Capitalism is not really the best word to describe this arrangement. (The term was coined in the late 19th century as a way to describe the ideological opposite of communism.) Some decades later, people began to use a better term, "the American system," in which the government involved itself in the economy primarily to develop what we would now call infrastructure—highways, canals, railroads—but otherwise let economic liberty prevail. I prefer to call this spectacularly successful arrangement "financial democracy"—a largely free system in which the U.S. government's role is to help citizens achieve their best potential, using all the economic weapons that our financial arsenal can provide.
|--Robert J. Shiller|
The United States as a Bailout Nation is a relatively new phenomenon. In the early and middle parts of our history, the country did not engage in rescue operations of corporations; speculators who got into trouble were on their own.
Government assistance was more likely to be made available during the birth pangs of a new industry—not during a single company's death rattle.
Venture capital firms were nonexistent in the nineteenth century. The early days of the republic did not have the equivalent of a Sand Hill Road. Sometimes Congress was called upon to fund start-ups and new technologies. Classic examples can be found in the expansion of the nation's railroads westward and in the development of the telegraph industry. Both of ...