The United States inherited many of its traditions, bureaucratic systems and social concepts from major European philosophers, economists and social scientists. Among some of the prominent names which have left an indelible impression on the American System as a whole are the empiricists Locke, Hume and Berkeley, and the French philosopher Jean-Jacques Rousseau who developed the basic principles of ownership in his work entitled The Social Contract. Others, like the economic theorist, Adam Smith in his Wealth of Nations, further perfected the rules of economic interaction, such as competition, generation of capital through productivity, and distribution of goods and services. Another social theorist who heavily influenced this nation's organizational patterns was Max Weber. He developed the system of hierarchy and bureaucracy which controls, even today, many sectors of the U.S. economy.

Far less influential in American economic history have been the socialist economists and theorists such as Marx, Engels, Malon or Russell. For certain periods in U.S. history, such as in the 1930s, socialism grew in popularity and in major urban centers of America, particularly during the depression, entire newspapers and parties were established which recommended distribution of wealth in accordance with egalitarian principles advocated by socialist theorists. However, on balance, these theories were never adopted by the American people who pulled themselves out of the Great Depression with the help of Roosevelt's New Deal program; this program, of course, fell well short of pure socialism as such.

It could be asserted, therefore, that America is a nation convinced of the merits of capitalism and competition. The world also seems convinced that this system is among the most productive, particularly since the collapse of the Soviet Union and the falling into disrepute of the socialist model.

On the surface, the American system seems to function efficiently. Over 90% of the workforce is employed. Major social institutions are intact. The banking system is secure due to a complex web of legislation, regulation and safety mechanisms. There is considerably more than a "chicken in every pot", as families adopt the materialistic values of consumerism. Suburban neighborhoods seem groomed and immaculate. Children are fed and educated. The society seems to function well. A television veneer pervades even the lower-middle class in the America of the 1990s.

By privatizing major American services in recent decades, the aura of private enterprise has been bolstered. The U.S. Postal Service must now compete with Airborne Express, DHL, Federal Express and UPS. The monolithic telephone monopoly, AT&T has been down-graded, and Baby-Bells have dotted the landscape every few hundred miles, as private competition swings into high gear. Other industries have found themselves deregulated as well, such as the airlines sector where bankruptcies are now commonplace due to increased competition and fare-wars. Where there are losers, there are also winners, of course. American Airlines is considering merging with European firms, and is anticipating an ever-expanding theater of operations.

At first glance, it would seem that the competitive system, based on the principles of Rousseau, Locke and Smith (modified here and there by Hoover, Nixon and Reagan) is working admirably. But, of course, there is no way to ensure that "perfect competition" can flourish in such a large and diverse nation as the United States. Just as the banking industry is heavily controlled, other sectors of the national economy must be "roped in" and regulated.

The "free-market economy vs. government regulation" argument in this country is an old one reaching back into the 1930s during the economic upheavals of that era. There were those who were convinced that a laissez-faire approach must be allowed to dominate market forces. This means, of course, that no controls should be enacted and that price and wage levels should be determined by the 'law of supply and demand'. Yet, more liberal thinkers felt that this would result in the oppression of the weak and powerless in American society. They felt that only the aggressive and unethical elements would prosper at the expense of the honest and hard-working people. For this reason, "perfect competition" could not occur. Government stepped in to ensure that certain rules were honored and minimal standards were maintained.

There are many huge sectors of the American economy which are not part of the competitive system. AMTRAK, for example, forms a virtual monopoly and is heavily underwritten by government funding. Agriculture, so it would seem, is a miraculous showcase of private-enterprise success and prosperity. However, upon further analysis, the entire agricultural sector in the United States is found to be criss-crossed with artificial government price support mechanisms and subsidies. When the government is not controlling prices, Agricultural and Livestock Associations are very effective in doing so. The price of lamb, beef, wheat, and dairy products, to name but a few categories, are all held within tight - highly profitable - price ranges by powerful non-market forces. Under these circumstances, it is difficult to say that pure competition can exist in this country.

Naturally, the concepts involved surpass by far the narrow confines of the food industry, because they also affect major industrial sectors. In the 1960s, John Kennedy was confronted with a steel-workers strike which paralyzed, and threatened to destabilize, the underpinnings of the economy. By bringing into contact the forces of production and those of management, Kennedy was able to avert disaster, but considerable unrest during the interim was unavoidable. At stake was the ability - not so much of U.S. Steel, Bethlehem, or Republic to compete fairly with each other - but rather of the United States to compete with the world. On this phenomenal scale, the government stepped in to reestablish order in the name of national economic security.

It may be easy to project the false impression that the American competitive system works effectively for the nation most of the time. The mass media, as a case in point, spend countless billions to produce a perhaps artificial image of glitz and glamor, when, in reality, there are more than twelve million persons roaming homeless in the streets and unemployment surpasses 8% as measured by independent sources. Eight per cent of the U.S. workforce converts to tens of millions of persons out of work, each of whom is responsible for dependents. The spirit of competition and free-enterprise must not become so dominant in a nation as to deprive large segments of the population of subsistence wages in the name of "efficiency." There has been much debate of this philosophic issue and, at the Congressional level, legislation is frequently enacted to curtail the amassing of wealth in the hands of the few. Anti-Trust Laws were the beginning of this trend. Today, the legal action pending against Bill Gates, for example, is an outgrowth of this anti-monopolistic feeling which surfaces from time to time in the press and within certain social circles, desirous of seeing a shift in the balance of financial power. All of these factors affect the free-market and competitive spirit of the United States.

Shortly after arch-Republican John Sununu left the Governor's Mansion in Concord New Hampshire to become George Bush's Chief of Staff, he was asked, on national television, a series of questions by the Washington press corps. When referring to non-restricted competition and laissez-faire free-enterprise principles, he affirmed that , even though there was hunger and destitution in America, it was important to refrain from crushing the "American Dream."

The American Dream , it is significant to note, is the story of John D. Rockefeller, John Jacob Astor, Donald Trump, Ross Perot, Bill Gates, Howard Hughes and Carl Icahn. This handful of multi-millionaires, indeed billionaires, developed colossal fortunes through ingenious business strategies and by shrewdly mastering the principles of competition. The American Dream, in their case, was fulfilled. In the case of hundreds of millions of Americans, however, it remains an elusive and unattainable Fantasy. Yet, to John Sununu, it was important to hold out "the hope" of such success, even at the expense of other far more humanitarian priorities.

When we look at homelessness and unemployment in this country, and judge the capitalist system on its true merits, we must begin to question the wisdom of continuing to subscribe to the ideas of Max Weber or of John Locke on an exclusive basis. Discussion on an academic level, and in legal circles, is required to examine options for improvement of the effects of competition within American society.

In Canada, for example, there is a special Center for the Study of Living Standards (CSLS) which analyzes social conditions and demographic data, thus ensuring that social needs are met. Key factors, including competition, are analyzed and assessed. Projects dealing with unemployment, for instance, are currently underway.

Table I, below, shows three areas of emphasis which are being studied by the CSLS this year:

* A study of the factors behind the Canada-U.S. unemployment rate gap            

* An analysis of the emergence of business-labor sectoral councils in Canada     

* An examination of the emergence of labor force development boards in Canada
    

Source: Center for the Study of Living Standards - http://www.csls.ca/overview.html

Not only Canada is exploring these issues, but other Western nations, and some Asian governments, have also begun to reassess some of the rules pertaining to unbridled competition within their economies. France, Britain, Canada and Australia have placed restrictions on the growth of monopolies and have encouraged lower level competition to thrive. The basic idea is to allow capital to be distributed as broadly as possible throughout the economy, thus avoiding massive concentrations of wealth and influence. In Saudi Arabia, for example, the Kingdom provides for the basic welfare of all of its citizens, whether gainfully employed or not. In the Netherlands, almost one third of the nation is on public assistance or social security, funded from the proceeds of Royal Dutch Shell and Crown Resources.

Competition is definitely, on balance, an excellent means of inspiring new businesses, furnishing incentives for hard-work, creating improved products and generating capital on a broad basis throughout the country. There is no doubt that for perhaps two-thirds of the people of the United States, the system works well. Nevertheless, attention must be turned, in this country, toward the needs of minority urban populations which seem to be caught in the paradoxical situation of high unemployment, illiteracy, drug abuse and crime. The competitive system must turn its creative energies toward the rural poor in this country where it is reported that one child in four, for example, goes to bed hungry in Appalachia. There is surely enough inventive genius in the American system to resolve some of these problems, perhaps employing ways other nations have used to tackle them, so that the appearance of capitalist efficiency can be transformed into actual efficiency.