Actually existing capitalism

"Actually existing capitalism" or "really existing capitalism" is an ironic term used by critics of neoliberalism and capitalism. The term is used to claim that many economies purportedly practicing capitalism (an economic system characterized by a laissez-faire free market system) actually have significant state intervention and partnerships between private industry and the state. The term mixed economy is also used to describe economies with these attributes. The term seeks to point out discrepancy between capitalism as normally defined and what is labelled as capitalism in practice, and to claim that (1) capitalism as defined does not and will not exist and (2) actually existing capitalism is undesirable. The term is used as a response to the economic doctrines that have dominated western economic thought throughout the neoliberal period. Critics point to the use of regulation to avoiding economic problems such as acute commodities fluctuations, financial market crashes, monopolies, and extensive environmental damage as examples of how capitalism as defined does not match actually existing capitalist economic systems.

Capitalism Defined 
Capitalism is defined as an economic system with the following attributes:
 Informed consumers making rational decisions regarding their purchases
 Perfect competition, which results in (1) easy entry and access to the marketplace; and (2) long run profits and surpluses are not possible, although short term booms may be
 Private ownership of the means of production

Capitalism in Practice

Technical problems with capitalism in practice 
Perfect competition is only theoretical, it has never existed nor is it possible to exist. Capitalism as defined cannot exist. Any economy that claims to be capitalist is actually some other type of economic system, i.e. only has some capitalist features. Actually existing capitalism is also used to imply that current understandings of economics would need to incorporate the impossibility of capitalism and no longer use the definition of capitalism as a starting point with which to analyze an economy.

Example: DeLorean Motor Company 
John DeLorean, was unsuccessful at launching his automobile company because of market barriers; his competitors were able to produce automobiles cheaper. Under true capitalism, DoLorean should have been able to produce his automobile, bring it to market, and compete. His company was unsuccessful because of market barriers, i.e. the automobile market did not have easy entry and access.

Actually Existing Capitalism

Modern Usage 
In modern economics discourse, Actually Existing Capitalism can be understood as a critique of economics teachings that are focused on having and preserving a free market or capitalist system. Specifically, the term is primarily directed at the Austrian School or the Chicago school of economics, as these are economic schools of thought that strongly advocate for capitalist systems.

See also 
 Schools of economic thought
 Keynesian economics
 Austrian School
 Chicago school of economics
 Saltwater and freshwater economics

References 

Category:Capitalism
Category:Liberalism