
Why is America so rich?  - cwan
http://www.economist.com/blogs/freeexchange/2010/11/growth
======
pg
One way to help answer this question is to imagine what would happen if,
around the same time Larry & Sergey started Google, two identical grad
students were working on the same thing at a university elsewhere in the
world. The second story would have played out a lot differently.

This thought experiment isn't a complete answer, but it's not irrelevant
either.

~~~
adammichaelc
That's really interesting thought.

In the US and specifically Silicon Valley, they got a check for $100,000-ish
to help them in the early years. In most any other country (or even most other
parts of the US), that money wouldn't have been available to 2 unknown people,
regardless of how smart they were.

That's not the only piece of the puzzle, but it's significant.

~~~
hasenj
There are other factors.

For example, Linus went to a university in Finland, it was free so he stayed
there for 8 years or so. If he was in the US at the time, would he have had
the time and freedom to work on a Free kernel full time? He would probably be
in a deep debt like most students.

The point being, there are many other things that other countries have that
America doesn't have.

~~~
gahahaha
It could be argued that he is the exception that proves the rule. He did
something great, but he did not start Linux, the company, and make billions.
Also - Linux would be useless without the GNU project - which is arguably very
American.

~~~
hasenj
GNU is very anti-capitalism.

RMS talks about valuing "community and freedom" over "features". That's pretty
much what the "communism" ideal is all about, right?

Not saying GNU is communist, that's very taboo, but the ideals and motivation
are definitely not "very American".

~~~
SkyMarshal
GNU, and FOSS in general, is neither capitalistic nor communistic. It is
academic.

It works in exactly the same manner that Western academia has for much of its
recent existence, in which discoveries are published, shared, collaborated on,
and built on, albeit at a pace much accelerated by the ability to collaborate
in real-time over the Internet, instead of having to wait for the publication
of monthly journal articles and expensive lab experimentations (like the LHC).

Just because the people involved in FOSS are not doing this directly for money
does not mean they're giving away the fruit of their labor for free, or being
coerced as Soviet Communism was known for. While creating things that directly
improve their own lives (scratching their own itches), they also gain the
opportunity to spend their lives living their passion doing stimulating work,
gain recognition amongst a group of peers spread all around the world, become
known as experts in their field (leading to paying gigs from commercial
outfits), and create things with the potential to advance the human race and
make the world a better place. All of it 100% voluntarily, uncoerced. If
that's not Life, Liberty, and the Pursuit of Happiness, I don't know what is.

Go reread what Ayn Rand says about trading value for value. Whether you're
trading the fruits of your labor and talent for money, or for something else
of value to you, either fits just fine with her philosophy. Ultimately, she
was an advocate for the creation and fair exchange of value and real wealth,
of which money is just a store, and without coercion. There is absolutely
nothing about FOSS that is incompatible with her beliefs.

This is one of the biggest problems with the Conservative movement these days,
a misunderstanding and misapplication of their own ideology. Too many seem to
have merely a superficial understanding of it, a worldview that if
corporations, direct profit motive, and consistent % improvements in quarterly
statements aren't the driving force behind something then it can only be the
antithesis of Truth, Justice, and the American Way. Be it FOSS, Net
Neutrality, movements to reduce corporate spending in politics, if
corporations are against it or orthogonal to it, then it must be anti-
American.

Einstein once advised that 'everything should be made as simple as possible,
but no simpler.' I think the right would do well to reconsider their world
view with that in mind.

~~~
hasenj
GPL is not designed for academic research. MIT and BSD licenses are, but the
GPL is certainly not.

> Just because the people involved in FOSS are not doing this directly for
> money does not mean they're giving away the fruit of their labor for free,
> or being coerced as Soviet Communism was known for

Read my reply to PG. I wasn't trying to imply that GNU has any similarity to
the USSR; that's very silly.

I actually support the ideals of GNU, but I'm not ideological about it. I'm
fine with selling closed software, so long as one is not just leeching off
open source without contributing anything back.

------
mcantelon
They neglect to mention Bretton Woods establishing the US dollar as the
world's reserve currency.

[http://en.wikipedia.org/wiki/United_Nations_Monetary_and_Fin...](http://en.wikipedia.org/wiki/United_Nations_Monetary_and_Financial_Conference)

>the IMF insists that the foreign exchange reserves maintained by other
nations are held in the form of dollars, so no matter how much debt the US
accumulates, its economy will not collapse.

------
joe_the_user
_Why was Britain so wealthy in 1922?_

Well, it wasn't really, it was only formally wealthy and really in decline.

The simple answer today for why America _looks_ wealthy on paper that our
currency is chronically over-valued from our historical position as the last
super power. From this, all the things we produce seem more valuable than they
are. Of course, we aren't actually _selling_ these things to that many people
in other countries. Instead we coast on the credit China is willing to
conveniently advance us to buy their goods. We're "so productive" we no longer
need to produce ... that much.

The world's overall currency and trade relations are amazing unbalanced with
both US and Chinese policy makers apparently willing to feed the illusionary
value of the dollar for as long as it suits their mutual policy interests.

Silicon Valley is a huge source of innovation but it's one of last things of
value to the world that the US has. There are other things on that list but
the list hasn't gotten longer for a while now.

Also, US government spending is on-par with Europe (~33%+ of GDP!) but the US
somehow provide little to no "safety net" to its citizens. The US still a
large manufacturer - it's just that a large portion of it's manufacturing goes
directly to the defense sector.

~~~
aaronblohowiak
Web apps don't register, but actual silicon does:

[http://www.suite101.com/content/top-us-imports--
exports-2009...](http://www.suite101.com/content/top-us-imports--
exports-2009-a204269)

------
hasenj
Because they control the medium of exchange: the American Dollar is the de-
facto standard for all currencies of the world.

I've heard (or maybe read?) a quote to the effect that the US dollar is one of
the top things that America exports.

It's also the reasons Banks are rich, even though they don't practically
produce anything. If they were simply accounting firms managing people's money
and doing nothing other than book-keeping, without the ability to "create"
money out of thin air, they wouldn't have become so rich.

Japan and China on the other hand, became rich solely due to their hard work.

I'm particularity fascinated by how Japan raised from the ashes, _literally_ ,
to become what they are. The quantity and quality of creativity over there is
just amazing.

~~~
fleitz
Both of them were tremendous beneficiaries of the Marshall Aid plan.
<http://en.wikipedia.org/wiki/Marshall_Plan#Aid_to_Asia>

I know that US bashing is popular, but the US has in the past done
tremendously generous things for the world.

~~~
hasenj
From the random things I've read about Japan post WWII, they were basically
forbidden to produce anything by the occupation government.

[http://en.wikipedia.org/wiki/Occupation_of_Japan#Industrial_...](http://en.wikipedia.org/wiki/Occupation_of_Japan#Industrial_disarmament)

------
fleitz
I think the the tenacity and perseverance of the American character results in
a nation that is better equipped to produce wealth than any other nation. It
is founded on entirely different principles than the rest of the world.
Americans are optimists and that leads them to have the courage of conviction
to do things like a Marshall Aid plan. America realizes that it stands on top
of the world and thus the only way to lift itself up is to lift everyone else
up with it.

For many years America was one of the freest places to do business. Because of
that and their geography they were able to leverage massive industrial power
to fuel the Allied war machine while charging a large portion of that back to
their allies. After WW2 they correctly realized that they needed a plan to get
the rest of the world on track, because they were the only ones left with
functioning industry, they gave and sold the world the means of production.
(Marshall Aid plan)

From these acts they became the worlds reserve currency and leveraged that
into massive monetary expansion and reaped the rewards of seigniorage.

The problem is that American has adopted a very anti-business climate (Sarbox,
Dodd-Frank, etc) and is still acting like it represents 60% of world GDP.

It's pretty much Silicon Valley that is still keeping the US in the game.

Also, not to forget is the Americans were smart enough to offer to pay the
Sauds their bribe to be able to protect them. The British scoffed at this
offer and the rest is pretty much history. Basically, the Sauds said 'someone
pay us for the privilege of protecting us'

I'm not American but hold a deep respect for the things the country has done
for the world.

~~~
pyre

      > It's pretty much Silicon Valley that is still
      > keeping the US in the game.
    

While there may be some truth to it, I think that statement is a bit bold.

~~~
fleitz
Bold ideas are what change the world. I don't think that it is the companies
or the particular ideas that are keeping the US in the game, it's the spirit
and the character.

It's having the courage to dream, the passion to execute, and the friends and
colleagues who will offer a hand up after you fail.

No where else have I seen this spirit so embodied and embraced than in SV.

------
bugsy
Nothing to do with OPEC using the dollar as its only accepted currency,
meaning if you want to buy oil you need to get dollars by selling things cheap
to america?

------
netcan
It's actually a hard question to answer. Being a good place for innovation (as
pg suggests) is definitely part of the answer. But if you look at a list of
rich countries (excluding mineral wealth & havens eg Qatar,Norway &
Luxemberg,Andorra), it's hard to put a finger on _a_ cause. If you asked the
residents of those countries why they're rich, you'd probably get few
commonalities.

US: freedom, innovation

Singapore: extreme k-12 education, trade center

Switzerland: dunno

Netherlands: Progressive culture, social justice

Ireland: Intelligently designed & centralized tertiary education system,
bribing key companies to set up shop

France: Liberte, egalite... ( just kidding, sort of)

------
jawee
Does anyone have a mirror? The link isn't working and Coral Cache doesn't have
it.

~~~
ximeng
[http://webcache.googleusercontent.com/search?q=cache:gfz3dS3...](http://webcache.googleusercontent.com/search?q=cache:gfz3dS3UOyAJ:www.economist.com/blogs/freeexchange/2010/11/growth+http://www.economist.com/blogs/freeexchange/2010/11/growth&cd=1&hl=en&ct=clnk)

For those wondering what the Economist site runs on, the error message is:

Pressflow

Site off-line The site is currently not available due to technical problems.
Please try again later. Thank you for your understanding.

If you are the maintainer of this site, please check your database settings in
the settings.php file and ensure that your hosting provider's database server
is running. For more help, see the handbook, or contact your hosting provider.

------
variety
The real questions should be: "...and yet, so blighted, and so plain ugly to
look at in most places? And why, despite all this wealth, are the standards of
living and general education levels so shockingly low?"

------
chailatte
Why WAS America so rich? Most of the competitions were wiped out by WWII.

But now they've all rebuilt and caught up. Now the US is in trillions of debt,
the largest debt holder in the world.

~~~
johngalt
Why was the competition wiped out? Why did the USA win WWII? I think you'll
find a circular reference here.

People act as if American Imperialism is responsible for it's economy, when
it's the opposite. We are by no means great war fighters. We just build more
than anyone else.

~~~
ZeroGravitas
I would imagine being on a different continent helped tremendously. South
America was pretty much untouched too.

