Applied Anthropology

Does the United States practice pure capitalism?
Answered by Discovery Channel
  • Discovery Channel

    Discovery Channel

  1. Technically, no -- the U.S. does not practice pure capitalism. In fact, like many nations, the United States has a mixed economy that falls somewhere between capitalism and socialism. You see this in your paycheck -- the government makes your employer take out a percentage for Social Security. And in the case of minimum wage jobs, understand that the federal government is responsible for that legally enforced pay scale – without it, workers could be paid less.

    There are lots of other examples of the government stepping in and tinkering with the economy as well; you'll see governmental influence in a whole host of social welfare and healthcare programs, as well as many other aspects of American life. For example, the federal government regulates taxes, adjusts interest rates and provides unemployment benefits. It also sets tariffs on some foreign products, subsidizes some U.S. industries and manages allocation of broadcast and communications frequencies -- not to mention providing tax breaks for charitable donations and overseeing how businesses participate in politics.

    The president's role in steering the economy is oblique but essential. The president is required to present a national budget -- subject to congressional approval -- which details the funding for legislation to be carried out, for services and programs, for the military and more. Balancing the budget may require introduction of legislation to modify tax rates (for both businesses and private citizens) and to regulate import and export tariffs. These changes can affect everyday life by increasing or decreasing incomes and the cost of living.

    In times of economic crisis, the president may use his or her power to encourage Congress to pass legislation for job creation, federal bank loans and other measures to improve the situation. The president also affects the economy by making appointments to the Federal Reserve Bank, the Treasury Department and, to a certain extent, every department and agency. As the U.S. remains the world's most economically influential country, the actions of its leaders in all facets of its government affect banks, businesses and consumers in every country on Earth.

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