What distinguishes America is our system's ability to consistently expose, punish, regulate and ultimately reform those excesses — better than any other. How often do you hear about such problems being exposed in Mexico or Argentina, Russia or China? They may have all the hardware of capitalism, but they don't have all the software — namely, an uncorrupted bureaucracy to manage the regulatory agencies, licensing offices, property laws and commercial courts.This goes much farther than the countries Tom mentioned above, of course- there are many notorious examples of capitalism without regulation turning into a nightmare of greed and kleptocracy, and the notion that there needs to be institutions to defend, regulate, and support capitalism isn't a new idea and shouldn't be a controversial one. Yet it is, because some people seem to believe that capitalism and the markets that it consists of are somehow alien, biological, and unknowable except through the arcane science of economics. This is nonsense, of course- markets and economic systems are made up entirely of and by people, which is why economics remains and will always remain a social science, albeit one that can benefit more from modelling than most. Whenever people forget that, though, it's practically inevitable that disaster strikes.
Indeed, what foreigners envy us most for is precisely the city Mr. Bush loves to bash: Washington. That is, they envy us for our alphabet soup of regulatory agencies: the S.E.C., the Federal Reserve, the F.A.A., the F.D.A., the F.B.I., the E.P.A., the I.R.S., the I.N.S. Do you know what a luxury it is to be able to start a business or get a license without having to pay off some official?
So we get the Savings and Loan scandal.
So we get the Russian Kleptocrats.
So we get the Albanian ponzi scheme.
So we get Asian crony capitalism.
So we get Worldcom, Enron, and all the other imploding corporations, which show that crony capitalism isn't so Asian after all.
So we get Argentina (to an extent.)
So we get endless proof that working capitalism is supported by pillars of bureaucratic regulation, linked by bridges of shining red tape.
It may not be romantic, and it may not be sexy, and it may fly in the face of those who devoutly wish that economics was a natural science instead of a social one, or that believe that There Is No God But Capitalism and Hayek Is His Prophet... but it's the truth.