Yves here. The United States was once truly exceptional, often in commendable ways. Satyajit Das explores how the factors contributing to that remarkable ascent are frequently misunderstood or mischaracterized.
By Satyajit Das, a former banker and author of numerous technical works on derivatives and several general titles: Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives (2006 and 2010), Extreme Money: The Masters of the Universe and the Cult of Risk (2011), and A Banquet of Consequences (2016 and 2021). His upcoming book, The Everything Bubble: A Guide to the New Age of Financial Speculation and Phantom Wealth, is set for release in 2027. Das has also written on ecotourism, including In Search of the Pangolin (2006, co-authored with Jade Novakovic), and Wild Quests: Journeys into Ecotourism and the Future for Animals (2024). This piece expands on an essay originally published in the New Indian Express.
As the United States marks the 250th anniversary of its independence, it is important to reflect on its remarkable journey.
Historical and Geographical Advantages
At the heart of America’s rise were its history and geography. The New World offered a fresh start for European colonizers, who were escaping the burdens, divisions, and conflicts of the Old World. Shielded by two “beautiful” oceans, as President Donald Trump described them, the continent largely avoided major wars on its soil beyond the American Revolution, War of 1812, Civil War, and Mexican-American War.
Resource Richness and Immigration
America, being the third largest continent, is endowed with fertile soils, abundant freshwater, forests, and valuable minerals like iron ore, coal, and oil—resources often seized at great human cost. Immigration played a significant role, as countless newcomers invigorated the economy with their drive and determination. In the 20th century, America attracted talents from across the globe, with many fleeing conflicts or seeking opportunities. Foreigners have also been pivotal in U.S. industries and scientific advances, including in the development of nuclear weapons. Today, over half of Silicon Valley’s tech workforce is foreign-born, trained in their home countries.
Industry and Innovation Landscape
Key sectors such as agriculture, hospitality, and construction have long benefited from affordable immigrant labor, particularly in demanding roles. An abundance of resources bolstered a robust agricultural and industrial foundation, which further reinforced military strength.
The belief in America’s free enterprise system is a bit overstated. Public investment in infrastructure, education, and research—such as funding from the Department of Defense’s Advanced Research Projects Agency—has been crucial. Innovations like the Internet and Google’s search engine received government support, while American industry benefited from protective tariffs.
Challenges to the American Dream
Low wages remain a critical issue. Many G20 nations offer substantially higher minimum wages than the U.S. level of $7.25 per hour. Although some states have raised this minimum, America’s Gini coefficient, a measure of income inequality, is higher than in many comparable economies and has worsened over time. The American culture of ‘getting rich’ and the belief that anyone can succeed contribute to the acceptance of these disparities. Entrepreneurs often view bankruptcy as a normal part of their journey.
The status of the U.S. dollar as a reserve currency in the post-war era enabled American businesses to reduce currency risk and allowed the government to borrow extensively, facilitating large budget deficits and enhancing U.S. financial markets. A history of strong governance and the protection of rights instilled confidence among domestic and foreign investors.
Declining Advantages
However, many of these advantages are fading. America’s agricultural output is being compromised by deteriorating soil quality, extensive use of fertilizers and pesticides, and climate change, which affects rainfall patterns, raises temperatures, and increases wildfires. Practices like monoculture farming have heightened susceptibility to diseases. Many raw material reserves are depleting; for example, estimates indicate that the U.S. has around 17 years’ worth of proven oil reserves, 18 years for natural gas, and over a century for coal, although these numbers vary based on consumption and extraction technologies.
Additionally, deindustrialization and the outsourcing of production have undermined the industrial base of the nation. Many businesses have shifted focus from manufacturing to services, branding, and marketing. Companies like Tesla present themselves as tech entities, recycling ideas originating from Thomas Edison and Henry Ford while lagging behind competitors like China’s BYD. Industrial stalwarts such as GE and Boeing are experiencing decline, and once-influential innovation hubs like Bell Labs and PARC have lost their relevance.
Education and Workforce Challenges
This situation has been exacerbated by the loss of skilled labor. Despite disparities influenced by expensive private schooling, American students rank 28th and 12th out of 37 OECD countries in mathematics and science, trailing behind other industrialized nations. Aspirations among American youth often lean towards becoming celebrity influencers, online content creators, or professional athletes, reflecting a declining interest in STEM professions and increasing reliance on foreign expertise in critical sectors.
Military and Societal Strain
Meanwhile, the military, heavily reliant on sophisticated technology, has struggled against adversaries adept at low-cost, asymmetric warfare, often enduring prolonged campaigns. Society exhibits signs of distress, as seen in rising mortality rates associated with suicide, substance abuse, and alcohol-related deaths, all linked to broader social and economic problems.
Redefining Greatness
As President Donald Trump aims to ‘Make America Great Again,’ this motto, while catchy, fails to grasp the complexities of American history. True restoration of greatness necessitates addressing the underlying societal trends, rather than perpetuating division for political gain. The current administration’s approach fosters xenophobia and racism under the guise of promoting homeland security, further alienating the essential foreign talent needed for growth. Foreign researchers and professionals are increasingly seeking opportunities outside the U.S., which was once a top destination.
Threats to Stability
The perceived free-enterprise system has transitioned into a situation where wealthy insiders manipulate the system through significant campaign contributions. The dollar’s dominance faces challenges from various factors—including foreign asset seizures and sanctions—threatening its status. The rule of law has become precarious, undermined by arbitrary presidential actions, disregard for court rulings, and a politicized judiciary that targets adversaries. Unilateral claims on international assets weaken the protection of property rights and deter foreign investment.
Socioeconomic Divisions
American society is grappling with instability, marked by longstanding divides along racial, economic, and social lines. New sentiments of resentment towards an intellectual elite further complicate consensus. As Pat Buchanan articulated in 1994, “it is blue-collar Americans whose jobs are lost when trade barriers fall.” The increasing alienation of the working class from the policies promoted by the elite raises concerns about the potential for civil conflict.
A Grim Transition
Instead of reclaiming greatness, the U.S. appears to be morphing into a First-World kleptocracy, characterized by high tariffs, unsustainable debt, budget deficits, and deep-rooted corruption. For those looking for parallels, the reigns of Idi Amin in Uganda and Mobutu Sese Seko in Zaire provide cautionary tales.
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