The capitalism in mixed capitalism.
Mixed Capitalism. Why? Money that's why. With taxes and regulations being lower than Democratic socialism, citizens have more freedom. Mixed capitalists countries like America and Mexico have less taxes than democratic socialists countries like Britain. And citizens keeping their money is how economics works. Citizens keep more money, they buy more stuff, businesses need more jobs so they hire more people and the cycle goes on. The less taxes and government there is in the system, the more money goes into the economy. The evidence of this is that Hong Kong and America have two of the highest GDP per capita and America has the highest GDP.
As the great Ronald Reagan once said "In this present crisis, government is not the solution to our problem, government is the problem" Reagan lowered the unemployment rate by 7%, had a 7 year positive GDP growth and had an average of 165 thousand jobs added per month average in his presidency. He used mixed capitalism Reaganomics.
Why the socialism part of Mixed capitalism is good
Pure capitalism could be bad. For example, If treating cancer is more profitable than curing it, big business could keep it from the people with no penalty. "Why treat cancer in a day when you can treat them for a life time and bill them every step of the way?" -Carter Pewterschmid Family Guy Season 11 Episode 3. In mixed capitalism, this would be harder for big businesses to do because the government is supposed to prevent this.
Also, tax dollars go to schools, emergency services, military, roads and healthcare. Also, organizations like the FDA are paid for by taxes to protect the people.
Negatives of Democratic Socialism
Claim: Nothing is in fact free, and the tax rates of many democratic socialist nations are higher than those of the U.S.
Factual evidence: While the U.S. has a top marginal tax rate of 39.6%, Denmark's is 55.6% and Sweden's is 59.6%, both of which are democratic socialist nations
Analysis: One major setback a democratic socialism is very high tax rates. Many people think benefits like schooling and healthcare are free, where in fact they are not and are paid for in very high rates before hand so later on they are almost free when they need to be accessed
Claim: Democratic social societies have a lower per capita income
Factual evidence: As of June 2014, median income (per capita income) in the U.S. was $53, 891. Democratic Social nation Denmark sat at $37,900 and Sweden wasn’t much higher at $41,188
Analysis: In many Democratic socialist nations, the per capita income is lower. This is most likely due to a smaller income gap, however, with government control on income, many entrepreneurs and business lack motivation. The reason being with so much government control, businesses and individuals lack motivation to work for higher profits and higher success when it's useless because the government will end up capping it.
Claim: Democratic Socialism brings with it higher unemployment rates
Factual evidence: With the unemployment rate now stuck above 10%, france, a democratic social country, finds itself at a much higher unemployment rate than its neighbour the UK, who has a 6.2% unemployment rate (The UK is a primarily capitalist nation)
Analysis: compared to the UK, who isn't a democratically social nation, the unemployment rate is much higher. The government's ability to fund the unemployed hides unemployment numbers, giving many democratic social nation's years of having unemployment numbers like 2%. This, does not reflect the real life numbers of regularly working people because many democratically social nation's consider those searching for work as people on “paid leave” when in fact they are searching for work
The existence of Pure Capitalism allows monopolies to thrive. Companies ran by people like Carnegie and Rockefeller dominated their entire respective industries by achieving significant advantages that are otherwise unattainable with different economic systems. No country has had a completely pure Laissez-Faire capitalist economy, but the closest thing was 19th and 20th century America. During this time period men like Carnegie and Rockefeller amassed enormous wealth, but in the process of doing so drove many companies out of business and basically put plenty of people through poverty. This caused an extreme concentration of wealth between the richest of the rich. The vast majority of America’s 75 million people in the workforce were unskilled industrial workers. They worked 60 hour weeks and got paid hourly an amount that after adjusting for inflation amounts to 2$/hr. Since the wages were fairly low and the positions were highly contested many people ended up becoming homeless or left in terrible living conditions where disease ran rampant. This created the introduction of urban slums that quickly became overcrowded.
Part of a pure laissez-faire system is the lack of government intervention. In a Pure Capitalist economy there is no government that provides public goods such as national defense, basic education, law and order, and legal systems. Law and order and national defense would not be provided because there is no fiscal incentive to provide goods that can be enjoyed without paying for them. Therefore, to provide public goods like lighthouses, police, roads, e.t.c it is necessary for a government to pay for them.
The lack of government intervention can also lead to markets failing. The free market does not provide the most socially efficient outcome if there are externalities in consumption and production. For example, a profit maximising firm will ignore the external costs of pollution through burning coal. This leads to a decline in social welfare. By contrast other forms of energy production, like solar power, are environmentally friendly and have a positive externality. By taxing production which causes pollution costs and using the subsidy to encourage other forms of energy production, there is a net gain in social welfare.
To recap, mixed capitalism is the middle ground between Pure capitalism and Democratic Socialism.
Coexistence of the private and public sectors. Government is involved in business, but both citizens and business have rights to prevent government control. Citizens can own property, and government has the right to regulate.
Taxes are expensive because the government gives people certain services like schools, roads, social security and emergency services.
Labor is regulated to prevent under pay and unfair hours. The Department of Labor makes sure people are treated fairly at work.
Mixed capitalism motivates businesses to make better products. The US was second in patents applied for in 2015 showing that people want to invent more and are motivated by money to improve the world.
"It’s one thing to mandate that cars have anti-lock brakes, or airbags, or side-impact resistance. But writing on a piece of paper doesn’t make people safer; science and engineering had to invent these technologies and competition had to make them affordable before they could become standard equipment in our cars."