Sunday, 25 September 2011


Ever since the publication of Democracy in America by Alexis de Tocqueville, there have been attempts to analyze the US and its institutions and what makes it unique as well as 'great' in comparison with the rest of the world. It is not unusual for the US government, think tanks such as the CATO Institute, media and other organizations to publish occasional studies on what makes the US number one in the world and what are its shortcomings that must be overcome so that it can remain number one.

Depending on the ideological/political orientation of the group/individual (s) conducting the study on what makes America great, the outcome is predictable. For example, FOX news and CATO stress the free enterprise principles; an independent university group may stress research universities like MIT and others in that league; a minorities-sponsored group may stress immigration, gender and sexual orientation policy; and so it goes. My own view is to put the positive and negative aspects of major institutions side by side from a synoptic perspective. Part I deals with the political and economic system, while part II deals with the social and cultural aspects of society.


Based on Enlightenment era ideals of freedom and democracy, meritocracy and equality of opportunity, the US has developed a unique institutional system that permits the individual to feel that the body politic represents every citizen on the basis of freedom and participation on the basis of merit-based equality of opportunity. Of course, that is only in theory and the reality is from the theory.

Combining the political philosophy of John Locke and Jean-Jacques Rousseau, and evolving to embrace progressive principles embodied in the Bill of Rights as America was changing in the 19th century, American institutions reflected both the legacy of northwest (Anglo-Saxon) Europe as well the evolution of societal developments with the institution of slavery, immigrants,and women demanding some rights as citizens at the very least, and to gain equal access into the political mainstream under the best of circumstances. In practice, 'equality of opportunity' means within the constraints of a white-male-dominated political party machine behind which are interest groups, among them the large campaign contributors determining the legislative course at the city, state, and federal levels.

While the system has the promise of 'a merit-based equality of opportunity for all', it also has the reality of 'interest group politics'. Moreover, pluralism has its limits within a society that has a tainted history with minorities, a tradition of isolationism shaped by the Cold War from 1947 to 1990, and the war on terror since 1990. While a resounding success story for individuals with money and talent coming from any place in the world, the American political system has had less success in integrating the lower classes into the political mainstream. To the degree that no other 'democracy' is as open to talent and as receptive to business, the American political system has been and remains a success story. However, in a society where class transcends race, gender and ethnicity, the wealthier the individual the more freedom and democracy s/he enjoys and the closer to living the American Dream.


While the US remains the world's wealthiest and most productive economy, followed by China, Japan, and Germany, it is expected to fall into the number two position at some point in the decade. This does not have to take place if China falters and US settles a number of lingering issues from its fiscal structure and balance of payments deficits to over-consumption, high unemployment, and grossly uneven income distribution for a developed country.

While America is the world's foremost market for companies to sell products, and it remains number one for foreign investment - six times higher than China - it stands to lose that position as China, Russia, Brazil, Mexico, India and other Asian and Latin American countries are developing. Again, anything can wrong with these new emerging economies, and the US can do much to improve, but that is speculation. For example, the US is no longer the world's largest car and computer manufacturer although it remains the world's largest foodstuff exporter. While the US has the edge because of research and development, increasingly US companies take their businesses abroad, thus the only benefit accruing to the US is national origin identity for brand names.

Brand name recognition remains the domain of the US, considering that half of the world's top one hundred brand names are American. However, those products are not necessarily manufactured in the US, and the companies manufacturing them - whole or as parts - have their capital spread around the world. For example, is there such a thing as an "American car", has there been for the last three decades or so? Nevertheless, brand name identity is a plus for the US, which is behind China and other surplus countries like Germany in terms of exports.

Another plus for the US is that it has a reserve currency with roughly 60% of the world's central banks holding dollars and the rest of their reserves in other currencies. The greenback is still king but the pretenders to the throne are trying to suffocate the aging ruler. That the US has an uncontrollable public debt at the federal level, and the fact that all but two or three states are insolvent is a sign that monetary decline may be inevitable and the dollar will not remain number one as it has been since Bretton Woods.This means that writing black checks without anything to back them up would become increasingly difficult.

The high entrepreneurial spirit that conservative and libertarian groups praise as a positive trait has the flip side of extreme materialism, greed and hedonistic values to the degree that all of society is defined by such values and which are part of the cause for America's continued decline. The high level of competitiveness is undercut by the reality of a declining social fabric that is impacted by lower wages and disintegrating social safety net in a nation that has many aspects of Third World within it.

Super concentration of capital and weak domestic consumption base will hasten America's decline. Finally, that the US spends on defense and intelligence almost as much as the rest of the world combined is a sign of weakness rather than strength as it appears to apologists of Pax Americana. No empire that goes on a sustained defense spending spree has ever survived to enjoy lasting success and the US is about to learn that valuable lesson from history.

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