Category: Economics, Finance, and Political Economy

http://www.quora.com/How-much-more-capitalist-is-the-US-than-Germany/answer/Curt-Doolittle?share=1HOW MUCH MORE CAPITALIST IS AMERICA THAN GERMANY

*Capitalism: the voluntary organization of consumer production. (Liberty)

*Socialism: the involuntary organization of consumer production. (Totalitarianism)

*Mixed Economy: the voluntary organization of consumer production, and the involuntary redistribution of the rewards earned by organizing consumer production. (A trade-off between liberty and totalitarianism).

Socialism is impossible, since neither the incentives to produce, nor the means of economic calculation are possible. The only possible means of organizing production that produces surpluses is to provide both individual incentives and the means of rational calculation for pursuing those incentives.

This means that the only possible means of organizing production that is adaptive to changes in the world (wants and scarcities) is capitalism. This is why the entire world has adopted capitalism (the voluntary organization of consumer production).

However, the entire world has also adopted mixed economy consumer capitalism: that is, the authoritarian regulation and taking of the rewards from the voluntary organization of production, for the purpose of redistribution (By licit or illicit means, for licit or illicit purposes.)

So the entire world practices capitalism and none of the world practices socialism. Instead, the whole world practices mixed economy capitalism by taking the maximum amount that they can extract from the organizers of production without disrupting the organization of production.

Now, the difference between the USA and Germany is such:

1) germans are less diverse (more homogeneous) and homogeneous societies (see scandinavia) are comfortable with redistribution (sacrifice of my family and children and subsequent generations) for the service of yours. However, diverse polities are not comfortable with sacrificing for their competitors, any more than germans are happy redistributing to Turks, or mediterranean cultures that are lazier and more corrupt. America by contrast has an old historical problem of diversity of many peoples, and self reliance. The more diverse a people the less tolerance for redistribution.

2) America is not comparable to Germany per se, but to Europe in total. There are 50 American states, and no less than 9 or 10 american regional cultures, and just as brussels is perceived as a dictatorship the american government is perceived as a dictatorship by the central and southern peoples of the american continent, that works for the advantage of the high population centers of immigrants on the coastal areas.

As such Germany is both more homogenous, smaller, and more likely to redistribute, (over the objections of the south), while America is larger, more diverse, and less willing to redistribute. The reason is that germans are not competitors for power with one another (mostly) but american regions are at war with one another using the government as a proxy.

For these reasons Germany is less an advocate of a mixed economy than say California or New York, but more so than say Iowa, Georgia and Alaska.

Cheers