American Enterprise Institute: 'The Business of Society' – Capitalism, Socialism, and the American Founding

WASHINGTON, May 7 -- The American Enterprise Institute issued the following report on May 7:

Introduction

Lately, socialism seems to be fashionable in the United States. In the Super Tuesday elections held in early March, 53 percent of California Democrats reported a favorable view of socialism, compared to just 33 percent with an unfavorable view. In Texas, the comparison was 56 percent to 37 percent. In Maine, it was 60 percent to 32 percent.

Furthermore, a strong majority of Democrats polled in the Super Tuesday states supported eliminating private health insurance for a single-payer system./1 While the Democratic Party managed to consolidate around Joe Biden, thwarting Bernie Sanders' ambitions for the White House, a large portion of the party is nevertheless comfortable replacing private industry with socialist institutions.

While the Constitution was written before the emergence of our modern industrial and financial economy, this embrace of socialism directly challenges the support for capitalism embedded in the American founding. Capitalist ideas were a key part of the constitutional architecture and early political economy due to the founders' support for liberalism, republicanism, and national independence.

Although the founders were divided over many issues--thanks to the Republican-Federalist divide that emerged in 1790--these views joined together a relatively broad array of founding thinkers defending basic capitalist commitments.

Key Points

* Socialism is increasingly popular as a political ideology on the American left, but in important respects, it is inconsistent with the vision laid forth in the American founding.

* Generally speaking, the founders' vision of a liberal republic was built on concepts that today would be called "capitalism." Early US public policy was also capitalistic in its approach, as a way to unify and strengthen the nation.

* Still, many founders recognized the potential problems that unchecked capitalism could pose for a free republic. And contemporary policymakers should take heed of these hesitations.

View the PDF (https://www.aei.org/wp-content/uploads/2020/05/The-business-of-society.pdf)

Footnote:

1/Washington Post, "Live Results: Super Tuesday 2020," https://www.washingtonpost.com/elections/election-results/super-tuesday/.