A "mixed economy" is another way of saying "capitalism." For all practical purposes, "socialism" and "communism are the same exact thing. There are no others.
A "mixed economy" has two poles with a purely competitive market like that envisioned by Adam Smith at one end and a single seller operation like the Post Office at the other. In between you find oligopolistic concerns like Microsoft or Google that dominate their respective niches because of their size and political clout. Additionally, socialism and communism differ fundamentally in that one argues from each according to his abilities to each according to his work, versus from each according to her abilities to each according to her needs. You have every right to your own opinions, but not to your own facts.
Left-wingers like you will call a mixed economy "capitalist" when arguing one point, and call it "socialist" when arguing another point. All economies are on the "free enterprise<---------->command economy" continuum. The only real difference between "socialism" and "communism" is how serious the supporters are about putting their agenda into practice. You can't have real socialism without expropriating private property and that always gets real messy and ends up meaning a lot of people get shot. So if people are not real dedicated socialists, they halt the process of converting to real socialism long before that point and end up with a mixed economy.
Mixed economy
The closest twin we have in America today to the communists and Marxists in Russia are the 'Marketists'; conservatives, libertarians and 'free marketeers' who have turned government non-intervention and 'laissez faire' into a religion. It has created 'malaise faire'
Blind Faith
For a country that has prided itself on its resourcefulness, the inability to address our problems suggests something deeper at work. There is something, powerful but insidious, that blinds us to the causes of these problems and undermines our ability to respond. That something is a set of beliefs, comparable to religious beliefs in earlier ages, about the nature of economies and societies. These beliefs imply the impropriety of government intervention either in social contexts (libertarianism) or in economic affairs (laissez faire).
The faithful unquestioningly embrace the credo that the doctrine of nonintervention has generated our most venerated institutions: our democracy, the best possible political system; and our free market economy, the best possible economic system. But despite our devotion to the dogmas that libertarianism and free market economics are the foundation of all that we cherish most deeply, they have failed us and are responsible for our present malaise.
The pieties of libertarianism and free markets sound pretty, but they cannot withstand even a cursory inspection. Libertarianism does not support democracy; taken to an extreme, it entails the law of the jungle. If government never interferes, we could all get away with murder. Alternatively, if the libertarian position is not to be taken to an extreme, where should it stop? What is the difference between no government and minimal government? Attempts to justify libertarianism, even a less than extreme position, have failed. Laissez faire, or free market economics, characterized by minimal or no government intervention, has a history that is long but undistinguished. Just as the negative effects of a high fever do not certify the health benefits of the opposite extreme, hypothermia, the dismal failure of communism, seeking complete government control of the economy, does not certify the economic benefits of the opposite extreme, total economic non-intervention.
It may seem odd, given the parabolic arc of our financial markets and the swelling chorus of paeans to free market economics, but despite the important role of the market, purer free market economies have consistently underperformed well-focused mixed economies. In the latter part of the nineteenth century the mixed economies of Meiji Japan and Bismarcks Germany clearly outperformed the free market economies of Britain and France. Our own economy grew faster when we abandoned the laissez faire of the 1920s and early 1930s for the proto-socialist policies of Franklin D. Roosevelt. It has become increasingly sluggish as we have moved back to a purer free market. Data of the past few decades show that our GNP and productivity growth have lagged those of our trading partners, who have mixed economies characterized by moderate government intervention.
The persistently mediocre track record of laissez faire casts doubt on the claim that an economy free from government interference invariably maximizes the wealth of society. In fact, there are sound reasons the pure free market must underperform well-focused mixed economies.
But despite laissez faires mediocre track record and despite powerful arguments that it cannot possibly provide what it promises, the notion of the unqualified benefit of the free market has become deeply embedded in our mythology. Apologists have exulted in claims that glorify free market mythology at the expense of reality, and also at the expense of society. Free market principles, even though they have failed in economics, have been eagerly applied to sectors ranging from politics to education, where they have contributed to societal dysfunction.
One politically popular myth, that free market economics and government non-intervention provide the basis for true democracy, flies in the face of history.
As we moved toward an ideology driven 'free market' ONLY belief economically, and away from a mixed economy, the results have been disastrous.
Over the past half-century we have seen lower tax rates and less government interference. We have come a long way toward free enterprise from the proto-socialist policies of Franklin D. Roosevelt. Since the Kennedy Administration we have reduced the marginal tax rate on our highest incomes from the 91% that remained in effect from the 1940s into the mid-1960s (and a brief peak of 94% during World War II) to 28% in the 1986 tax code. Yet our economic growth has slowed.
Decade/Average Real GNP/per Capita GNP Growth
1960-1969 4.18% 2.79%
1970-1979 3.18% 2.09%
1980-1989 2.75% 1.81%
1990-1994 1.95% 0.79%
(Maddison, Monitoring the World Economy 1820-1992 p. .183, 197)
Despite our adoption of the most enlightened free market policies, our performance resembles that of a declining Great Britain in the late nineteenth century.
Free market apologists contend the closer we come to pure laissez faire, the better. But there is little evidence for even this position. The U.S. has come closer to laissez faire than most other countries, especially since the Reagan Administration. If free market policies are the best economic policies then we should have experienced the most robust growth in the world during this period. But this has not happened. We have been outstripped by our trading partners.
Myths Of The Free Market
The great enemy of truth is very often not the lie deliberate, contrived and dishonest but the myth persistent, persuasive, and unrealistic. Too often we enjoy the comfort of opinion without the discomfort of thought.
President John F. Kennedy
