"capitalism has contributed to significant gains in economic growth and prosperity throughout its history. But at a time of growing public discontent about rising inequality, heightened competition from economies with different models, and existential threats including from climate chang
The neoliberal model of capitalism present in the United States today and to varying degrees in other Western economies was shaped in the 1960s and 1970s. Commonly cited as a defining moment for this shift was Milton Friedman’s 1970 article for the New York Times, in which he argued that “the social responsibility of business is to increase its profits.” This itself was a move away from Keynesian economics, which emerged as the standard model in advanced economies after the Great Depression of the 1930s.e, capitalism in its current form—and American capitalism in particular—may face its most serious test....
Investment in public goods, from education, training, and skills for human capital development to foundational R&D and infrastructure, has declined relative both to what is needed to enable individuals to have equality of opportunity and participate fully in the economy and to what is required for productivity, growth, and competitiveness. Federal spending on education, infrastructure, and scientific research fell from approximately 2.5 percent of GDP in 1980 to less than 1.5 percent of GDP today...
In addition, changes in individual outcomes have been propelled in part by the shrinking role of institutions, both public and private, which are cushioning individuals to a lesser degree from the effects of the forces at work in the economy. For example, employment protections are now lower, a higher share of healthcare and education costs is private, and guaranteed pension levels have dropped. This pattern of greater “individualization” of the social contract prevailed in the majority of the advanced economies we examined, despite differing market systems and levels of government spending.
Competition (and cooperation) with different economic systems Trends over the past 50 years have largely played out in a global economy centered on Western democracies, with the United States at the forefront. But emerging economies, once viewed primarily as sources of affordable labor or resources, are emerging as large and competitive economies in their own right and proving more dynamic in some respects than the United States. This is leading to an increasingly multipolar global economy. This challenge is best exemplified by the rapid growth and global scale of China..."
