September 3, 2011

JUST A MATTER OF ENDING THE WAR ON DYNAMISM:

America's Demographics and Dynamism: Amidst the gloom and doom, there are reasons to believe America will remain the preeminent global economic power. (Irwin Stelzer, 9/03/11, Weekly Standard)

The American economy still produces more goods and services than the next three largest economies (Japan, China and Germany) combined. And is likely to hold that position as successive Japanese governments wrestle with decades of stagnation, China attempts to cope with the problems created by its centralized economic management and currency manipulation, and Germany wallows in a eurozone financial crisis that seems to worsen by the day. America's per capita GDP exceeds that of emerging rivals such as China and India, by more than ten and almost fifty times, countries that declinists say will soon overtake us economically and in other ways.

Then there is the good demographic picture. The American population is expanding "in the midst of a global demographic slowdown," according to Joel Kotkin, distinguished presidential fellow at Chapman University. In a developed country such as the US, he notes after analyzing reams of data, a growing population "offers the hope of expanding markets, new workers and entrepreneurial innovation" -- new hands and brains to produce things, rather than merely the mouths to feed that so worried Thomas Malthus.

Better still for America's long-run prospects in a globalized economy, by 2050 about one-in-three citizens of most developed countries in both Europe and East Asia will be older than 65, compared with only one-in-five Americans. Yes, our baby boomers will soon want the joints and organs needed to keep their golf games up to par. But in relative terms, concludes Kotkin, America "will maintain a youthful, dynamic demographic".

Some measure -- albeit an imperfect one -- of the benefits of that "youthful, dynamic demographic" can be seen by counting the US patents issued to inventors, by country of origin. Between 1997 and 2010, the number of patents issued to American-based inventors exceeded by far all other patents issued to all other countries in the world combined. Americans received 2.3 million patents, with Germany in second place with 286,000. Inventors in Britain and Taiwan were the only other countries to receive more than 100,000 patents.

Which doesn't begin to capture the edge America's entrepreneurial culture and rule of law gives it in the long run. Tales of Silicon Valley are legendary: foreigners from British prime minister David Cameron to Russian president Dmitry Medvedev travel there to see how they might duplicate American dynamism. It is a special feature of the United States that its entrepreneurs, many immigrants, boast that a person hasn't taken enough risks if he has not gone bankrupt at least once by the age of 35.


The tough part of re-liberating the American spirit is getting a Congress that supports the free movement of goods and peoples.


Posted by at September 3, 2011 7:37 AM
  

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