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It is the best among countries, it is the worst among countries, or at least among high-income countries. The USA stands out for its prosperity and brutality. I’ve felt this way about it since I visited in 1966 and lived there during the 1970s.
The sustained prosperity of the US is astounding. A few Western countries have even higher real per capita incomes: Switzerland is one. But real GDP per capita in major high-income countries is below the US average. Moreover, these countries have regressed even further in this century. In 2023, German real GDP per capita was 84 percent of US levels, down from 92 percent in 2000. The United Kingdom was 73 percent of US levels, down from 82 percent in 2000. This relative outperformance is remarkable if take into account how large and diverse the US is or that one would expect catch-up, rather than relative decline, by poorer countries elsewhere. (See charts.)
Not surprisingly, the US economy remains far more innovative than other large, high-income economies. Just look at its leading companies. They are not only far more valuable than those in Europe, but also far more concentrated in the digital economy, such as Mario Draghi pointed out in his recent report on EU competitiveness. Andrew McAfee of MIT emphasizes that “the US has a large and diverse population of hard-working young start-up companies. The EU simply does not exist. America’s arriviste population worth at least $10 billion is worth nearly $30 trillion together — more than 70 times the equivalent in the EU.”
So, the USA is an economic powerhouse, so much so that it persistently runs a large deficit on its capital account. Donald Trump protests. Still, this is a strong vote of confidence.
So, how can such an economic miracle be “the worst among countries”? Well, it is a homicide rate of 6.8 per 100,000 population in 2021 was almost six times that of Great Britain and 30 times that of Japan. Again, the most recent incarceration rate in the US was 541 per 100,000with a total of over 1.8 million people in prisons, compared to 139 per 100,000 in England and Wales, 68 in Germany and just 33 in Japan. This US rate was the fifth highest in the world, behind El Salvador, Cuba, Rwanda and Turkmenistan. It was, incredibly, four times the size of the Chinese one.
According to commonwealth fundmaternal mortality was recently 19 per 100,000 live births for white women in the US, compared with 5.5 in the United Kingdom, 3.5 in Germany, and 1.2 in Switzerland. For black women in the US, death rates were close to 50 per 100,00 live births. Child mortality is also relatively high: according to data from the World Bankunder-five mortality was 6.3 per 1,000 live births in the US in 2022, compared to 4.1 in the UK, 3.6 in Germany and 2.3 in Japan.
The most telling indicator of people’s well-being is life expectancy. Life expectancy in the US is forecast for 79.5 years for both sexes this year. That makes it 48th in the world. Life expectancy in China is projected to be almost as high, at 78 years. In Great Britain and Germany, life expectancy is 81.5, in France 83.5, in Italy 83.9 and in Japan 84.9. Yet the US spends far more on healthcare, relative to GDP, than any other country. This shows great wastefulness, although this low life expectancy in the US has a number of additional explanations. However, what does a high measured US GDP mean if some 17 percent is spent on health, with such poor results?
More broadly, what does US prosperity mean when combined with such powerful indicators of low well-being? These outcomes are the result of gross inequality, bad personal choices, and crazy social choices. Some 400 million cannons they are clearly in circulation. This must be crazy.
The big question for non-Americans, especially Europeans, is whether these pathologies are the necessary price of economic dynamism? Logically, it is not clear why an innovative economy cannot be combined with a more harmonious and healthy society. Denmark would suggest that. One would hope that the scale of the US market, its relatively light regulation, the quality of its science, and the attraction of high-quality immigrants are explanations. But there is this lingering fear that the technologically dynamic society to which Draghi and other Europeans now aspire might demand the rugged, dog-eat-dog individualism of the US. It’s a sobering prospect.
Then there is the related question of whether the relatively high inequality in the US and the insecurity of those at the bottom and middle of the income distribution inevitably lead to what I have called “plutopopulism” 2006: a political marriage of the ultra-rich, seeking deregulation and low taxes, with an insecure and angry middle and lower middle, looking for people to blame for what goes wrong with them. If so, what made the US dynamic, at least in this age of deindustrialization and unbridled finance, has led to the rise of Trump and thus to a shift toward a dangerous new demagogic autocracy.
This in turn raises the most fascinating question of all: Can Trumpism kill the US’s golden economic goose? What ultimately underpinned the US’s rise to prosperity and power were the rule of law, political stability, a sense of national cohesion (despite many differences), freedom of expression, and scientific excellence. Is there not a danger that the weaponization of justice, hostility to science, attempts to curb critical media and, more broadly, the apparent indifference to many constitutional norms, including Trump himself, will threaten these fragile achievements? The Republic of the USA, flaws and all, is perhaps the most impressive success in world history. Could it be that his strengths are now combining with his weaknesses to overthrow that legacy?
Draghi was right: we must try to learn from the US. But today, those who cherish the ideals of legal democracy must also worry about it.
