QBR Print Edition 2021-2022

By: Cindy Lin

Editor-in-Chief

The turn of the 21st century brought with it a competition to conquer the world. The space race, Cold War, and revolutionary inventions were all fuelling humankind’s momentum towards multiple new frontiers. There were, however, clear frontrunners in this contest.

In particular, the U.S. seems to have led the charge. By 1938, the nation was ahead of the rest of the world in GDP. Today, American firms make up 38% of the top 10% of firms and two-thirds of the top 1% of firms globally in terms of economic profit. U.S. military power appears to be ubiquitous, with approximately 750 military bases in north of 80 countries. The demand for American culture and media continues to proliferate; English is the de facto language of business.

From this remarkable success springs American exceptionalism: the notion that the U.S. is uniquely admirable in all aspects, from its institutions to its way of life.

Waking up from the American dream

The concept of American exceptionalism exudes an air of invulnerability and universal supremacy. Yet, the U.S. economy has been stagnating in the first 20 years of the present century; real GDP growth is averaging just above 2%. Economic mobility is slowing: The middle class that is critical to the American economy is being squeezed, having declined from 61% to 52% of American households over the past half-century.

Labour market polarization meant that median wages for middle-wage jobs grew by a mere 1.1% from 2000 to 2019, while median wages for high-skill and low-skill workers grew at 7.3% and 5.3%, respectively. Employment gains were largely driven by alternative work arrangements and part-time work, contributing to job and income fragility.

Despite the U.S.’s unparalleled success, the bottom three income quintiles of society—approximately 150 million adults—have been dealt mixed results in the past 20 years, with the COVID-19 pandemic exacerbating the living conditions of many.

This poses the question: What has changed since 1938?

The fortress crumbles because its foundations are failing

The roots of U.S. prosperity can be traced back to the Second World War. By late 1943 and early 1944, the U.S. was producing almost as many ammunitions as all of its allies and opponents combined to support war efforts. The New Deal programs and agencies in 1939 meant that the federal government became more active in both social and economic activities, leading the private sector by using new capacities to implement large-scale endeavours. American industries, in sum, had answered the call for wartime manufacturing and flourished due to its extensive capabilities.

American manufacturing sectors are now being challenged by infant industries in developing economies. The Great Convergence, primarily led by China following the East Asian miracle, means that inequality between countries is decreasing. On the other hand, inequality within countries, most severely seen in the U.S., is increasing. Technology is overhauling entire industries, which are rapidly changing or disappearing—and employment along with them. American capitalism, simply put, wasn’t adequately equipped to mitigate the shocks of such disruption.

The U.S. is also an immigrant country—much of its success is contingent on its accumulation of international entrepreneurial talent. American immigrants are twice as likely to file patent applications and contribute to the research and development of the country. They have founded over 40% of the companies on the Fortune 500 list. Well-known immigrants include Alexander Hamilton, Thomas Mellon, and Google co-founder Sergey Brin. However, data shows that following Donald Trump’s election in 2016, anti-immigration and racially-motivated hate crimes spiked in counties where Trump won by larger margins.

Under Trump, the American masses, obese from decades of prosperity relative to the rest of the world, saw an opportunity to point the finger outwards. Trumpism began to turn the American people on their country’s very assets that have produced unrivalled results. Education, a privilege that should be a right, plays one key part in ending these sentiments. Yet, tuition at American universities costs approximately $30,165 USD per full-time student, which is nearly double the developed country average of $15,556 USD.

This is how it ends: American arrogance, indolence, and ignorance.

"America is the wealthiest nation on Earth, but its people are mainly poor, and poor Americans are urged to hate themselves."

- Kurt Vonnegut, Slaughterhouse-Five (1969)

The end of the rat race

Though it has been over five decades since Kurt Vonnegut put pen to paper, his words still ring disturbingly true today. Despite its success, there remains many flaws in the American model. Social movements in recent years highlight crucial issues crippling the U.S. and obstructing its path forward. Income disparity ravages the country; bigotry fractures it. There has been some progress seen in certain areas, but there are still ways to go.

In the wake of unprecedented globalization and technological innovation, governments may also need to intervene more to mitigate economic shocks. Americans must relearn to embrace the principles upon which its nation was founded and, most importantly, accept change with an open mind. Tradition can still be celebrated without adherence to its regressive beliefs. The government must work towards democratizing education for the public.

The sun is setting on the American empire, but dawn will cast light on a new epoch of global unification. This time, we must ensure that no person is left behind.