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Hagen Butler

ECON 2020
The American Mixed Economy
The American economy is often defined as a mixed economy in which command
systems and market systems are used to in conjunction, to direct both the private and state
sectors of an economy. The integration of two types of fiscal thinking allows the economy to
draw the best from each system. On one hand, there are programs like Social Security and
Medicare that are government run and are products of a command market. On the other hand,
there are market systems that let private citizens operate businesses that set their own prices,
inside a market where buyers and sellers trade for goods and services. Often, politics interferes
with and effects economic policies.
Republicans, or individuals with fiscally conservative tendencies, often push for a
decrease in the role that the government plays in affecting peoples lives. In contrast, those who
are more liberal or are aligned with the left wing often feel that government organizations are
essential for protecting the public and ensuring public benefits. Without the presence of mixed
economics, the economy would undoubtedly struggle. For instance, government purchases can
shift the aggregate expenditures schedule upward and raise GDP, which can lead our economy
out of a recession. Most experts argue that a mixed economy is the best way to operate and has
proven itself through history to be best suited for our American economy. Although I agree that
our economy works best as a mixed economy, I feel that the current system fails at achieving a
mixed economy. I would argue that a small number of individuals currently hold a
disproportional amount of control over multiple aspects of the government and therefore
businesses that operate in the United States. The economy may have once been mixed or a
market system, or pure capitalism, but today, the economy is an oligarchy.
Oligarchy is defined as a form of government in which all power is vested in a few
persons or in a dominant class or clique; government by the few. (oligarchy, 2014) This
system gains and promotes most its power from either a democracy or monarchy forms of
government. It is well illustrated from the past when looking much of Europes kingdoms. It is
also more easily seen today when looking at Middle Eastern countries like the United Emirates.
A family, such as the Sheikhs, rule and govern while maintaining control over much of the
resources that the country produces. I believe that this form of government exists to a certain
extent, here in the US and remains widely unrecognized by the public. Oligarchies can be
comprised not only by elite and wealthy persons, but they can also involve large and powerful
business and corporations. Modern day corporations control many aspects of the American
experience. Corporations currently control what we buy, eat and see, and they have also shaped
our free market into a well-oiled machine that only served to make the rich richer.
Robert Michels was a German sociologist who wrote about the Iron law of Oligarchy
in his 1911 book Political Parties. He wrote that, The conclusion that the formal organization
of bureaucracies inevitably leads to oligarchy, under which organizations originally idealistic and
democratic, eventually come to be dominated by a small, self-serving group of people who
achieved positions of power and responsibility. This can occur in large organizations because it
becomes physically impossible for everyone to get together every time a decision has to be
made. Consequently, a small group is given the responsibility of making decisions. (Michels,
1911) I would argue that the small groups that are given the decision-making responsibilities do
not their decisions with public interests in mind. This is demonstrated by the fact that
individuals such as the Koch brothers have more political pull in this country than most
congressman or senators. They are the ones that are making the decisions and they do so with
only their bank accounts and maximizing profits in mind.
Until the recent protest by Occupy Wall Street (OWS), most have not realized that there
is a 1% and that they control the wealth and governance of this country. There are still many
who ignore the fact that their beloved politicians receive significant financial benefits from the
corporations that they are aligned with. While I would not go as far as calling myself an
advocated of the OWS movement, I do believe they played an important role in brining to light
the extent of corporate government control in the US. It is important for us to question an elected
politicians decisions in light of the corporations to which he is aligned.
A perfect example of small group decision making is the annual Bilderberg Conference
that takes place in England. Some of the most powerful people in the world meet in an old
Manor in the outskirts of London, to discuss economics and politics. Much is unknown about
the meetings because media is not allowed to cover the discussions. According Michael
Maecher, a lawmaker from Britains Labor Party, When 130 of the leaders from all across the
West get together, and many of these are billionaires, they are people who are immensely
wealthy and immensely powerful. And when they all get together, it's not just to have a chat
about the latest problem; it is to concert plans for the future of capitalism in the West. That is on
a very different scale." (Lawless, 2013)
As I read the textbook throughout the semester, I noticed a reoccurring theme: the
recession of 2007. The talk was often about what caused it, what is since being changed, and
how it affected the economy. However, I noticed that the textbook failed to mention who was
responsible for the economic downturn and how those that were responsible for it were being
persecuted. Wealthy individuals are currently controlling how the lives of school teachers,
firefighters and janitors are being lived. Individuals in the working class are the ones who are
losing their homes and jobs while the people that caused the recession are being slapped on the
wrists. I believe it is important that we take a look at how the individuals responsible for the
recession are failing to be reprimanded and are not being forced to take responsibility and how
this represents a continuation of their control and power.
In conclusion, mixed economics seem to be the best of both worlds. The private and
public sector each draw from the best aspects of market and command systems. The American
public should get to select the people that they feel are best suited to orchestrate the economy.
The problem is that they do not select who runs the important aspects of their lives, the rich and
elite are the ones that control what Americans consume. There is only one word to describe the
economics system that is used in the United States, its called an oligarchy.
Works Cited
oligarchy. (2014, May 2). Retrieved from The American Heritage New Dictionary of Cultural Literacy:
http://dictionary.reference.com/cite.html?qh=oligarchy&ia=ahcl
Lawless, J. (2013, June 7). Bilderberg 2013: Secretive Meeting Of Western Power Brokers Begins Near
London. Retrieved from Huffington Post:
http://www.huffingtonpost.com/2013/06/07/bilderberg-2013_n_3401991.html
Michels, R. (1911). Political Parties: A Sociological Study of the Oligarchical Tendencies of Modern
Democracy. Hearst's International Library Company.