Maggie's Farm

JM: I have spent something like a quarter of my professional life outside the United States, living and working in the private sector across Europe, Asia, Australia, and Africa. My experiences have increased my already enormous feelings of affection, gratitude, and admiration for the United States, but have also increased my sense of American vulnerability.

Potential “American decline” is an active topic of conversation among policy intellectuals right now. But what I think this talk misses is that this decline has already happened. Living overseas makes this painfully obvious.

The United States was something like half of global GDP in 1945. This declined to around one-quarter of GDP by about 1980. Accepted wisdom and convergence theory agreed at that time that it should have continued to decline. But the deregulation (in the broadest sense) of the American economy that commenced around 1980 managed to retain about this share. During the period since 1980, European and other countries with high cultural affinity for America have been hemorrhaging share. The economic rise of the Asian heartland at the expense of the West is the primary geopolitical fact of our era.

Datasets and analytical techniques they use may seem impressive, but they are very crude as compared to the complexity of human society.
Looking at this from the outside, the political process in Washington seems disconnected from reality. In Washington, it's always 1945. Our almost casual disregard for the erosion of the foundations of our political economy—endless talk but little successful action on internationally uncompetitive K-12 educational results; a widely touted university system that produces more visual and performing arts graduates than math, biology, or engineering graduates; an immigration policy that all but ignores the need to upgrade our human capital; underinvestment in certain kinds of infrastructure, science, and technology; the relentlessly rising tide of social dysfunction among the majority of the American population that does not graduate from college; somehow convincing ourselves that we are uniquely responsible for maintaining global order, when we represent only about 25 percent of global economic output; a continuous trade deficit for more than 30 years; federal government debt of 70 percent of GDP, without any real prospect of achieving fiscal balance, never mind running the budget surpluses that would be required to pay it down, and so on—is shocking and profligate.

The United States can thrive in this new world, but is not destined to do so. In my opinion, it is unlikely to do so without a significant change in direction. Fortunately, I retain great faith in the regenerative capabilities of American society.