The Feldstein (2017) article summarizes ten factors that contribute to the United States outperforming other large nations – principally in this article those of Europe – on economic terms. The author points to factors that are structural (the form of the banking system, leading universities) to cultural (the culture of entrepreneurship). Governmental factors include a favorable regulatory environment and a smaller size of government than the European countries against which Feldstein compares the US.
Gehl and Porter (2017) examine the nature of political competition in the US. They use existing competitive frameworks for their analysis, discussing the American political duopoly in terms of its industry structure, target markets, regulatory environment and other factors. Their findings outline the different areas where the political system is failing the average American.
At the intersection of these articles is an underpinning about what the role of government should be. Feldstein sees, for example, a smaller government and thinner regulatory regime as positives, because they lead to a higher GDP per capita. This argument is interesting, but ultimately hollow, in that GDP per capita is not actually the reason why people wake up the morning; it`s not why most people organize into societies. Wealth is good, certainly, but only to the extent that it delivers comfort, happiness and fulfillment. Americans may be wealthier than their European counterparts, but that`s not the only end that matters.
What Gehl and Porter have sought to do is have a much broader conversation – and their work is substantially larger in volume as the result of this expanded scope. Their work looks at the American political system. The features lauded by Feldstein surely exist, but Gehl and Porter are more skeptical about them, in the sense that they argue the political system substantially favors certain actors over others. The average voter, as they point out, has no real influence over policy. As such, policies that promote economic development are driven by the needs of those who do have an influence over policy.
What underpins Gehl and Porter`s argument is that the average American voter is unhappy with government. If government was creating robust economic conditions, then should the average voter not be happy with government? Of course, the answer lies not in wealth creation, but wealth distribution, something Feldstein does not address. His key measure – GDP per capita – averages wealth creation across all Americans, but the realities of wealth distribution are quite a bit different. Americans are faced with a political system that does a lot of things, which Gehl and Porter argue are precisely the things it has been designed to do, but that has come at the cost of fulfilling its mandate to meet the needs of all people.
This takes us to the question…
