it the end of capitalism, accusing Mr. Obama of pushing a socialist agenda. But are their criticisms founded, or is it just rhetoric aimed at criticizing the President’s policies?
What is Socialism?
First it is important to actually know what makes a country truly Socialist. Webster’s Dictionary defines socialism as “any of [the] various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods”. In lay terms, that means that in a socialist country there is no such thing as private property.
This is clearly not the case in the United States today. With the exception of a few failed banks, the U.S. government does not control any institution charged with the production or distribution of goods. But even with the nationalized, failed banks, the government does not intend on controlling them for long. So why then is there so much fear over President Obama’s economic recovery strategy?
Socialism vs. Capitalism
In Socialist nations, there is no need for the government to bailout individual industries because the government, in fact, controls all production within the state. However, many have accused the Obama administration of pushing a socialist agenda by bailing out financial institutions in return for a stake in the companies. These critics further their arguments by saying that the government has no business intervening in a free market, capitalist society.
Pure capitalism, however, is an economic system without any form of rules or regulations governing economic activity, and that is clearly not a viable option in today’s world. In fact, the lack regulations and oversight is at the root of the current economic crisis. Capitalism, like democracy, needs a form of checks and balances to ensure it operates smoothly and fairly. In the case of America, a failure of these checks calls for government intervention to restore confidence and foster a speedy recovery.
So What Shall We Call It?
Although the future of America’s economy is uncertain, most Americans do not foresee, nor would they allow America to become a socialist nation. What is certain, however, is that the current policies of the Obama administration in no way reflect the literal meaning of the word socialist. In fact, the government’s actions can be more accurately defined as investing, much like what stock traders do every day over the NYSE, only on a much larger, more controversial scale.
References:
Merriam Webster’s Online Dictionary
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