Can America Become Extraordinary Again?

“American exceptionalism” is not a jingoistic fantasy. For two centuries it has been firmly based on empirical realities. Production in the new United States in 1776 was perhaps one-fourth that of its mother country, Great Britain. Only a century later, the United States produced more goods than the British, and by its bicentennial in 1976, the United States was the world’s leading superpower.

Signs of extraordinary achievement were everywhere. The United States witnessed the largest sustained immigration the world had ever known as people flocked to American shores. There were so many that the nation decided to limit admission quite severely from the 1920s. America’s global leadership did not come from random luck, superior location, or natural resources. Its 20th-century rival, the Soviet Union, had far more people and land and at least as many valuable minerals in 1976.

But fast forward to 2022 and things don’t look the same. American economic superiority has declined significantly. Polls show that a significant majority of Americans believe the nation is headed in the wrong direction. Annual output growth has fallen significantly (to 2.35% between 2000 and 2020 from 3.93% between 1950 and 1970). America’s enviable reputation for curbing misery, poverty, and cruelty—at home and abroad—has also eroded. The grisly retreat from Afghanistan is just one example. America doesn’t seem so “extraordinary” anymore.

To understand why, let’s consider five relevant factors.

A sharply declining work ethic. In January 2000, 64.6% of the non-institutionalized population of working age was employed. In July 2022, the share had fallen to 60%. Had the rate remained at the 2000 level, the U.S. labor force would have seen 12.1 million new entries—well above the Bureau of Labor Statistics estimate of job openings today. While the pandemic initially played a role in limiting labor force participation, the current shortfall reflects another culprit: huge increases in government payments, such as food stamps and Medicaid benefits.

A declining sense of fiscal responsibility. In the country’s first 140 years, the federal government had 101 annual budget surpluses and only 39 deficits. That changed with the Keynesian revolution of the 1930s, which has only intensified in this century. The gross national debt now exceeds the annual gross domestic product – something previously only seen on rare occasions, such as the period immediately after the Second World War. The last time the United States balanced its budget was 21 years ago, in fiscal year 2001. The deficit has since increased under Republican and Democratic presidents. Even more ominous are the underfunded liabilities for Social Security and Medicare, which will impose severe burdens on the next generation of Americans. Instead of addressing this, the Biden administration has added to the fiscal chaos by pausing or canceling student loan obligations.

A growing lack of respect for laws, regulations and religious commandments. With some notable exceptions—namely, slavery and segregation—Americans have historically been a rule-abiding people, respecting laws embraced by secular and religious tradition. National peace and prosperity depended largely on public appreciation of property and human rights. People obeyed economic agreements and considered harming others not only illegal but sinful.

In recent decades, this view has become far less widespread. Church membership fell to 47% in 2020 from 70% in 1999. The reduction in serious crime that began in the 1980s has reversed with a vengeance. Large-scale riots erupt over perceived injustices – such as police use of force – leading to damaged property, loss of life and increased fear and distrust. “Thou shalt not kill” and “thou shalt not steal” no longer command the fearful respect they once did.

A decline in respect for free markets and a rising collectivism that erodes investment and entrepreneurship. It is no coincidence that the Industrial Revolution and its aftermath arose because of the rise of thinkers like Adam Smith and John Locke and inventor-entrepreneurs like James Watt, Thomas Edison and Steve Jobs. Limits imposed by kings and bishops were displaced by market incentives for entrepreneurs. What Deirdre McCloskey aptly called “the Great Enrichment”—the beginning of extraordinary growth in income that began in the early 1800s—reached its greatest expression in America. But today, collectivist government power and regulation undermine such entrepreneurial initiatives, from fracking to health care.

An increase in ignorance. Despite having instant access to more information than their parents could have dreamed of, today’s youth increasingly know less about the world around them. On the 2018 Program for International Student Assessment – ​​an international assessment in math, science and reading for 15-year-old students – Americans scored lower than their peers in Asian powerhouses like China and Japan and in European allies from Britain to Germany.

American universities subordinate academic achievement to ideology while curtailing free speech—the lifeblood of intellectual progress and prosperity. Teachers’ unions limit competition. Knowledge of the past is particularly tainted as schools either downplay or distort the nation’s history. The effect is a decline in patriotism and love of country, loosening the glue of national unity embodied in the motto Out of many, one.

Adversity is not new to America. George Washington’s army faced it at Valley Forge. Abraham Lincoln confronted it during the Civil War. The nation endured it in Pearl Harbor and the 9/11 attacks. The United States has faced and overcome dangerous challenges before. But to be unique again will require reclaiming and practicing what makes America uniquely special. It will require a project of rediscovery – to find something that the nation not so long ago abandoned.

Vedder is professor emeritus of economics at Ohio University, senior fellow at the Independent Institute and author of “Restoring the Promise: Higher Education in America.”

Jimmy Carter lost the 1980 general election by a landslide to Ronald Reagan, so it’s hard to understand why Joe Biden continues to follow Carter’s ‘malaise’ playbook today. Bettman via Getty Images/Shutterstock Composite: Mark Kelly

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