When the Berlin Wall came down, and communism was "defeated", I was thinking, "Ok, now all the capitalists are going to take this as some kind of unmitigated endorsement of capitalism. How long will it take for us to demonstrate that unbridled capitalism alone is just as bankrupt as extreme socialism?"
David Simon, the creator of The Wire, and a much better communicator than me, has laid it out pretty well, IMHO.
One irony about the american success story is that it took place mostly during a very socialist period for America. During the cold war era, directly after world war II, and while holding itself up in contrast to the Red Threat, we had more socialist government than we have today, and a more successful labor movement. It as if there was still some doubt about the assertion that capitalism is the right and true method to manage wealth distribution, even as we railed against communism. But when the USSR fell, the accepted conclusion (in no way supported by actual logic) was "Communism has failed. Communism does not work. Capitalism works. Extreme capitalism is the one right and true way. Any and all socialism is bad."
To my mind, one of the funny things of anti-Obama furor has been the label "socialist". As if having a publicly supported school system were evil. Or perhaps having publicly funded roads, or having government oversight for our food and water supplies are counter productive. There is a huge spectrum of "socialism" and there has always been (and always will be) a degree of socialism in the United States. The only question is: how much is too much and how little is too little?
One thing not mentioned by David Simon, and omitted from almost every popular discussion of America's economic success, is the role of oil. The generally accepted belief is that America is what it is purely based on it's philosophy, form of government, and/or the character of it's people. I believe these things played a part, but that without oil in the ground, these things would not have "created" the wealth that American experienced. The wealth that American "created" was really just the stored up wealth of millions of years. Imagine a bank account that sat and collected interest for a million years. Then the heir of that accumulated wealth comes along and spends it all in 100 years. That's what we did. We spent our inheritance 10,000 times faster than it took to build it.
Oil in America was the genie in the bottle that granted all our wishes. It was a wellspring of "unlimited" energy. All we had to do was apply a bit of intelligence to direct that energy so as to grant our every wish. Everybody wants an automobile? Done. Everybody wants a television? Done. Everybody wants there own house full of shiny appliances? Done.
To my mind the trade deficit that we've seen over the past decades represents a syphoning off of the American wealth "created" during our oil wealth period. We no longer produce our own oil (at least not enough to support the lifestyle we're accustomed to) and we simply borrow, borrow, borrow to maintain our standard of living. We continue to live our lives as we have, without any hesitation, as if there will be another period of wealth creation, a time when the trade imbalance will flip around the other direction, and we'll be able to pay off those debts.
Sorry, I got a little off track there. The point is that the "success of capitalism" that we've seen, may not even have been attributable directly to capitalism itself, but perhaps it's just an accident that capitalism almost worked well, given a huge supply of energy as input. Perhaps we'll find that when the music stops in our current game of musical chairs, that the only way we'll survive is thru a form of economic management much, much closer to communism than ever was thought since the failure of the USSR. China seems to be chugging along pretty well, these days.