The Greatest Nation?
How top-level economic statistics present a misleading picture of the USA’s wealth and power
To begin with the positives, the USA was the first nation in history to be founded on rational concepts. Its Constitution represented a significant advance in the ordering of human affairs. For all its many flaws, omissions, and false assumptions, it nevertheless attempted to provide a coherent framework for the organization of political and civic life. Whereas other nations evolved their constitutional arrangements in a largely haphazard, short-termist, and piecemeal fashion, the founders of the USA did their best to learn from the experiences of others and craft a more adequate basis for peace and prosperity (at least for white men).
The USA had a great many advantages. Being isolated from potential competitors by two enormous oceans, the USA never had to deal with the geopolitical challenges European and Asian nations faced throughout their histories. As the new inhabitants, thanks to European technologies, were able to ruthlessly expel the previous occupants from vast tracts of valuable land, the USA could grow via immigration in a way few other nations could emulate. Inheriting the technological capabilities of Western Europe and producing them at scale also ensured that the USA quickly out-matched its immediate neighbors Canada and Mexico. Even the bloody and still-divisive Civil War of the nineteenth century couldn’t counter these enormous advantages.
The USA did a lot of things right. Its tax laws enabled the rapid industrialization that permitted it to become the arsenal of the world in WWII and the world’s richest nation in the decades since then. Its tax laws also permitted the rapid development of venture capital from the late 1960s onward and favorable treatment of unrealized gains on shares ensured that there was a very big incentive for potential founders to step out of comfortable salaried jobs and create new companies, some of which would go on to dominate the world of hi-tech. Moreover, starting companies in the USA is easy whereas in Europe (for example) the opposite was true for a long time and is still true to a degree today.
Moreover, if an entrepreneur fails in the USA it’s chalked up to a learning experience whereas failure in Europe is…