UNFORTUNATELY, BOTH WEALTH AND INCOME DISTRIBUTION IS SO DISTORTED IN THE U.S THAT BEING THE RICHEST NATION IN THE WORLD DOESN’T MEAN MUCH TO ALL TOO MANY AMERICANS—Who live paycheck to paycheck, and seem to be too busy surviving to fight back.
HERE, I’M NOT ARGUING FOR EQUALITY—JUST A SYSTEM WHICH OFFERS EQUAL OPPORTUNITY AND ISN’T SO BLATANTLY RIGGED.
IT IS MY BELIEF THAT ALL AMERICANS WOULD BENEFIT IF SUCH WERE THE CASE.
RIGHT NOW—IT ISN’T!
I am seriously critical of the current American Business Model—and make no apology for that stance (because I believe it is supported by the evidence).
Nonetheless, I am decidedly not against a competitive free-enterprise system (which is, let me stress, a form of capitalism).
But, the point about capitalism is that it comes in many varieties—like ice cream (though with less sugar)—and some are a great deal more acceptable than others. Putting it simply, some work a great deal better than others—particularly if the interests of the population, as a whole, are factored in. If that is not a concern—and you are happy with a winner-take-all environment, well that is another matter entirely.
Capitalism isn’t one rigid thing. It is an approach, which works exceedingly well—let me stress this—if there are ground rules. Unfettered capitalism also works—but it benefits only a few.
I tend to believe that my kind of capitalism should benefit the many—and I am convinced that it can.
Why so?
Because Northern Europe (plus some other European nations) is demonstrating it right now—and has for many years. Add the populations of all the countries concerned together and you end up with a population roughly equivalent to that of the U.S. so the argument that the U.S. is too large to operate that way does not hold water.
Please note that I’m stressing Northern Europe rather than Europe as a whole because quite clearly some members of the EU are still struggling. However, most of the outliers seem to be heading in the same direction—towards the Northern European approach. As for Italy, it is a riddle inside an enigma—and I have absolutely no idea where it is heading (and I don’t think the Italians are any the wiser). All I can say is that parts of it seem to work a great deal better than you might expect—and it’s a great place to visit.
I have no doubt at all that Northern-European-style Socially Democratic capitalism would work fine in the U.S.—and would be to the great advantage of the American people.
1 September 2015
The US as a whole had a GDP of $17.3 trillion in 2014, making it the richest nation by a large margin (about $7 trillion ahead of China). But, as it is well known, the value of economic activity is unevenly distributed throughout the country. The diagram below shows the relative economic value (in 2014 dollars) of each US state. The states are also grouped by color according to the region that they comprise. The first thing you will notice is that most economic activity is concentrated in three regions: Far West (18.6%), Southeast (21.3%), and Mideast (18.2%). All of these regions contain major US States and cover the US coastline, which is where most large cities are located – so it is not surprising that most of the economic value in the US is generated in these regions.
In terms of states, California (13.3%), Texas (9.5%), and New York (8.1%) have by far the largest economies. The states with the smallest economies are Vermont (0.2%), Maine, Rhode Island, North and South Dakota, Montana, Wyoming, and Alaska (all representing about 0.3% of the US economy).
How has this relationship changed over time? All states have increased their economic outputs between 2011 and 2014, but some have grown faster than others. In terms of regional influence, the Southeast economy has shrunk in relation to other regions by just 0.4% over the last four years, while the Southwest economy has grown by 0.8% relative to other regions. Texas increased the size of its economy by almost $300 billion, more than any other state, growing from 8.8% of the US economy in 2011 to 9.5% in 2014. This growth in Texas was fueled by mining and manufacturing. California grew by just under $300 billion, but only increased its share of the total economy by 0.1%.
It seems as though the largest economies in the US are poised to stay that way for the foreseeable future thanks to healthy economic growth rates. The smaller states are growing in terms of economic output, but in most cases at slower rates.
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