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1/29/13

Why America can’t be more like Scandinavia - by ames Pethokoukis

“I believe in American exceptionalism,” President Obama said back in 2009, “just as I suspect that the Brits believe in British exceptionalism and the Greeks believe in Greek exceptionalism. I’m enormously proud of my country and its role and history in the world.”

But thinking America is exceptional is not just about expressing a natural civic pride in the home team. America remains an unusually important nation, the Indispensable Nation, really. There is, of course, its role as the planet’s military superpower. In the After America alternate history series, an energy wave disappears most of the USA and almost immediately, as the book’s description aptly puts it, “the forces of order and anarchy wage all-out war for postapocalyptic dominance.”

Sounds about right. In fact, it sounds like what’s happening across the Middle East right about now.

In short, American-style capitalism generates the innovation needed for economic growth both here and over there. See, it doesn’t really matter so much if your own country is innovative as long as it is open to adopting innovations created elsewhere and to the “creative destruction” innovation brings with it. But someone, somewhere needs to be innovative.

As Acemoglu, Robinson, and  Verdier point out, the U.S., Finland, and Sweden are all wealthy nations, but the U.S is about 30% richer on an income per capita basis (purchasing power parity, 2005 dollars). The United States is also “widely viewed as a more innovative economy, providing greater incentives to its entrepreneurs and workers alike, who tend to respond to these by working longer hours, taking more risks, and playing the leading role in many of the transformative technologies of the last several decades ranging from software and hardware to pharmaceuticals and biomedical innovations.”

Read more: Why America can’t be more like Scandinavia | AEIdeas

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