Has the American style "Free Capitalistic Economy" totaly failed or is there a middle path between "Capitalistic & Socialistic"

We can't give a stone to the dog in the well, everything has two sides - Double Blade Sword.

Free-Market-Economy needs three foundations to support:

First is that there is a well structured rules, everything can run predictably;

Second is that no asymmetry information, the transaction cost is ZERO;

Third is that the participators are mature enough and equally, which means that they know the equal information and have common knowledge to do decision.

Rationality assumption is living with a real situation that is limited-rationality.

When the market haven't met these assumptions, maybe, as you said there should be "middle path" in place to manage the market, which is probably the hand of macro policy and supervision.

BTW: As Deng Xiao Ping said, "Capitalistic & Socialistic" is not a good way to discuss economy policy. In my opinion, the difference between "Capitalistic & Socialistic" is mainly related to the regimes' vision, mision ,and some times, property right's belonging.

As i have mentioned in some other place, COMMUNIST is not only the goal for socialistic countries, but the goal for the human beings, though it's not clear and practical enough at sight.