It seems to me the government began "socializing" our economy with the funding of the Transcontinental Railroad. As time progressed towards 1930, the government, on its own political will, interfered more and more with the economy. The ICC predates 1900. Progressives professed that a team of expert (unelected) bureaucrats would be the best way to "run" America. Woodrow Wilson was
a firm believer in progressive values. Hoover's government policies are pretty widely blamed for the great depression. FDR continued them in 1933 and only later in his first term did he change his position. The Fed was created to prevent depressions and it failed miserably.
Over America's history there are only a few government spending programs or regulations, that on the whole have helped all of America -- Social Security and Medicare/Medicaid/Indian_Health_Services/VA notwithstanding.
I don't believe "Capitalism" is a well defined system. It is a natural byproduct (side effect) of certain policies (e.g. natural rights).
This is a great article, to actually get capitalism and socialism to hold hands and do-si-do together. One quibble, the St. Louis Fed data shows government net outlays ranging around 20% of GDP since the early 1950, with a small spike during the Great Recession and a bigger one during covid but only to a bit more than 30% and rapidly declining below 25% since 2020. Am I reading this wrong?
It always cracks me up when some people comment that we need a "free market." There's never been such a thing. Politics and ideology are inseparable from the economic sphere. Unfortunately, the political aspect of the political economy has been hijacked not for the good of most of the people but for the benefit of a very few. The system is as skewed as it was in the gilded age or the 1920s.
We need a democratic approach to the economy but unfortunately, as Clara Mattei points out in her masterful book "Austerity" economists have undermined democratic approach to the economy by claiming technocratic status- and we see what that got us in 2008-2009 for example
Perhaps there is a rule of law that prevails in explaining physical systems and political/economic systems created by humans. What appears to be a stable system can quickly fall apart as some disturbing element enters the dynamics and produces disastrous results. The example of the harmonic disruption from the wind gusts that swept over the Tacoma Narrows was a good one. In the field of cognitive psychology the famed student of human thought, Jerome Bruner had done a lot of work explaining how a person's beliefs will change if the system is confronted with an anomalous element. Initially the shock may not take hold but it just might be enough to produce major changes in the original belief system. The transition he argued can be unsettling.
It seems these tensions exist in our political economy as well. Your discussions on the nature of democracy or moral stances are places where these tensions prevail and produce a great deal of anxiety and personal angst before stability returns. The tensions over capitalism and socialism has been central to the economies of nations over the last century. Your overview sets out these tensions and economic dislocations that that were repeated in the many depressions America experienced. The challenges these times presented did lead to a new form of political economy particularly following the great Depression of the 1930s. The U.S. now seems to be confronting a similar state as is China as well. If I recall historians used the term Thermidor (also used in the physics of energy) to describe the swinging movements from revolutionary or radical political and economic positions of intense turmoil to a more conservative government position. There always seems to be the movement from chaos to stability.
So good of you to always draw in the thinking of the founding fathers to reveal the struggles these people had in their thinking about these kinds of tensions in history. Jefferson to me captured these dilemmas in trying to find an adequate form of government. Your books are valuable in helping us see this.
I know you have had tours of duty on both the campuses in College Station and here in Austin.
The correlation between harmonics of different materials and different economic/political systems is intriguing.
Your current essay came across my desk this Sunday morning as did an article on espn.com stating that “reliable” sources have reported that the Board of Regents at Texas A & M was meeting to contemplate the firing of football coach Jimbo Fisher at a contract buyout price of $77 million.
I don’t know whether it is true or not.
I firmly believe that what happens will depend on the price of West Texas Sweet Crude from the Permian Basin.
I have always thought that the magic number to keeping in power the regimes in the likes of Venezuela, Russia, Saudi Arabia, and Texas A&M was West Texas Sweet Crude at $100 a barrel because of the commitments those regimes had made out of those revenue streams to support the other programs on which their legitimacy was based.
In Venezuela, Russia, and Saudi Arabia, that was a minimum price below which civil unrest would eventually rise up to smite those that wield the power of government. In the Aggie Nation that is the minimum price above which those good West Texas Aggies would have enough surplus capital to rid the Nation of Jimbo.
And since politics and economics are always intertwined, isn’t this reality the real difference between socialism and capitalism?
The WTI connection between Vladimir Putin keeping his job and Jimbo Fisher losing his had not occurred to me. But it's intriguing, and a reminder what a crazy world we live in.
Bravo. So much of the intricacies of currency creation & flow, ‘invisible hands’ mucking about in the ‘pure system’ and Capitalists preening about wanting things ‘back to the way things were’. It’s all blurry nonsense. Great points
It seems to me the government began "socializing" our economy with the funding of the Transcontinental Railroad. As time progressed towards 1930, the government, on its own political will, interfered more and more with the economy. The ICC predates 1900. Progressives professed that a team of expert (unelected) bureaucrats would be the best way to "run" America. Woodrow Wilson was
a firm believer in progressive values. Hoover's government policies are pretty widely blamed for the great depression. FDR continued them in 1933 and only later in his first term did he change his position. The Fed was created to prevent depressions and it failed miserably.
Over America's history there are only a few government spending programs or regulations, that on the whole have helped all of America -- Social Security and Medicare/Medicaid/Indian_Health_Services/VA notwithstanding.
I don't believe "Capitalism" is a well defined system. It is a natural byproduct (side effect) of certain policies (e.g. natural rights).
Ed Bradford
Pflugerville, TX
This is a great article, to actually get capitalism and socialism to hold hands and do-si-do together. One quibble, the St. Louis Fed data shows government net outlays ranging around 20% of GDP since the early 1950, with a small spike during the Great Recession and a bigger one during covid but only to a bit more than 30% and rapidly declining below 25% since 2020. Am I reading this wrong?
The St. Louis Fed data set (https://fred.stlouisfed.org/series/FYONGDA188S) tracks federal spending. State and local boost the total. This from the US Bureau of Economic Analysis: https://tradingeconomics.com/united-states/government-spending-to-gdp.
Got it. Thanks!
It always cracks me up when some people comment that we need a "free market." There's never been such a thing. Politics and ideology are inseparable from the economic sphere. Unfortunately, the political aspect of the political economy has been hijacked not for the good of most of the people but for the benefit of a very few. The system is as skewed as it was in the gilded age or the 1920s.
We need a democratic approach to the economy but unfortunately, as Clara Mattei points out in her masterful book "Austerity" economists have undermined democratic approach to the economy by claiming technocratic status- and we see what that got us in 2008-2009 for example
Perhaps there is a rule of law that prevails in explaining physical systems and political/economic systems created by humans. What appears to be a stable system can quickly fall apart as some disturbing element enters the dynamics and produces disastrous results. The example of the harmonic disruption from the wind gusts that swept over the Tacoma Narrows was a good one. In the field of cognitive psychology the famed student of human thought, Jerome Bruner had done a lot of work explaining how a person's beliefs will change if the system is confronted with an anomalous element. Initially the shock may not take hold but it just might be enough to produce major changes in the original belief system. The transition he argued can be unsettling.
It seems these tensions exist in our political economy as well. Your discussions on the nature of democracy or moral stances are places where these tensions prevail and produce a great deal of anxiety and personal angst before stability returns. The tensions over capitalism and socialism has been central to the economies of nations over the last century. Your overview sets out these tensions and economic dislocations that that were repeated in the many depressions America experienced. The challenges these times presented did lead to a new form of political economy particularly following the great Depression of the 1930s. The U.S. now seems to be confronting a similar state as is China as well. If I recall historians used the term Thermidor (also used in the physics of energy) to describe the swinging movements from revolutionary or radical political and economic positions of intense turmoil to a more conservative government position. There always seems to be the movement from chaos to stability.
So good of you to always draw in the thinking of the founding fathers to reveal the struggles these people had in their thinking about these kinds of tensions in history. Jefferson to me captured these dilemmas in trying to find an adequate form of government. Your books are valuable in helping us see this.
Prof. Brands-
I know you have had tours of duty on both the campuses in College Station and here in Austin.
The correlation between harmonics of different materials and different economic/political systems is intriguing.
Your current essay came across my desk this Sunday morning as did an article on espn.com stating that “reliable” sources have reported that the Board of Regents at Texas A & M was meeting to contemplate the firing of football coach Jimbo Fisher at a contract buyout price of $77 million.
I don’t know whether it is true or not.
I firmly believe that what happens will depend on the price of West Texas Sweet Crude from the Permian Basin.
I have always thought that the magic number to keeping in power the regimes in the likes of Venezuela, Russia, Saudi Arabia, and Texas A&M was West Texas Sweet Crude at $100 a barrel because of the commitments those regimes had made out of those revenue streams to support the other programs on which their legitimacy was based.
In Venezuela, Russia, and Saudi Arabia, that was a minimum price below which civil unrest would eventually rise up to smite those that wield the power of government. In the Aggie Nation that is the minimum price above which those good West Texas Aggies would have enough surplus capital to rid the Nation of Jimbo.
And since politics and economics are always intertwined, isn’t this reality the real difference between socialism and capitalism?
The WTI connection between Vladimir Putin keeping his job and Jimbo Fisher losing his had not occurred to me. But it's intriguing, and a reminder what a crazy world we live in.
Bravo. So much of the intricacies of currency creation & flow, ‘invisible hands’ mucking about in the ‘pure system’ and Capitalists preening about wanting things ‘back to the way things were’. It’s all blurry nonsense. Great points