WHAT A DISAPPOINTMENT TO THE LEFT AND FAR RIGHT:

The Decline and Fall of Declinism (Alan W. Dowd Tuesday, August 28, 2007, The American)

[T]he declinists were wrong yesterday. And if their record—and America’s—are any indication, they are just as wrong today.

Any discussion of U.S. power has to begin with its enormous economy. At $13.13 trillion, the U.S. economy represents 20 percent of global output. It’s growing faster than Britain’s, Australia’s, Germany’s, Japan’s, Canada’s, even faster than the vaunted European Union.

In fact, even when Europe cobbles together its 25 economies under the EU banner, it still falls short of U.S. GDP—and will fall further behind as the century wears on. Gerard Baker of the Times of London notes that the U.S. economy will be twice the size of Europe’s by 2021.

On the other side of the world, some see China’s booming economy as a threat to U.S. economic primacy. However, as Baker observes, the U.S. is adding “twice as much in absolute terms to global output” as China. The immense gap in per capita income—$44,244 in the U.S. versus $2,069 in China—adds further perspective to the picture.

America’s muscular economic output comes courtesy of the American worker, who is growing ever more productive. Matthew Slaughter of the National Bureau of Economic Research details in The Wall Street Journal how, beginning in 1995, U.S. worker productivity began to accelerate. “From 1996 through 2006 it doubled, to an average annual rate of 2.7 percent.”

Another recent analysis—surprisingly filed by The New York Times—notes that this technology-driven “productivity miracle” has not manifested itself in other developed economies. Citing research (PDF) by John Van Reenen and others at the London School of Economics, the Times concludes that when U.S. firms take over foreign firms, the latter enjoy “a tremendous productivity advantage over a non-American alternative…It is as if the invisible hand of the American marketplace were somehow passing along a secret handshake to these firms.” As Reenen and his colleagues conclude, it appears that the way “U.S. firms are organized or managed…enables better exploitation of IT.”

This should come as no surprise. As Derek Leebaert explains in The Fifty-Year Wound, the information technologies that began emerging in the late 1980s “forced decentralization and demanded the sort of adaptivity made for America.”

So what do these numbers and comparisons tell us? For starters, as historian Niall Ferguson points out in Colossus, they tell us that the U.S. share of global productivity “exceeds the highest share of global output ever achieved by Britain by a factor of more than two.”

They also serve to explain how the United States can withstand not just the human losses and psychological blows of a 9/11 or Katrina, but the sort of economic and financial blows that would have overwhelmed any other country on earth.

What's amazing is that this dominance comes in spite of the social and economic retardation that was caused by the moronic Cold War, as chronicled so well in Mr. Leebaert's book.

Posted by Orrin Judd at August 28, 2007 10:05 AM