This is the Merriam-Webster definition of capitalism – an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.

Nowhere in the concept capitalism is there any reference to government involvement, neither in the ownership of capital or investments, nor in the area of regulation. Yet our economic system has been tethered by government for almost 100 years. Long before the current economic meltdown, capitalism was discarded as the guiding force of our economy, being replaced by a mixture of capitalism and government control and interference. Yet, capitalism is blamed for the current situation, not only by our pissy politicians and media, but also by the average Joe. Case in point: I was out playing tennis earlier this afternoon, and between sets, while discussing the economy, one guy went and said it – capitalism has failed us. For an excellent debunking of this myth, read George Reisman’s clarification of government’s leading role in creating this crisis.

We had a president who made a big to-do about the meaning of is, so I’m not surprised that there’s hardly anyone who knows the meaning of capitalism. Concepts are considered fluid; meanings can change to suit the mood. Clinton’s game didn’t and couldn’t change the future of the world, but letting the world think that capitalism has failed us means that it will be almost futile to try and get people to give it a go again.

Capitalism, or rather the system that was close to it over 100 years ago was what catapulted the USA to world leadership. It was the remnants of it that continued to prevent our economy from turning bad for ever. But the current mess up has shown that that is now in jeopardy. With every crisis, we get more regulation. The capitalistic aspect of our society is on its deathbed. Each crisis has had its root cause in government regulation, interference and activity. Each crisis has been bigger than the one before. Each crisis has required exponentially larger amounts of resources to prevent total collapse, resources that the government steals or makes (produces would be an insult to those who do produce) out of thin air, the result of which is the erosion of wealth and the debasement of our currency.

As I write this, we are still in a very tenuous position. The odds are probably 50/50 whether we spiral into an economic morass or whether we proceed into another growth (and I use that word lightly) phase induced by government mismanagement and misallocation of resources. Regardless, on the current course we will hit the proverbial brick wall sometime, one that will make the 1930s look like a party. Maybe not this time, and hell, because there are still innovative and entrepreneurial people in the country who manage to succeed and produce regardless of government, we could even experience the growth spurt to beat all others, before we crash and burn. If it happens, take the opportunity to get your finances in order – essentially, own real assets free and clear and have no debt.

If you are looking for a real stimulus to the economy, you aren’t going to find it. It would require the government to stand up and admit that that institution has ensured America’s demise and that to prevent that running to conclusion, all government regulations are going to be rolled back and government will eventually revert to its correct role, that of protecting the rights of individuals. Capitalism requires the separation of the State and the economy, something so foreign to current culture that even the mention of it results in blank stares. A pity! It’s going to be a long, hard struggle to even get to the point where people respond by saying, Oh really, tell me more.