We’re not in a Manichean struggle between two monolithic systems. We’re just deciding where to draw the line between the private and public sectors of our economy.
If you believe the headlines in our corporate media or the rhetoric of our political leaders, the United States is at a fork in the road. In one direction lies continued Capitalism, which (depending on who you listen to) will either give us unparalleled prosperity or turn the US into a plantation with a few trillionaire owners and a population of serfs. In the other is Socialism, which has either made Northern Europe a 21st-century Eden or ruined resource-rich Venezuela. [1] President Trump would have you believe that the leftward fork is to Communism, “a mortal threat to American liberty”, as if there were no difference between AOC and Stalin.
The occasion for this argument is the improved outlook for Democratic Socialists within the Democratic Party. Bernie Sanders, Elizabeth Warren, and AOC have been around for years, but last November they were joined by Zohran Mamdani, who was elected Mayor of New York City on a platform of rent control, child care, and free buses. In the New York primary two weeks ago, Mamdani-endorsed challengers defeated two incumbent Democratic congressmen and won the nomination for a third congressional seat. In Colorado a week later, another incumbent Democrat in Congress fell to a progressive challenger, a former senator lost the primary for governor, and sitting Senator John Hickenlooper survived a more serious challenge than anyone saw coming just a year ago.
This has evoked much hand-wringing in the political and economic establishment, particularly from the editorial pages of billionaire-agenda publications like The Wall Street Journal and The Washington Post.
I think we would all do well to take a step back and challenge the frames we’re being given. In reality, we’re not facing a choice between two diametrically opposed futures. And we’re not about to go off a cliff into some radically new economic system.
The United States has always had a mixed economy, with both a public sector and a private sector. And we have always had an argument about where to draw the line between them. In the early-to-mid 1800s, before slavery became the center of our politics, the Whig Party believed in a bigger public sector, with a national bank and more government-funded public works like the Erie Canal. Meanwhile, the Democratic Party of that day was the low-tax party that wanted to keep the public sector as small as possible.
That’s the same debate we’re having now. Our most pro-capitalist politicians don’t propose abolishing the public sector, and our most pro-socialist ones don’t propose abolishing the private sector. No matter who gets elected, your local pizzeria will remain a private business and your fire department a public institution. We’re all just arguing about where the line should be.
For example, currently healthcare is divided between the two sectors. Most, but not all, hospitals are for-profit businesses. Health insurance comes partly through government programs like Medicare, Medicaid, and the Veterans Administration, but also through big corporations like Aetna, Cigna, and United Healthcare. (My personal health insurance is split: I have basic Medicare, but my Medicare supplemental and prescription drug coverage is through private-sector companies.) ObamaCare uses government subsidies to pay for private-sector insurance.
The flagship progressive proposal, Medicare for All, would shift the line to expand the public sector’s role in health insurance. Meanwhile, conservatives want to make Medicaid more like ObamaCare — government subsidies run through private insurance companies. A recent Washington Post op-ed called for abolishing the National Institute of Health and relying almost entirely on the private sector to do our medical research.
Highways and prisons are generally considered part of the public sector. But occasionally a toll road gets leased to a private company. And about 9% of the nation’s prison population is housed in private prisons. Both of those divisions are controversial. Some Americans would like to take the whole sector back under public control. Others would privatize further.
We also argue about how much of the private sector requires government regulation. But these arguments are also about moving lines, not eliminating one side or the other. Our nuclear power plants, for example, are almost entirely owned by private-sector companies. But I can’t think of any serious politician who advocates complete deregulation. Nor does anyone doubt that industries can be stifled by over-regulation.
These are healthy debate to have. Some things are better handled within a market system while others aren’t. Regulation can be either insufficient or stiflingly onerous. It’s not always obvious which is which.
Paul Krugman posts “There Are Very Few Socialists in America“, noting that we are seeing a shift in the use of the word socialism more than an actual change in Americans’ political philosophies.
Why, then, does it look as if socialism is on the rise? Mainly because right-wing propagandists continually smear social democratic policies as socialist, trying to make popular, mainstream policy ideas sound extreme. And some Americans who are basically social democrats in effect respond by saying, “Well, if that’s socialism, I guess I’m OK with socialism.”
This corruption of our political vocabulary makes it difficult to notice real threats. If Mayor Mamdami is a “communist“, how will we sound the alarm when an actual Mao or Lenin appears? [2]
As I read the room, the recent popularity of Democratic Socialists may not even have that much to do with single-payer healthcare or any other policy. Kamala Harris lost in 2024 (and least in my judgment), not so much because of any particular issue, but because voters associated her with the status quo. Status quo Democratic centrism has essentially no answer to growing inequality, or the widespread sense that corporate power is gradually snuffing out individual choice, opportunity, and freedom. The old politics of reaching across the aisle and being willing to compromise isn’t working in an era where gerrymandered districts make representatives fearful only of the extremists in their own party.
Much of the “socialist” vote, like much of the MAGA vote on the Right, is less about ideological commitment than simply a plea to do something different.
If moderate Democrats want to retain control of the party, they need their own vision of what “something different” looks like. Joining the Republicans and the corporate media in scaremongering against Zohran Mamdami isn’t going to cut it. Whatever you think of his plans, at least he wants to do something.
[1] Arguably, Venezuela’s problem isn’t socialism so much as corruption. If you don’t want the US to go the way of Venezuela, your best course is to vote out anyone connected to the unprecedented corruption of the Trump regime.
[2] That’s why I was so careful in 2015 when I started applying the word fascist to Trump and his movement. I made sure to define the term clearly rather than just use it as an insult. I think Trump’s subsequent abuse of government force, attacks on the free press, aggrandizement of executive power, and efforts to suppress non-White voting have validated my usage.
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CAPITALISM: THE ANCHOR OF PEACE AND PROSPERITY
The Biological Imperative of Capitalism
Throughout the recorded annals of human history, a singular, dark thread remains constant: the insatiable desire of certain individuals to subjugate the world through the violence of war.
These grand ambitions of conquest are not merely historical footnotes; they are the recurring symptoms of a human nature that inherently seeks dominance.
Yet, history also reveals a cold, mathematical truth—war is a venture of staggering exhaustion, and victory invariably alights upon the banners of the side possessing the greatest hoard of resources.
For centuries, mankind struggled in vain to chain these imperial impulses.
It was not until the bold American experiment that a functional muzzle was placed upon the reach of rulers.
The United States Constitution, through its intricate web of checks and balances, stands as the only sophisticated mechanism ever devised to restrain the inherent greed for absolute power.
The Logic of Deterrence Through Abundance
If resources are the ultimate arbiter of survival, then the most logical pursuit for any civilization is the system that generates them with the greatest velocity and volume.
That system is capitalism.
By fostering rigorous competition and the free exchange of value, capitalism creates a reservoir of national wealth that serves as the ultimate deterrent.
A leader standing atop a mountain of economic resources possesses the unique ability to discourage the predations of foreign aggressors.
In the theater of global power, strength is the only language understood by the “evil ones” who harbor dreams of conquest.
Conversely, a nation that allows its resources to dwindle does more than just invite poverty; it actively inspires the ambitions of its enemies.
Weakness is a provocation; abundance is a shield.
The Harmonious Synthesis of Power and Welfare
The true genius of the capitalist framework lies in its dual utility.
It provides the necessary capital to sustain the democratic process and the vast wealth required to ensure the domestic happiness of the citizenry.
When a nation is prosperous, its people are content, and its borders are secure.
By maintaining the position of the world’s preeminent economic power, the United States does not merely serve its own interests; it creates a global equilibrium.
The synthesis of resources used for internal prosperity and external defense is the only logical path to a lasting harmony.
In a world where human nature cannot be changed, it must be managed through the overwhelming success of the free market—the safest and most sensible way for a free people to live.
The Standard of Leadership and the Post-1945 Era
The true measure of an elected leader is the ability, within the span of two terms, to satisfy the electorate by effectively providing maximum opportunity while simultaneously extending assistance to the less fortunate.
Central to this mission is the ironclad duty to ensure that no corruption exists to siphon off the nation’s vitality.
It was this commitment to common-sense objectives that propelled America to its position as the undisputed global leader after 1945.
However, the subsequent years have seen the rise of leaders who failed to deliver on these fundamental requirements.
To remain “number one,” the nation must return to a leadership that views economic abundance not just as a luxury, but as the primary tool for securing peace and purging the rot of corruption from the halls of power.
Professor Tom V. Wilen
But which version of capitalism? The mix of socialism and regulated capitalism than most countries in the world have, or anarcho-capitalism that has never been attempted on a national scale?
“Capitalism is like fire — it can produce great good or great harm, but to be good it must be carefully, scrupulously, and completely controlled.”
–Kim
Yes! America does not have a capitalist economy; it has a mixed economy, just like every other country in the world. Why? Because people have found this works best. – Mike Ignatowski
I know it’s your site, your rules Doug, but I really wish you’d disable anonymous comments. It’s hard to engage in a constructive conversation in the comments when 90% of the contributions are from Anonymous.
I wouldn’t read too much into the recent success of DSA candidates. The electorate has been in a “throw the bums out” mood for a while, and this is just an expression of that. The real concern with the DSA is that they could become the Freedom Caucus of the left, by demanding maximalist legislation and killing any potential compromise. For low-information voters who don’t keep up with legislative sausage-making, all this will do is tell them that they voted for Democrats, yet nothing changed. So maybe we get a Democratic president in 2028 but go back to a Republican Congress.
I also want to point out that some things you call “private sector” are really just government contractors. These would include private prisons and Medicaid. I don’t see a substantial difference between a government employee doing something, or an employee of a contractor as the money is coming from the same place. The real private sector is private business, paid directly by individuals or by other private businesses.
Some functions of society are simply handled better by government, as there’s no way to privatize them. Examples would be the military and law enforcement (unless you want the cops to send you a bill every time you call them to report a crime). It’s ironic that the same politicians bleating about “socialism” are big fans of what amounts to a socialized military and socialized law enforcement. I define “socialized” as government employees whose wages are paid by taxes, and who provide services free of charge – in this case, national defense and protection from crime. Taxes may go up to pay for the Iran war, but it’s not like the Army is going to send everyone an itemized bill.
While you’re right that government contractors and ‘pure private sector’ are different, I disagree that government contractors are the same as government employees doing something (whether through the government or through some kind of government agency that is independent to some degree like school boards, etc.).
The main difference is that you insert someone in the middle that is profit motivated – so instead of the government (or whatever government offshoot) just trying to do Y thing as well as it can for $X, you have the government paying somebody else to do Y thing for $X. That person then is motivated to spend as little of the $X doing Y thing as they can, so they get to keep as much of the $X as possible for themselves.
Sometimes, this will be efficient. For instance, if the company does Y thing anyway, it may be much cheaper for them to do what the government needs than for the government to develop the expertise itself. An example where this is likely true would be ordinary construction work – it is almost certainly not efficient for government to have government-run construction organizations specifically for building government buildings. There are probably various other reasons it may be efficient as well, but I think ‘the company already does Y thing for people other than the government’ is probably the biggest one. Another one is probably ‘Y thing is discrete and has easily measurable quality, and we can make people bid against each other to do Y thing for us more cheaply’
Sometimes, it will not be efficient. In my view, this is often true where Y thing is something that is mostly done by governments, where government is actually uniquely well suited to doing Y thing, or where the costs of doing Y thing are almost all things like ‘have enough trained people show up and do the thing’, or ‘provide food for Z people’, or ‘direct costs of treating people who use this service well or fairly’.
In those cases, governments and private contractors will have very similar cost structures (since private contractors aren’t doing it for other people, so have no economy of scale advantage), but private contractors will want to make money on it too – so either the government pays more, or the quality of Y thing is worse (or the working conditions for the people actually providing Y thing are worse). I’m thinking in particular of: (a) private prisons, where the costs are mostly having adequate staffing and providing prisoners with reasonable quality of life, and (b) health insurance where the thing being sold is essentially the ability to absorb and spread out risk, something the government is actually really good at because it can raise the funds through taxes and can’t go bankrupt.
I think the same logic for where private contractors will not be efficient applies to education, potentially healthcare as a whole not just health insurance, and some other areas too.
This isn’t a model for all situations – there’s also issues like ‘limited ability to provide this service’ (e.g. you can’t have 14 different water mains under a street, so whoever provides the service has to keep providing it) that are orthogonal to the issues described above. And it’s also a bit tangential to the thrust of your comment. But it’s something I’ve thought about a fair bit, so wanted to chime in.
I think that the only reason Trump got elected is because many low income Democrats felt like they were not being heard and that the economy under Democratic control was genuflecting to billionaires while the middle class was being sacrificed. Jan StrongOn Jul 6, 2026,
Janet — you may be correct, but I am having trouble imagining people thinking Republicans were more likely to do good for the middle class.
–Kim
Once again, thank you for a level-headed approach to things.
candidates are winning because they are clear eyed about Israeli cruelty and moral degeneration
If cruelty and moral degeneration are such an issue, why don’t they feel the same way about Russia attacking Ukraine, about Hamas attacking Israel, about the US attacking all the various countries we are attacking?
Many of us liberals are disgusted by those things, as well as all of the other immoral degenerate thinga going on today.
I don’t know anyone who isn’t supporting Ukraine and is disgusted that the US is slow walking help to Ukraine which has caused Ukraine to abandon the Biden deal of not attacking beyond the Ukrainian border. But there is no question that the way Netanyahu fights wars is to punish the civilian population. Look at the civilian death toll and the military says that they haven’t reduced Hamas or Hezbollah, the only way that happens if you are targeting civilians first. Then there is the withholding aid from the displaced.
I will say that with Trump buying shares of corporations (without congressional approval) is the closest thing to Communism that I have seen in this country. The US owning Intel, US Steel, 2 or 3 rare earth mining companies, coal power plants is different from loans, tax cuts, or grants where ownership of the corporation is retained. Remember the GM bailout (loan) where Republicans said government motors and Communism, but they didn’t when the late banks were bailed out years earlier. Trump has a seat at the table of these corporations at least dividends are paid to the Trump treasury instead of wherever the Venezuelan oil money is going. And he boasts about how much money we’re making. Just remember when it say Intel inside the government is getting 10% of the profit before taxes.
For decades now, I have been struck by how in the abortion debate there are those on each side trying to win through futile attempts to set the definitions. After all, how can one be “anti-life” (or anti-choice)?
The right’s use of “communism” strikes me as similar–cynical deployment of a label to cut off all debate.
Maybe it has always been thus in public discourse, but I do wonder if the anti-abortion rights movement made this mode more popular.
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