Due to our geographical remoteness, German and Japanese bombers were unable to reach the North American continent during World War II. Consequently, we emerged from the war the only major power with its manufacturing base and infrastructure still intact, even enhanced by wartime expansion.
At the war’s end the United States controlled almost two-thirds of the world’s trade and monetary wealth; everybody owed us. We dominated the world politically, economically, militarily and even culturally for almost a decade and were able to maintain this lofty status into the 1960s. Then the rest of the world began to catch up as our urge to innovate lessened.
In the industrial Midwest mills and factories began to close due to outdated technology, automation and increasing foreign competition. This eliminated significant numbers of jobs with insufficient new job creation to replace them as in the past. Cities like Youngstown, Ohio headed toward ghost town status.
But it wasn’t just the jobs that were leaving, our institutions also began to break down. To meet the challenges of two world wars and the worst economic depression in U.S. history we already had the necessary institutions we needed to survive most crises: Congress and state legislatures, the courts, a free press, our churches, educational institutions, business organizations and labor unions.
In the years when we had major economic and societal problems our institutions had the power of self-correction which they used constructively for the most part. But institutions with the ability to self-correct can also have the potential to self-destruct by having too much power.
Even though America’s earlier brand of 19th-century capitalism could be a little heartless and rough around the edges, it provided the freedom, growth and mobility we needed compared to some of the world’s tamer, more closely-regulated mercantilist economies. Economic progress depends on the free movement of capital, technology and labor to meet the ever-changing requirements of a fast globalizing economy.
Contrary to some opinions, in the relatively undeveloped world abject poverty is disappearing at an unprecedented rate. And contrary to some economists on the left, globalization and the liberalization of trade policies have been a bonanza to a great part of the world’s poor. And we must be particularly careful not to confuse absolute poverty, which is practically nonexistent in the U.S. today, with inequality of wealth and income where we probably lead the world.
Today millions of impoverished Asians will willingly give up their back-breaking, dawn-to-dusk toil in the rice paddies for sweat-shop factory work. Although still living in relative poverty, today most of the world’s poor can buy more and better food, shelter, health care and education than they could in the pre-globalized world.
Although life in many parts of the developing world is still far from ideal, people most everywhere are healthier, live longer, have better educations and see a brighter future for their children. Two centuries ago life expectancy in the richest country (the Netherlands) was just 40 years. Today in the world’s poorest nations it is a minimum of 54.
Current studies have shown that as countries get wealthier, they also get happier, better educated and (usually) more liberal politically. Countries ranking high in per-capita income usually also rank high on the World Happiness Scale. Who says happiness can’t be bought?