Something happened in the 1980s. Other advanced economies were closing in on America in terms of real per capita GDP. Then the gap began to widen. Less regulation. Lower taxes. More markets. More growth. More prosperity.
Other nations went this route, too. But few did it like the U.S. of A.
Now that model is under fire. Free-market capitalism is out, state-managed capitalism is in. On Monday, the World Bank will release “China 2030,” a major report on the future of the Chinese economy. And guess what? It is going to recommend that China move away from state-managed capitalism:
The report makes a number of recommendations for restructuring China’s economic growth model, including scaling back its vast and powerful state-owned enterprises and making them operate more like commercial firms. It also urges Beijing to overhaul local government finances and promote competition and entrepreneurship … Domestically, privately owned firms often complain about the lack of competition and the fact they cannot access financing from commercial banks, which prefer to lend money to other major state-owned enterprises.
Yet that is the direction some want America to take. More subsidies. More government intervention. Big Business joining with Big Government.
So long, free-market capitalism. Hello, state-managed capitalism. A new direction.
If it happens, what will that chart look like 10 or 20 years from now?
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Something to note. Europe was still recovering from WW2. Also, the wealth is more evenly divided in the European countries (in general, but I think it’s a pretty solid statement, doesn’t apply to every US state though). That’s about preference however.
Also Scandinavia isn’t coverd here, having very socialistic policies you might want to include that. And Japan has had similar growth to the US. Starting from a lower point however. They also have a rather socialistic society.
There’s no doubt in my mind nothing but the free-market model works for the US, but it’s not the universally best model. There’s too many factors to account for, culture is among the biggest.