The "American Model" serves as a point of reference in discussions of economic policy around the world, especially in Europe. Many claim that the American version of the free market represents an ideal type - it is the highest form of capitalism. Senior Scholar James K. Galbraith argues,...

High employment in America stems not from flexible wages, but from institutions that foster high effective demand, especially in health care, higher education, housing, and the spending of retirees. These institutions combine public and private revenue sources so as to establish soft budget...