Why “American Decline” Is Overblown
It is easy to criticize America these days. Many on both the right (Glenn Ellmers) and left (Umair Haque) make a living selling “American decline.” Others enjoy smelling the seemingly greener grass on the other side of America’s northern border. Fear and apocalyptic prognostications sell. Just ask Donald Trump.
Most of these criticisms, however, are overblown and hyperbolic. America still works. In fact, by many metrics, it is firing on all cylinders and thriving. Of course, there is always room for improvement in this grand experiment of democracy and self-government.
In this article, we’ll run through some of the key metrics that measure America’s position in the world and whether there is evidence of “American decline.” From economics to democracy and civil liberties, it is anything but doomsday for America, despite what some may want you to believe.
American Companies Dominate Market Cap Leaders
Market capitalization is the measure of a company’s total number of outstanding shares multiplied by its current share price. Take a look at the current top 10 companies in the world by market cap and tell me what you notice.
Eight of the ten companies on this list are American corporations. They may be global companies, but their headquarters and primary corporate offices are in America. Saudi Aramco should probably not even qualify given it is largely state-funded by the government of Saudi Arabia.
In case you think I might be cherry-picking, let’s expand the list. America still dominates. Of the top 20 companies by market cap in the world, 14 are American, along with 33 of the top 50.
These American companies collectively employ millions in the United States and globally. Many of these jobs are highly paid and enrich the tax bases of the states and localities where they do business. While an inordinate amount of wealth sits with their respective CEOs given their stock-centric compensation (looking at you, Musk, Bezos, and Zuckerberg), the success of these companies has lifted the wealth of millions who work and invest in them. So is there an American decline? The global market cap list suggests otherwise.
Overall Quality of Life – America Is Good, Not Great
One metric America’s critics love to highlight is overall quality of life. Many on the left idealize Europe’s Scandinavian countries and social democracies, craving for that lifestyle in America. Most of their grievances on America’s quality of life, however, are overblown and hyperbolic. Let’s look at the numbers and what’s driving them.
According to Numbeo.com, Denmark and Finland rank in the top 5 for quality of life. But America comes in at 17th, ahead of Canada, France, and Belgium, all countries often cited as “ideal” social democracies. While the 17th position is nothing to brag about for a country that should be the “leader of the free world”, it is nothing close to China (#64), Russia (#70), or even Hong Kong (#72). See the top 37 countries by quality of life below, along with additional information on how this site measures “quality of life.”
Quality of Life Index (higher is better) is an estimation of overall quality of life by using an empirical formula which takes into account purchasing power index (higher is better), pollution index (lower is better), house price to income ratio (lower is better), cost of living index (lower is better), safety index (higher is better), health care index (higher is better), traffic commute time index (lower is better) and climate index (higher is better).
Current formula (written in Java programming language):
index.main = Math.max(0, 100 + purchasingPowerInclRentIndex / 2.5 – (housePriceToIncomeRatio * 1.0) – costOfLivingIndex / 10 + safetyIndex / 2.0 + healthIndex / 2.5 – trafficTimeIndex / 2.0 – pollutionIndex * 2.0 / 3.0 + climateIndex / 3.0)
Strong American Purchasing Power and Property Price-Income Ratio
Two of the primary inputs into the quality of life measurement are a country’s purchasing power and property price to income ratio. The United States currently ranks #2 and #3 in each of these respective categories. Only countries like Switzerland beat the U.S. consistently.
The advantage the U.S. has over a country like Switzerland though is that the cost of living is much lower in the U.S. than Switzerland. So while the Swiss may have strong purchasing power – given the strength of the Swiss Franc – this is negated by the extraordinarily high cost of living in Switzerland. The U.S. is actually modest by comparison (#22 compared to Switzerland’s #1 ranking for highest cost of living).
People also often forget that the world uses the greenback for international trade and almost all currency valuations. The U.S. dollar is the world’s reserve and base currency against which all other currencies are measured. And there is almost no competition to the dollar’s dominance, not even by the Euro.
Americans are paid in dollars. While there is a strong need for greater wage growth and minimum wage protection, comparatively speaking, the median American wage is competitive globally. It ranks 5th in the world, which helps America have one of the lowest property-price to income ratios in the world. This means that property is generally more affordable in America than in the rest of the world when accounting for a country’s median income.
America Is #2 In GDP (PPP)
If the information and data above were not enough to convince you that American decline is overblown, let’s measure America’s economic productivity against the rest of the world. PPP stands for Purchasing Power Parity, which is a common statistic in macroeconomics to compare “economic productivity and standards of living between countries.” This data from the International Monetary Fund uses the PPP “basket of goods” approach to measure GDP, which puts America just behind China at the top of the leaderboard. Given China’s recent economic woes, they may not be the leader of this metric for long.
America’s Democracy Score Needs Improvement, But All Hope Is Not Lost
Finally, the metric critics have been waiting for: America’s Democracy Index Score. The Economist Intelligence Unit (“EIU”), which is part of The Economist Publishing group, started a global democracy index in 2006. Since then, democracies globally have not fared well as authoritarian groups and regimes have gained more traction and power in the past decade.
The United States received its lowest score yet in 2020 (7.92 out of 10), which ranks 25th out of 167 countries analyzed by the index. It attributed the lower score primarily to the fact “public trust in the democratic process was dealt a blow by the refusal of Donald Trump and many of his supporters to accept the election results.”
It’s true that American democracy is suffering from low levels of trust in institutions and political parties, dysfunctional government (thank you, Mitch McConnnell), and deep societal polarization that makes compromise or consensus almost impossible. Far right groups require deprogramming and far left groups often need reality checks and history lessons (i.e., not everything can be free). Needless to say, American democracy is currently a mess and I’m not here to debate EIU’s conclusion that America is a “Flawed Democracy.”
With that said, it is far freer by comparison to the rest of the world. Far right extremism and misinformation are existential threats, but nothing compared to what America has faced and survived before (see the Civil War). America may already be in a “Cold Civil War” given the political polarization which inevitably seeps into all other parts of life. But I would argue that most of this goes away once the head of the snake disappears.
Yes, I’m referring to Trump. His unique ability to bring together a coalition of blue collar workers, people who distrust government in any form, and the 1% who are interested in lower taxes, is not replicable by anyone else in the current Republican Party. It remains to be seen who will carry the torch once Trump departs the scene.
Some might argue that the attempted coup on January 6th was only the warm-up act, but that underestimates American institutions and the will of the majority. Trump and his more extremist followers do not comprise or represent a majority of Americans. The threat must be taken seriously, and politically motivated violence must be resisted, but that doesn’t mean we need to ring the fascist fire alarm quite yet.
The Audacity To Hope
America still works. One trait that has separated America from the rest of the world throughout history is its willingness to hope. To dream. To pursue happiness for a brighter tomorrow. That is why the arc of the moral universe in America generally bends towards justice.
Remember this point when you read the likes of Ellmers who want you to think that “most people living in the United States today – certainly more than half – are not Americans in any meaningful sense of the term.” Or when you come across another catastrophic and apocalyptic article from the likes of Haque. Fear sells. Fear gets the clicks. American decline is a sexy perspective that both sides of the aisle actually agree on, albeit for different reasons. Optimism and the audacity to hope sound like idealistic pipe dreams by comparison.
If America and other democracies around the world are to improve, optimism and hope are necessary ingredients. We will never make progress with catastrophe porn alone. Citizens of democracy need cool heads and clear thoughts to think through and address the many threats facing the democratic ideal of self-government today. Alarm bells should be rung where there are clear and present dangers, but we cannot lose perspective. Which is why the metrics above are important because after all, American decline is not and does not need to be reality.
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