Indeed, private investment is always lower in inflationary countries than in noninflationary ones; think of struggling pre-euro Italy versus booming pre-euro Germany.
The American economy has also been spared the aggressions that anticapitalist ideologues, both fascist and Marxist, unleashed in Europe. True, Washington has diverged from free-market principles at times, usually by imposing high tariffs on goods at the request of industrial lobbies. But the normal, publicly accepted form of American production has always been free-market capitalism. American investors and entrepreneurs, unlike their European counterparts, have never lived with the fear that the state would nationalize their investments or factories.
T he overall level of taxation has remained lower in the United States than in Europe, and this has benefited growth as well.
Americans and Europeans spend approximately the same percentage of their incomes on personal consumption, housing, education, health, and retirement. The proper balance between equality and freedom remains the subject of debate between liberals and free-market conservatives. But free choice does appear to be more economically efficient: as economists like Nobel laureate Gary Becker have shown, individual investments tend to be made more rationally than collective, government-directed investments.
Does this claim apply even to long-term investments traditionally made by the government, such as infrastructure? No one can know for sure. In any case, to argue that more public spending would accelerate American economic growth is to ignore the fact that all major European nations have higher levels of public spending than the United States does—and that all are poorer. Government efforts to save or bail out companies that stick with outmoded products, services, or management methods protect the existing order at the expense of innovation, growth, and future jobs.
European governments resist creative destruction by means of extensive labor regulations, which economists blame for the fact that over the long term, unemployment has been higher in Europe than in the United States.
F ixing an ailing economy can be difficult in a democracy. Indeed, as history shows, many popular responses to economic crises—closing borders to immigration and free trade, hiking taxes, or printing money excessively and driving up inflation—can do incredible damage to long-term growth. In the current sluggish economic environment, the remarkable history of American dynamism is thus more instructive than ever.
Policymakers have lost sight of these fundamental principles in recent years. The next era of American prosperity will be hastened when they return to them. Until recently, the Federal Reserve had maintained a predictable currency, encouraging investment. Wikimedia Commons. Send a question or comment using the form below. This message may be routed through support staff. More detailed message would go here to provide context for the user and how to proceed.
City Journal search. City Journal is a publication of Manhattan Institute. Search search. Company limited by guarantee and incorporated in England and Wales No. Search powered by Algolia. Website by Tuple. The United States Prosperity Index USPI What is Prosperity? What is the Index? Key Findings. Using the Index. The Working Group. About the Legatum Institute. About the Donors. State by State. In response to the excesses of 19th-century capitalism and political corruption, a reform movement arose called "progressivism.
The goals of the Progressives were greater democracy and social justice, honest government, more effective regulation of business and a revived commitment to public service. In general, they believed that expanding the scope of government would ensure the progress of U. The years to marked the era of greatest reform activity. Many states enacted laws to improve the conditions under which people lived and worked. Child labor laws were strengthened and new ones adopted, raising age limits, shortening work hours, restricting night work and requiring school attendance.
In January , Germany declared unrestricted submarine warfare against all ships bound for Allied ports. After five American vessels had been sunk, Congress declared war on Germany in April An armistice ending World War I was declared on November 11, Senate did not ratify the treaty, and the United States did not participate in the league.
0コメント