When Number 1 is Not So Good
Although an unabashed, unapologetic believer in the inherent virtues of both capitalism and entrepreneurial culture to drive economic growth and raise overall living standards, I also believe it is critical to examine one’s beliefs in light of available data. And recently the data in this regard is not looking so good.
To start, the idea that the United States has higher social mobility than other countries – a fundamental pillar of democratic society – is increasingly in question. A Brookings report back in 2007 (prior to the financial crises which should limit arguments on its impact) found that the USA has less economic mobility than Canada and many European countries – even including France, which is the most frequent target of American scorn. Many experts believe this trend has only increased with the effects of the past three years.
The basic idea of American exceptionalism is now under fire, with the counter narrative that the US has largely squandered a unique set of advantages. Even the uber-capitalist publication Business Insider has gotten into the act, chronicling some of the nefarious ways in which America is now “Number 1” – ratio of CEO pay, prisoners, murders, health care costs, and homelessness.
Perhaps most dispiriting is the reflection of Nobel winner Joseph Stiglitz, who looks at income inequality in the United States, and in particular that the top 1% of Americans now receive 25% of the nation’s income and control 40% of its wealth. What this inequality portends, Stiglitz argues, is a host of other issues that are, to my mind, far more fundamental to economic prosperity: diminished opportunity, reduced efficiency, and limited infrastructure investment. And income inequality has a tendency to reinforce itself: wealth begats power, which begats wealth; and another fundamental belief, that the USA has a culture that rewards meritocracy, seems weakened.
These and similar statistics are often used as a wedge to separate one political party from another. That, I think, is misguided. Yet current events offer a final paradox. As Stiglitz notes, we are awash in a surge of democratic uprisings in the Arab world, with societies where…
a minuscule fraction of the population […] controls the lion’s share of the wealth; where wealth is a main determinant of power; where entrenched corruption of one sort or another is a way of life; and where the wealthiest often stand actively in the way of policies that would improve life for people in general.
Let’s hope that remains a description by us, and not ultimately of us.