Perspective on the decline of America by Noam Chomsky
American decline is real, though despite piteous laments, the U.S. remains the world dominant power by a large margin. China and India have recorded rapid (though highly inegalitarian) growth, but remain very poor countries, with enormous internal problems not faced by the West. China is the world’s major manufacturing center, but largely as an assembly plant for the advanced industrial powers on its periphery and for western multinationals. For India, the problems are far more severe.
By 1970, U.S. share of world wealth had dropped to about 25%, roughly where it remains, still colossal but far below the end of World War II. By then, the industrial world was “tripolar”: US-based North America, German-based Europe, and East Asia, already the most dynamic industrial region, at the time Japan-based, but by now including the former Japanese colonies Taiwan and South Korea, and more recently China.
At about that time, American decline entered a new phase: conscious self-inflicted decline. From the 1970s, there has been a significant change in the U.S. economy, as planners, private and state, shifted it toward financialization and the offshoring of production, driven in part by the declining rate of profit in domestic manufacturing.
These decisions initiated a vicious cycle in which wealth became highly concentrated (dramatically so in the top 0.1% of the population), yielding concentration of political power, hence legislation to carry the cycle further: taxation and other fiscal policies, deregulation, changes in the rules of corporate governance allowing huge gains for executives, and so on.
A recent study by the Economic Policy Institute points out, these policies are a failure for the large majority, the 99% in the imagery of the Occupy movements — and for the country, which has declined and will continue to do so under these policies. For the majority, real wages largely stagnated, and people were able to get by only by sharply increased workloads, unsustainable debt, and repeated bubbles since the Reagan years, creating paper wealth that inevitably disappeared when they burst.
[Excerpts of article by Noam Chomsky, MIT Professor emeritus]