American Capitalism: Reflections on Its Mystery and Mythology

After our first class, I made an entry in my private journal where I answered all of our interview questions. I wanted to have a way to compare my interviewees’ answers with my own before my thoughts became impacted by class readings and discussions. I also wanted to trace my own intellectual evolution over the course of the semester. I would characterize my pre-class answers as unambiguously pro-market. I talked about how capitalism is a natural system that rewards creativity and efficiency, expressed my belief that voluntary transactions are superior to state planning, and praised the Industrial Revolution as the most important period in human history.

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Final Interview: A Natural System

My third interviewee, HE, is an eighteen year old student at Virginia Commonwealth University. Prior to enrolling at VCU, she worked as a sales associate at Pac Sun and as a Partner at Starbucks. Throughout the interview she struggled to connect ideas about capitalism as they were taught in school with her own experiences.


How would you define capitalism?


“Capitalism is a system of open markets where the people govern how they organize markets. I’m sorry I don’t have much more to offer than that.”


This is actually the third interview I have done, and I usually get the same answer, that capitalism is a system that allows free transactions.


“That is not necessarily true, because the government regulates the market, or at least that is how it is taught in school.”


That is a good segway to my next question, how would you describe your economics education?


“I have taken a microeconomics course and am about halfway through a macroeconomics course, which is basically the study of capitalism. My understanding is limited, but I’m not very good at applying what I have learned in school. It is difficult to take what we have learned in the classroom and connect it to the real world.”


From your answer, it sounds like you feel as though you are learning solely about how capitalism functions in your economics courses.


“I guess that is true. Micro and macroeconomics are basically the study of how markets work.”


Do you know of any other economic systems?


“Mercantilism is the only one I can name off the top of my head.”


What about socialism?


“I just thought of that too, but I thought it was more of a political system.”


Why is that?


“I guess because socialism is associated with the Soviet Union and the Cold War and not really as a realistic way of organizing an economy. After all, it did fail.”


What do you think are capitalism’s origins, both globally and in reference to the United States?


“AP U.S. History in high school covered it. From the way that I see the history of capitalism, it looks like there was a group of classical economists that philosophized about economics and created the values that are the basis of free market capitalism. That sounds right for the U.S., but as for the rest of the world I am not sure.”


How does capitalism influence America?  How has it influenced America in the past?


“Capitalism plays a big part in our culture and our financial policy. I’m sorry that I’m so inarticulate about this subject. Lots of the issues I hear about are economics issues. From my freshman-outlook on economics, it looks like people are better off when they set their own prices and the economy works to get to equilibrium in prices, supply, and demand.”


“Wait, hold on. I think the reason I am having such a hard time articulating my thoughts is because I have read about capitalism, I understand it, but I have not thought about it. If my teachers had made me apply my knowledge and write essays about it, maybe it would be better.”


What has your personal experience with capitalism been?  What is your relationship with capitalism?


“I worked in the private sector so I know what it feels like to work to make somebody else’s profit. As a sales person, your standing is based on how much you can provide to the company. People are not meant to live based on focusing on profits, but that is not a healthy way to live. However, for my relationship with capitalism, I have to appreciate it because I am on the positive end of the spectrum because I got lucky from it.”


It sounds like you think you are a winner from capitalism.


“I am. I admit I come from a good family.”


A big question that has arisen in my past interviews has been whether there are more winners than losers in the capitalistic system. What do you think?


“There are definitely more losers, but I cannot criticize the system because I have benefited from it.”


Why not?


“I don’t know, I’m sorry I don’t have the words to articulate it.”


How do you think social issues have been affected by capitalism, both now and in the past?


“When it comes to social equality, a lot of people will turn to survival of the fittest. Gender and race play a role too.”


How so?


“I mean I did a paper on how women’s bodies are sold for profit in bra advertisements. My conclusion was that there is a correlation between bra ads and whether or not women engage in premarital sex. Body image plays a big role in marketing. Capitalists make money off of people’s insecurities.”


In light of your research, do you think capitalism is a natural fit for human nature?  Why or why not?


“Yeah, it is evolutionary. People are going to want as much as they can. People who are more intelligent and educated guide the economy, while others may not be as successful. It sounds like Social Darwinism, I know, but that is what happens.”


From what I have been able to conclude in my interviews, it sounds like people take a passive view towards capitalism. My first interviewee saw it as the best of a bad situation, my second saw it as the only viable system (because that is all he was taught), and my third thinks that capitalism has won out in the arena of ideas. It would have been nice to gain more nuanced views about capitalism and its place in history, but these interviews have basically yielded the same answers. More or less, they all believe capitalism is just a system of uninhibited transactions rather than conscious decisions made by people over time. They also think it is natural because people want more than they have. If I can draw any conclusions from my third interview, it is that the American public’s views about capitalism are relatively consistent.

More Winners Than Losers

In the conclusion of my last interview, I said I would pick a person whose experience with American capitalism had been more positive. This next interviewee had to be older, someone who had time to establish themselves in the market. His name is DR, an eighty five year-old retired doctor from central Pennsylvania. After concluding his medical residency in 1959, he started his own obstetrics and gynecology practice. Later in his career he moved into nutritional health. While DR’s experience capitalism has been more tangible than mine or my previous interviewee, his view on the subject is also influenced by his understanding of history and current political trends in the country.

What is the definition of capitalism?

DR believes that free market enterprise means that individuals have a way to “earn money based on personal choices.” Individuals may spend how they choose and businesses can create whatever products they want. In the end, “capitalism is about freedom and individual choice.”

Like Captain Sean Luke Picard in Star Trek: Next Generation, who vociferates to the Borg that Earth’s culture stands for freedom and self-determination, DR reinforced his view that capitalism is the freest economic system out there. Capitalism’s continuation is necessary to the United States’ survival as a commercial superpower. Later in the interview, I return to his equation of capitalism with freedom.

How has capitalism affected you personally?

For DR, the route to success seemed straightforward. If he wanted to become a doctor, he had to go to college, then to medical school, intern, and complete a residency, so that is what he did. After serving in the army, he got an education thanks to the G.I. Bill. He said, “I wanted to join a profession and open an office, so I had to go to school and work hard. A lot of flunkies got into college because of the G.I. Bill and they washed out.” Some, like DR, had the aptitude to succeed in higher education, but the military helped them pay for tuition.

I asked my interviewee if he felt like the barriers to the medical profession were an infringement on free market principles. After all, the law says you cannot practice medicine without a license and you cannot get a license without going to school. He said, “No, it is just what I had to do. I had an obligation to go to school and serve my patients, but these requirements did not affect my economic freedom.”

What do you think are alternatives to capitalism?

Throughout the interview, DR used Canada as a foil to the United States. He asserted that “Canada is more socialistic because the national government pays for education and healthcare.” He believes the U.S. government is moving in the same direction as Canada, though he is unsure if the people are.

What are capitalism’s origins?

“The U.S. was founded on the idea that we should be a capitalist democracy. People left Europe and England to be free to do business and trade as they please.” From there, I wondered if DR saw capitalism and democracy as inextricably linked. However, he does not believe so. Again, referring to Canada, DR noted that the country is parliamentary democracy even where people can speak and vote as they please, even if they do have to bear a greater tax burden.

How do you think social issues have been affected by capitalism?

My interviewee admitted that the forces of creative destruction do create in people’s lives, citing the 2008 subprime mortgage crisis. He mentioned that “prejudices” may come out. When I pressed DR he expressed his view that “when economic times are bad prejudices run high. So when the economy contracts, people tend to look for scapegoats. For example, people on the lower-end of the socioeconomic scale blame immigrants for taking their jobs.”

How has capitalism changed over time?

“Capitalism has changed, but mostly because of government regulation. Because of emerging economies like China and post-Communist Russia, things are more competitive.” However, I wanted to know about his personal experience with the alterations to the capitalistic system.

I asked him about how free market forces in the medical field had changed. “The two biggest changes in my career were the steep rise in malpractice insurance rates and the invention of Health Maintenance Organizations, or HMOs. Malpractice premiums rose through the roof, but HMOs capped how much a doctor could be reimbursed. I was a specialist, an OBGYN, so I was not affected too much. An insurance company or a patient would still pay me to treat them.” In his view, tort reform could help control runaway malpractice premiums and reduce healthcare costs, but noted that all efforts to enact tort reform have failed because most members of Congress are lawyers who benefit from the current system.

Is capitalism a natural fit for human beings?

He simply said, “It should be. Capitalism will never die, but it will continue to change.”

How has capitalism been taught to you in various stages of your education?

DR was born in 1930. He says that no one questioned capitalism and that it was just the way the U.S. worked, therefore it was never taught to him.

I found this astonishing. After all, Franklin D. Roosevelt was the only president he had ever known until he had reached adolescence; under his custodianship, American capitalism underwent the most radical changes it had ever experienced. When I pointed this out, DR argued that “The New Deal was about avoiding another Great Depression, it was not about changing capitalism.”

I retorted that Social Security forced employees and employers to set aside wages and earnings to pay for retirement. If capitalism is about individual choice, then does Social Security contradict capitalistic principles? He answered, “No, that was about reforming society and the way people saved for retirement, not about economics.”


In this interview, I got to talk with someone who has thrived under capitalism. At the same time, misunderstandings and contradictions were apparent. Was colonial America a capitalist society or something totally different? If capitalism means individuals are free, then why is Social Security, a system that forces retirement contributions, acceptable? These are difficult questions, and they have frustrated historians, pundits, and thinkers for decades. One thing is certain, DR’s views stand in stark contrast to my first interviewee’s. He believes capitalism produces more winners than losers.

“More Losers Than Winners”

Economists have the tough task of looking at hard data and making nonpartisan conclusions about the state of the economy. However, most Americans are not economists and our politics shape our views about whether or not the country is on the right track or if the capitalist system produces the fairest outcomes. The latter question defines my first interview.

In my personal life, politics and economics are common topics of discussion, so the convictions of most of my friends and family are known to me. My first interviewee is an active progressive, her name is KJ. She is an erudite student of politics and sociology, but her ability to organize her thoughts is what led me to pick her for this blog interview.

What is the definition of capitalism?

We started the interview with a basic definition of capitalism, which she said “is the buying and selling of goods, usually under some sort of market proposition, by owners of businesses.” We did the interview at 10:30pm on a week night, so after this warm-up question I moved on quickly to the most thought-provoking questions of the interview.

How has capitalism affected you personally?

As, KJ aptly put it, “You can’t live in an economic system where there’s winners and losers and not have it affect you.” The idea that capitalism yields people who are extremely wealthy and successful along with others who are destitute and disadvantaged was at the heart of the interview.

KJ went to a private high school in a wealthy area of Chattanooga, Tennessee. She was raised by an accountant and a middle school science teacher so her family was comfortable, but they could not keep up Chattanooga’s rich Joneses. Her private school required uniforms, but certain baubles like designer shoes and BMWs clearly defined who came from money and who did not.

Some of KJ’s best friends were able to go to that school on scholarships, while their families were living off of government assistance. These difficult circumstances contrasted with the “movie set” mansions of her peers led her to see gross inequities in the capitalist system and it made her feel “awkward and out of place.” By the time it came to pick a college, she knew that the Ivy League or another upper-crusty private university, were boats and summer homes were expected assets, would not be right for her.

It sounds like you think there are more losers than winners. Can you explain why?

When I asked this question, she let out an emphatic yes, “because you have multimillionaires with two or three houses and you have people who are living paycheck-to-paycheck and it’s just getting worse.”

KJ believes modern-day capitalism has allowed a few people to amass incredible wealth while most Americans are still struggling to keep their heads above water.

What do you think are alternatives to capitalism?

“Personally, I have socialist tendencies and I am a fan of government intervention in the economy. I think that subsidies are important, because if you have free market capitalism of essential goods then the price keeps going up and people can’t afford it.” However, she thinks that no alternatives have worked and that people just keep going back to capitalism. Even European social democracies have reverted back to capitalism.

What are capitalism’s origins?

KJ believes capitalism emerged as an alternative to mercantilism, but specifically how capitalism emerged in the U.S., she “has no earthy idea. That is something that should have been taught in AP history.”

How do you think social issues have been affected by capitalism?

In her view, “that’s half the reason we have a race issue now,” because in the U.S., race was used to pit white workers against African-Americans. Whites saw themselves as superior, so they did not recognize that they “were in the same boat” as their black counterparts. “The engine produces inequality and tries to keep it there.”

How has capitalism affected you as a gay woman?

Luckily for KJ, it has not affected her much because her parents did not kick her out after she came out as a lesbian. However, she says it could later because some states, like Virginia, do not have employment protections for sexual minorities, so a boss could fire her for her sexual orientation.

How has capitalism changed over time?

To KJ the most striking area of capitalism’s evolution has been in the realm of corporate power. She believes, “corporations are more powerful because they’re bigger, they can own each other, and now they can have religious beliefs,” in reference to the Supreme Court’s recent decision that allowed Hobby Lobby, Inc.’s owners to forgo paying for some forms contraceptive coverage because of the owners’ religious objections.

She does admit that the system has become softer over time, “we have made capitalism into a much safer system with child labor laws and such.”

Is capitalism a natural fit for human beings?

“Everything is socially constructed. Capitalism was created by people, it can be changed, and it has evolved over time.” “Is it human nature? I don’t know, mostly because I am having a hard time defining human nature these days. My gut says it is not necessarily human nature.”


At the heart of KJ’s interview is the growing concern about inequality in the United States, something that worries many progressives. Some are getting rich, but others are struggling, even suffering under modern-day capitalism. She sees the American dream as a myth, something to give people hope for a better life. As Bob Dylan puts it, “the loser now will be later to win.” In my next interview, I will to talk to someone who has lived the American dream, who arose from an unprivileged childhood to become successful.