In their ideal forms, capitalist nations have governments that do not intrude on economic freedom or development. Individuals are responsible for their economic well-being and the state should do nothing but protect its’ citizens from foreign threats. This is the basis of the political-economic system of liberalism as envisioned by Adam Smith in An Inquiry into the Nature and Causes of the Wealth of Nations. [1] However, this idealistic view of national economies is barely relevant in today’s global economy. One of the most prominent capitalistic nations, the United States, has embraced programs and government intervention efforts that resemble that of a social democracy, especially in the 20th and 21st centuries. In the modern era, the United
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Adam Smith argues the chief role of the government is to protect against foreign and domestic threats. While the United States mostly upheld this idea with World War I and II, the start of the Cold War presented a drastic change in ideology and the role of the United States in the world. In her piece “Character and Ideology: The Case of Cold War Liberalism” published in New Literary History, Amanda Anderson states that starting with the proxy wars in Korea and Vietnam, the United States abandoned liberalism and inherited what some call “cold war liberalism.” [13] Instead of simply protecting against threats, the United States decided to spread its’ influence over the world. As a superpower, the United States felt obligated to protect democracy from communism and force other countries to accept American ideology. While it could be argued that this was a way to allow other countries to become capitalist democracies with total economic freedom similar to the United States, it seemed to be more about becoming the prominent superpower and fighting the communist system. If the United States truly cared about creating more liberal nations, then it would’ve focused on transforming all nations into capitalistic economies, not just communist regimes. While this wouldn’t necessarily have a major impact on the United States economy, the increase in military spending at the time never disappeared, and so military spending made up 3.5% of the United States GDP in 2014. [14] This spending, coupled with the other billions of dollars the government spends per year, is a significantly larger portion of GDP than what a liberal nation is supposed to have. Further conflicts, such as the Gulf War and the Iraq War have continued to add to this change in ideology.
Adam Smith argues the chief role of the government is to protect against foreign and domestic threats. While the United States mostly upheld this idea with World War I and II, the start of the Cold War presented a drastic change in ideology and the role of the United States in the world. In her piece “Character and Ideology: The Case of Cold War Liberalism” published in New Literary History, Amanda Anderson states that starting with the proxy wars in Korea and Vietnam, the United States abandoned liberalism and inherited what some call “cold war liberalism.” [13] Instead of simply protecting against threats, the United States decided to spread its’ influence over the world. As a superpower, the United States felt obligated to protect democracy from communism and force other countries to accept American ideology. While it could be argued that this was a way to allow other countries to become capitalist democracies with total economic freedom similar to the United States, it seemed to be more about becoming the prominent superpower and fighting the communist system. If the United States truly cared about creating more liberal nations, then it would’ve focused on transforming all nations into capitalistic economies, not just communist regimes. While this wouldn’t necessarily have a major impact on the United States economy, the increase in military spending at the time never disappeared, and so military spending made up 3.5% of the United States GDP in 2014. [14] This spending, coupled with the other billions of dollars the government spends per year, is a significantly larger portion of GDP than what a liberal nation is supposed to have. Further conflicts, such as the Gulf War and the Iraq War have continued to add to this change in ideology.