Burlington High School

Burlington, Kansas

Teacher: Devra Parker

America: Is it Capitalism or is it Socialism?

By Jordan Bartholomew

12^th Grade

In the world we live in, there are several different forms of government.  Some are better for the citizens than others.  For example, the current Kim Jong-Il of North Korea is considered by most as a ruthless dictator that is bad for the current citizens.  However, the US is considered one of the great governments of today’s world, but there is still a debate over what type of government we have.  For example, some people think we have a form of government called capitalism that means the production and distribution of goods is owned by a single person or a small group acting as one.  Others think we have a government called socialism that means the making and distributing of goods is collectively owned or owned by the government, which is a mix of capitalism and communism.  I believe the American government highly resembles a socialistic government.

First, the producing and distributing goods is not privately owned like a capitalistic society.  In today’s society most to all of the successful companies are no longer private companies.  They have turned into collectively-owned companies by the invention of the stock market.  This allows people or whoever pleases to own a portion of that company making it collectively owned by many people throughout the country and world.  Because the companies are backed by more people, the government tends to help them along in succeeding.  For example, in my home town we have a very large building that sits on the end of town.  Every few years our local government gives large companies money and tax breaks to get started producing products in our county.  This is a good thing for our economy; however, when one of our own small town businesses begins to struggle because of one bad year, our government just turns its head and looks the other way.  Because the hometown business was smaller, they were less interested in helping it because it would not give them the rewards like the bigger name companies.  Even our local entrepreneurs have a hard time starting new businesses because the government does not see any big benefits of helping them.   I think our government needs to start helping the smaller companies a little more because many of the big companies do not need any breaks to help them.  In fact the bigger companies should be paying the government more rather than less, since they earn more money.

Secondly, the American Government is controlling our economy by regulating the interest rates.  Low interest rates mean buying is high and the economy is doing well.  Higher interest rates slow the economy down and keep people from buying as many big-ticket items.  This is the government’s way of controlling the American economy; thus, they can make the economy do what they think is best.  If the majority of the people in the government think the U.S. citizens are spending too much money then they raise interest rates to slow down the American spending.  In the most severe cases this is control is probably a good ability to give to the government because it could save us from depression or recession; but on normal situations, I do not think the government should have to change anything.  I think they should let the American people decide what will happen with our economy.

Next, the American Government has a power known as imminent domain.  This is a power given to authorities saying that they can take land from a private owner for reasonable amount if a clear and important cause is given.  This highly resembles of a socialistic economy because this gives the government the power to take land for just about anything they can think of.  I do not like the idea of losing my house just because the American government thinks the location would make a great place for a new manufacturing plant.  I have heard about one place near New Jersey where almost 200 families will lose their homes to the building of a pharmaceutical plant.  Not only is the American government taking land, but now they are supporting a single company and they are trying to make changes to the economy.  This idea may be for the better of the economy but is it better for the 200 families that now have to pack everything and watch their homes be destroyed?

Thus, the American form of government resembles socialism more than capitalism.  The United States tends to control the economy more than a normal capitalistic government.  Also, the American society tends to make the collectively-owned companies more successful than the private companies, leading the smaller companies to closing and sometimes bankruptcy.

Answers To Questions Prompted By The Required Reading

Seven Principles of Sound Public Policy
Q1- What does Mr. Reed mean when he says "Equal people are not free."?

Mr. Reed means that there is no where in the world were everyone is economically equal.  He says the only way to make everyone equal, is to hold a gun to everyone’s head.  Then he also goes on to say that even this won’t work because then the people holding the gun will think of themselves as above everyone else.

Q2- What is the deadly trade-off to reliance upon government, according to Reed?

According to Reed, our own government likes to take advantage of us.  Even though we have to obey their rules we still have to make sure what they’re doing is for the good of everyone and not just the good of themselves.

The Calf of Democracy
Q3- Why did the Founding Fathers assure that the United States became a republic rather than a pure democracy?

A pure democracy would have led to a lot of problems because the general public doesn’t always know what’s best for the rest of America.  A pure democracy would lead to Americans voting on everything rather than the items we vote on now.  A republic allows the government to make most of the everyday decisions for Americans rather than making them vote on them.

Q4- What is the saving grace of democracy according to Lawrence Reed?

The saving grace of democracy is the fact that it allows for political change without violence, and it doesn’t matter if the change is for better or worse. 

Freedom Is Not a Doctrine
Q5- Richard Haas gives two unusual reasons for advocating democracy. What are they?
 

One unusual reason he gives is to end tyranny all over the world by spreading democracy.  The other reason is to campaign against terrorism. 

Q6- Give two reasons you personally would promote democracy.
 

I would personally promote democracy for the pure fact that the, to a sense, people get to choose what they want from the government.  Also, Democracy is a great government to prevent one single person from gaining too much power should it be a king or a dictator.  A democracy would allow people to choose who they wanted to rule.

Q7- Comment (any length) on President Bush's current foreign policy.
 

President Bush’s current foreign policy of Pre-emption is a very pro-active approach.  For example, in the War in Iraq, President Bush used his policy of pre-emption to remove a ruthless dictator from power and is currently helping the Iraqi people set up a Democratic government for themselves.  I believe that the policy is a good for the American people if he doesn’t get too involved and spread our troops too thin.

Internet Activities
Visit the Society for Disseminating Economic Knowledge: "New Economic School-Georgia" Georgia was part of the old Soviet Union.

You will find this web site by browsing the Economic Freedom Network and scrolling to "S" for Society.  http://www.freetheworld.com/other.html  On first impression the site may appear amateurish. The English translation may materialized only partially. However it provides a link to a very well done flash presentation. http://www.isil.org/resources/introduction.swf 

Q8- How did you interpret each of the four different hats ("officials with fine hats")?
 

I interpret the hats as the four main kinds of officials that can be in charge.  The first one, the crown, represents a King or Queen as the person in charge.  The second one, the top hat, represents a wealthy person that controls the government.  The third one, the graduation cap, represents a person who is a smart leader.  And the last one, the Bowler Hat, represents somebody who took control using force.

Q9- How did you interpret the megaphone, baby, knife/gun ("No matter how officials are selected")?
 

I interpreted the megaphone as gaining control by popular election.   I thought the baby represented a person who gained control through blood relation like a monarchy.   I interpreted the knife and gun as someone who took control by using force.

Q10- Browse the "Favorite Links" of the Economic Freedom Network http://www.freetheworld.com/other.html and share one of your favorite discoveries with us. Make sure you copy the url. Tell us why you chose it.
 

http://www.cato.org/pub_display.php?pub_id=5109

I chose this website off the cato.org link because it deals with the issue of electing Harriet Miers to the Supreme Court.  I like how the article examines what famous people in the past have said about issues that relate to this topic.

Q11- Once again go to www.freetheworld.com and this time note the question asked near the top of the page: "How much economic freedom exists in your country?" and randomly choose five countries. List the name of each and their highest and lowest year for economic freedom.
 

Q12- Which of your five countries had the greatest degree of economic freedom according to this exercise?

The United States had the largest economic freedom by large with their lowest year matching the highest year of the next closest country.

Q13- What was the summary rating and rank in the year it achieved this degree of economic freedom?
(You can find this information by clicking on the Economic Freedom of the World: 2004 Annual Report and then choosing Chapter 3 and scrolling to your chosen country.)

According to the Annual Report the United States had a summary rating of 8.6 and a rank of 2.

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