February 27, 2006

From America With Love


Thanks to the essay-review posted 10 days ago by James McCormick, over the weekend I read William Lewis's book The Power of Productivity. What an eye-opener! The insights that are carefully laid out in this book are of the first importance to anyone who cares about the Anglosphere -- or, for that matter, the future of our little planet.

My summary of James's summary is this: what matters most for the people of any nation is productivity, which results in ever-increasing wealth (i.e., GDP per capita adjusted for purchasing power parity) -- and by far the most productive (and therefore wealthy) people on earth are the Americans.

This insight represents a challenge to the Anglosphere and to every other sphere. It is also, in its own way, more than a bit unnerving and disturbing.

In reading The Power of Productivity, I was struck by the fact that the Anglosphere essentially does not make an appearance. Along the dimensions Lewis measures, the Anglosphere countries other than America are mixed in with Switzerland, Iceland, Denmark, Austria, Belgium, the Netherlands, Japan, Finland, France, Germany, Sweden, etc. Although 3 of the 4 countries that Lewis calls out as having cut the size of government in the last quarter-century are Anglospherean (New Zealand, Canada, and Ireland), the great outlier, over and over, is America. Why? The reasons are legion, but they lead me back to the notion of American exceptionalism as opposed to a strict Anglospheric exceptionalism. Thus the challenge to the very notion of the Anglosphere (at least when it comes to productivity and wealth-creation).

Why is America such an outlier? As I discussed with James via email, America has exerted a kind of magnetic attraction for dynamic immigrants over the last 200+ years. The great thing for America -- and the bad thing for everyone else -- is that these crazy Americans have been pulling in the most entrepreneurial, ambitious, innovative, wealth-creating individuals for 200+ years now. So if you are such an individual in, say Brazil, what are you going to do? You could struggle against the system (or try to work within it) in Brazil, or you could emigrate to America. Same thing for people who want to start software companies in France or Germany (there are loads of them in the States). And we have seen over the years that people like this tend to come to America. This has been going on for so long that we consider it natural. Indeed, even Canada has in many ways been merely a launching point for movement from the rest of the world to America -- over time, some large percentage (I don't recall the exact number, perhaps even 80% in some periods) of people who have immigrated into Canada from other countries have eventually emigrated from Canada to America.

Now, I don't say this in a jingoistic or chauvinistic sense ("America is the greatest nation on the planet" and all that), because I love Canada and the Netherlands and the Czech Republic and many other places I have lived and visited. In a way I find it unfortunate that over the last 200+ years so many dynamic people have come to to America rather than staying in their own countries. It's been great for America and I can't blame them individually, but it may not be good for other countries. (Though one wonders how much progress people like that would have made in their home countries -- perhaps their dynamism would have been wasted and it has been better for the world that they came to America.)

It's tempting to think that "we're all Anglosphereans, therefore we're all alike". And we are alike in many, many important ways, which Jim Bennett has documented at length in his book (high radius of trust, openness, jury trials, decentralization, and all the rest). But at least from the perspective of economic dynamism (resulting in long-term growth of PPP-adjusted GDP per capita), we need to attend to this huge difference between America and the rest of the world -- even the rest of the Anglosphere.

An aspect of Lewis's book that disturbs me a bit is that he is essentially calling for cultural imperialism -- the spreading of the American socio-economic model (not, pointedly, the Anglosphere socio-economic model) across the planet as the best way yet discovered to bring about high productivity and therefore great wealth. So there is a new kind of Anglosphere challenge here: a challenge from America to the rest of the Anglosphere. Lewis quotes anthropologist Marvin Harris to the effect that productivity is what matters most in the long run of human societies (see his book Our Kind, which I have not read yet), because throughout human history it is the high-productivity societies that have swamped the low-productivity societies. And if that is so, then even folks in the Anglosphere have a lot of hard thinking and hard work to do if they want to be an important part of the future. Do they want to adopt some of the more American features of Anglospheric societies, such as more open competition, a larger market sector, and more flexible labor markets? Will they have much of a choice? Can they do so without being perceived as selling out to the damn Americans?

There is a great deal to absorb here.

(Cross-posted at one small voice.)

Posted by Peter Saint-Andre at February 27, 2006 09:41 PM

I have to read this. Between you and James, it keeps getting pushed up the stack. I have a copy. Soon.

If the "American model" is going to be adopted, in whole or in part, our Anglophone cousins are best positioned to do it.

Posted by: Lex at February 28, 2006 09:43 AM

From the 1930s until very recently, America's exceptional economic productivity has existed hand-in-hand with a system of government largely established by Franklin Delano Roosevelt.

If Anglosphere-ians base knowledge on experience (Hume, Locke, Bacon) rather than theory (Descartes, Spinoza, devotees of Lenin) this fact cannot be dismissed with a wave of the hand.

Posted by: Bill White at March 2, 2006 11:24 AM