by Jacob G. Hornberger

June 23, 2026

I’m always amused whenever I read some criticism of America’s “capitalist” system by some leftist. Leftists rail against the evils of capitalism and cite American “capitalism” as a prime example of such evil.

I’m sure that such leftists are thoroughly confused when they encounter a libertarian. That’s because libertarians also condemn the economic system under which we Americans live. I’m sure that the leftists just don’t get it. How can a libertarian, they think, criticize and condemn America’s “capitalist” system when libertarians are deeply committed to capitalism?

The answer is very simple, but one that all too many leftists are loathe to consider: America doesn’t have a genuine capitalist system. Instead, it has a welfare-warfare state/regulated-managed economy system that is the opposite of a genuine capitalist system.

Leftists are as much a product of indoctrination as other non-libertarian Americans. Beginning in the first grade, they are inculcated with the mindset that America is a free country that has a free-enterprise or capitalist economic system. Thus, as a result of this indoctrination, they are convinced that America has a capitalist system, one that they feel deserves condemnation.

For example, leftists see the U.S. government engaged in foreign interventionism, including attacking Third World countries, initiating wars of aggression, imposing sanctions, embargoes, and blockades, assassinating people, murdering people, kidnapping people, torturing people, and indefinitely jailing people without trial by jury and due process of law. In the indoctrinated mind of the leftist, that’s “capitalism” and deserves to be condemned. The libertarian, on the other hand, recognizes it for what it is — statism — and condemns all this for that reason.

Consider the grants, subsidies, bailouts, special tax privileges, and special regulatory benefits for both individuals and businesses. Since the leftist mindset is that America has a capitalist system, they condemn all this statist junk as American capitalism. Libertarians, on the hand, condemn all this statist junk as “crony capitalism” and not part of a genuine capitalist system. Of course, leftists remain confused because they cannot understand why libertarians are condemning what leftists are convinced is a capitalist system.

Another example is America’s socialist (i.e., central planning) immigration-control system and the brutal and vicious immigration police state that enforces it. Leftists see all the death, suffering, and destruction of liberty and privacy and condemn them as part and parcel of America’s capitalist system. Libertarians, on the other hand, understand that immigration socialism and an immigration police state are the opposite of a genuine capitalist system and condemn it on that basis.

The drug war is another example. Leftists consider it to be part of America’s capitalist system. Libertarians understand that it is the opposite of a genuine capitalist system. Both leftists and libertarians condemn the drug war. However, leftists don’t get it when they see libertarians condemning what leftists are falsely convinced is capitalism.

So, what is a genuine capitalist system? It’s one that comes fairly close to what our American ancestors achieved in the first century of our nation’s existence. No income tax or IRS. No Social Security, Medicare, Medicaid, welfare, subsidies, grants, or foreign aid. No national-security state—i.e., no Pentagon, military-industrial complex, military empire, CIA, NSA, or FBI. No foreign wars. No sanctions, embargoes, or blockades. No economic regulations, including minimum wage. No immigration restrictions — i.e., open borders.

No, it wasn’t a capitalist panacea. There were huge exceptions to a genuine capitalist system, such as slavery, protective tariffs, Jim Crow laws, the Sherman Antitrust Act, the Chinese Exclusion Act, the Mexican War, the slaughter of native Americans, and the Spanish-American War — and ultimately the enormous welfare-warfare state, regulated-managed economy, and paper-money/Federal Reserve system under which we now live.

But at least our American ancestors pointed the way to a genuine capitalist system — one in which people are free to keep 100 percent of their earnings and are free to decide what to do with it — and one in which all enterprise is free of government control, management, and direction — one that has sound money — and one in which there is no national-security state and a policy of foreign interventionism.

What would leftists say if they understood that America doesn’t have a capitalist system? What would they say about the principles of a genuine capitalist system? Undoubtedly, they would still condemn genuine capitalism because of the inequalities of wealth it produces, even if everyone, and especially the poor, is economically better off. But at least they would no longer be making the mistake of falsely believing that what they condemn today is a genuine capitalist system.