An Analysis of the Nature of Capitalism and the Decline of American Economic Power

A strong and integrated economic system is a combination ofcoordinated components of hard and soft power. Relying solely on military power and hard power and ignoring human capital and mobilizing the masses as soft power, causes the gradual decline of the system. Despite being the world's largest economy with $ 21 trillion and the largest military spending in the world ($ 732 billion), the United States ranks seventh in the world in terms of per capita income ($ 65,000) and has a Gini coefficient (Income distribution index) of 0.852 and indicates a highly unequal distribution of income and wealth. The income gap between white and black households is also widening sharply. The racism perception index (zero to one) in the United States was reported at 5.18 out of 76 countries, ranking it 13th. These stylized facts indicate a positive relationship between increasing military spending and increasing poverty and injustice in American society. This study, with the help of time series data from the period 1970-1970, shows that with increasing military spending and inciting war, inequality and the poverty-rich gap in the United States is increasing.