What is the economic system in the United States?

The economic system in the United States is characterized as a capitalist or market economy. In this system, the means of production and distribution are privately owned and operated for profit. The principles of capitalism are rooted in the idea of free markets, where supply and demand determine prices, production, and consumer choices.

A hallmark of this economic system is the encouragement of competition, which drives innovation and efficiency among businesses. Individuals and companies are empowered to make their own economic decisions, including what to produce, how to produce, and for whom to produce, leading to a diverse array of goods and services available to consumers.

While elements of regulation exist to ensure fairness, protect consumers, and address market failures, the foundation of the U.S. economy relies on the tenets of capitalism rather than socialism, command economies, or pure mixed economies. Socialism involves more government control over the economy, command economies centralize economic decision-making, and mixed economies incorporate both private and public elements but may not fully capture the essence of the U.S. system as predominantly capitalist.