America stays unique: Why it's dangerous to learn lessons from the US

Even if the United States’ (US’) economic and military power declines over the coming decades, its cultural power will not. This has often been the case with declining superpowers: Their footprint in the world of ideas and culture stays long after their economies lose their edge. The US was already a larger economy than Great Britain in the 1880s, but it took another 40 or 50 years — and the growth of Hollywood — for the US’ soft power to catch up. 

Soft power is not merely about films and music. One interesting way in which a superpower’s internal dynamics have an effect on the rest of the world is through its internal political debates. One way or another, they become the axis around which domestic political mobilisation in the rest of the world revolves. 

Let’s look at two very different ways in which American politics has infected countries with very different social and economic structures. 

The US has a particular, almost unique, history of racial oppression on its own territory. Some other countries — Brazil, for example — were also partially built by the slave trade, and have a history of legalised slavery as long as, or longer, than America. But the combination of chattel slavery, constitutional civil rights, and generations of racial segregation in the US is not replicable elsewhere. It means that how American politics deals with, or responds to, questions of relations between races or ethnicities is not exactly replicable elsewhere. 

Concretely, it means that when racial resentment in the US explodes one way or another —through Black Lives Matters protests or a mass defection of young Hispanic men to Donald Trump —it is a product of a very particular, unstable racial consensus in a very particular, unstable society. Other countries with ethnic or racial tensions cannot learn a great deal from it. In Europe, racial minorities have a very different history from that of African-Americans; in India, caste discrimination is often compared to racial discrimination, but the successful Hindutva-isation agenda of the Bharatiya Janata Party shows that it is very different in how it can be adapted for politics. The rest of the world can continue to be interested and engaged in how the US moves towards a better racial politics — but must always remember that nothing about it is relevant for us in our countries. 

 

The second way in which the US is unique is in how it approaches the role of government. The legend is that Americans prefer small government. And to an extent this is correct: Government expenditure in the US is around 36 per cent of gross domestic product (GDP), as compared to 41 per cent in Japan or 47 per cent in Sweden.

 

But it is also true that the US simply does not have any conception of what a Budget constraint is. Its federal government deficit as a percentage of GDP is 6.3 per cent, according to the Federal Reserve Bank of St Louis. Mr Trump’s new Budget Bill adds massively to the debt without any real plan to prevent it from ballooning.

 

No other country can get away with such fiscal impropriety — not even the government of the United Kingdom, which has the longest and deepest financial history of any economy. And yet, economic debates and currents in the US — from industrial policy to deregulation and capital gains tax — are believed to have some implication for the economic policies in the rest of the world. Do they really? Even when the most important constraint in public finance — the government’s Budget constraint — does not seem to apply?

 

It is simply dangerous to expect that any country can replicate or learn effective policy lessons from US subsidies, its trade policies, its research focus, its tax structure, or its regulatory debates when all of these are dependent one way or another on the fact that the US Treasury can borrow apparently unlimited amounts of money from the financial markets, and nobody else can.

 

We are all obsessed with the US, and US politics and policy making, and will continue to be for decades. But let’s please do so as interested observers, not as participants, or as students.