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To understand this, we must first note that only some ideas promoted by socialists have become commonly accepted. These were the least radical of the socialists' ideas. True socialism has not been accepted. True socialism is antithetical to American values because it does away with the rights and responsibilities of the individual and gives immense power to the government.
It is true that Americans have accepted more state intervention in the economy and our lives than would have been imaginable in the early 1900s. Some would argue that we have moved too far towards socialism. However, these moves have actually been relatively small adjustments to capitalism. The government may regulate capitalism to protect workers and society to some extent, but it does not go very far (compared to European countries) towards actually owning companies or towards trying to enforce truly strict and invasive regulations.
The reason for this is that we believe in individualism and we fear the state. We may think that big businesses can and do harm us, but we are afraid that the state would harm us worse if we moved to socialism. Our desire to live by "rugged individualism" and our suspicion of government continue to make socialism a "bad word."
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