Does the US have a managed economy

rogerhb

One of the claims against socialism/communism is the idea of a managed economy, that a top-down management of an economy is in-efficient and not dynamic.

So can you honestly claim that the US does not have a managed economy? However, alas, the economy is not managed for the benefit of the masses, or even the nation, but for the rich. Additionally it's not managed compentently.

Discuss, disprove, rant, whatever...
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jaws · Light Sweet Crude Joined: Apr 24, 2005 Posts: 1257

There aren't really any truly free market economies in the world right. There are economies where the government intervenes a little and economies where it intervenes a lot. Americans like to pretend that they live in a free market country because the rampant government intervention is hidden by the bureaucratic and institutional maze the country is administrated with. Since people can't tell how things are run, they assume that they aren't. People with the right connections who understand how the system works pull the strings in their own direction whenever they get the chance.

rogerhb · Last edited by rogerhb on Tue Oct 04, 2005 8:36 pm; edited 1 time in total

So nobody want's to deny that the stockmarket is being propped up artificially, or gold depressed artificially?

Glad that's all settled then.

edit: oooh - post crossed within 60 seconds, we have a reply.
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"Complex problems have simple, easy to understand, wrong answers." - Henry Louis Mencken

rogerhb

Cool.

MicroHydro · Light Sweet Crude Joined: Apr 10, 2005 Posts: 1286

Mismanaged would be a better term.
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bobcousins

It's one of those questions I wonder about. Does the government really have significant influence over the economy, or do they just tinker while the economy goes through natural cycles?

Mrs Thatcher made a lot of changes to public policy, notable privatisation, but did that really change much? We enjoyed an economic boom at the same time as the rest of world, and recession at the same time. Attempts to prop up the exchange rate failed spectacularly, the government was beaten by private speculators. Tax cuts for the rich make headlines, but the actual amount of money is tiny.

On the flip side, some policy changes do have significant effects, for example, the removal of exchange controls caused money to hemorrhage out of the UK; removing restrictions on credit helps the consumer credit boom.

So I believe that the government only has influence where there are underlying forces supporting what they are trying to do, trying to go against the flow is fairly futile.

The question why people vote against their economic interests is an interesting one. I think the answer is that you don't need to out run the tiger, but you need to run faster than the guy next you. Logically it would be best if everyone cooperated, and shared equally. In practice, whenever you introduce a possibility that you can gain an advantage over rivals, then people compete to get to the top. Everyone playing this game wants to keep the differential, because if they get to the top it would benefit them. Of course, most people stay poor, but that does not deter them. Experiments on human subjects have demonstrated this in laboratory situations.
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nuhax · Tar Sands Joined: Jun 18, 2005 Posts: 62

The central tenet of socialism is that the means of production are not privately owned, but owned by a collective body (the government). This is what is usually meant by the term "managed economy".

From Wikipedia:"The means of production are physical, non-human, inputs used in production. This includes factories, machines, tools and materials, along with both infrastructural capital and natural capital - in other words, the classical factors of production minus financial capital and minus human capital or labor."

In the USA the means of production are mainly private owned. The US government is a big customer and influences a lot of industries but it's not anywhere near a socialist system under the standard definition of socialism.

I'm all for less government intrusion than we currently have but I think it's a huge stretch to say the US is socialist. I'm more worried about excessive enviromental regulation preventing energy independence, healthcare nationalization, surveillance/reduced privacy laws etc. will eventually lead to a more socialist country.

jaws · Light Sweet Crude Joined: Apr 24, 2005 Posts: 1257

"Private ownership" of capital is necessary but not sufficient to have a free economy. In the U.S. the vast majority of the economy is privately owned, however the government regulates so many industries that the liberty of action that you have with your property is very restricted. If the government can tell you how to run your business, you don't really own it. They own it.

Take a corporation like Lockheed Martin. In theory it is a public corporation owned by its shareholders. However its products are weapons and its only client is the U.S. military. If Lockheed wants to export weapons to other countries it has to get approval from the U.S. government first. Its products are also designed by request of the U.S. military command. It is by all standards a government business that for some unfathomable reason has private shareholders.

clifman

nuhax - I'm more worried about excessive enviromental regulation preventing energy independence...

Actually, more stringent environmental regulation and energy independence go hand-in-hand. Reduced emissions means incentives for efficiency - doing more with less - and curtailment - reducing wasteful use (leaving lights on, driving a 3-ton SUV to the gym to take a 3k walk on a treadmill). It also means incentives for investing in sustainable alternatives - wind (now the cheapest form of new electric generation), solar, biomass (with a careful eye to EROEI - no corn ethanol!) etc. We cannot drill, and dig our way to energy independence.

GoIllini · Intermediate Crude Joined: Mar 05, 2005 Posts: 573

rogerhb

GoIllini · Intermediate Crude Joined: Mar 05, 2005 Posts: 573