Yves here. America not that long ago really was exceptional, often in positive ways. Satyajit Das describes that the reasons for that short-lived greatness are sometimes not well understood or even misrepresented.
By Satyajit Das, a former banker and author of numerous technical works on derivatives and several general titles: Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives (2006 and 2010), Extreme Money: The Masters of the Universe and the Cult of Risk (2011) and A Banquet of Consequences (2016 and 2021). His latest book, The Everything Bubble: A Guide to the New Age of Financial Speculation and Phantom Wealth,> will be released in 2027. He has also written on ecotourism – In Search of the Pangolin (2006) (with Jade Novakovic) and Wild Quests: Journeys into Ecotourism and the Future for Animals (2024). This is a version of an extended version of a piece published in the print edition of the New Indian Express
As the United States of America celebrates the 250th anniversary of its independence, it is useful to reflect on the nation’s ascent.
History and geography foremost. A virgin territory for European colonisers provided a fresh start escaping the encumbrances, distinctions, hatreds and internecine wars of the Old World. It is a continent protected by two, as President Donald Trump puts it, “beautiful” oceans. Other than the American Revolution, the War of 1812, the Civil War, and the Mexican-American War, it has largely avoided major warfare on the mainland.
It is the third largest continent and is blessed with fertile soils, plentiful freshwater, forests, and mineral deposits, including iron ore, coal and oil, all obtained cheaply by forcibly dispossessing and exterminating first nation owners. It benefitted from immigration. The drive and ambitions of generations of arrivals with little were central to development. In the twentieth century, it attracted talent from other countries across disciplines, some fleeing persecution or instability or attracted by opportunities. Foreigners were central to US industry and science, including nuclear weapons. Today, more than half Silicon Valley’s technology workers are foreign-born and trained overseas at the cost of their native countries.
Agriculture, hospitality, and construction has consistently benefitted from cheap immigrant labour, particularly for physically demanding, repetitive or menial jobs. Abundant resources facilitated a strong agricultural and industrial base, which underpinned its military power.
America’s free enterprise ethos is overstated. Public investment on infrastructure, education and research, such as funding from Department of Defence’s Advanced Research Projects Agency, are important. The Internet and Google’s search engine were partially supported by government funds. American industry benefitted from tariff protection.
Low wages are central. Many G20 countries have significantly higher minimum wages than the US level of $7.25 per hour although it is higher in some states. America’s Gini Coefficient (a measure of inequality) is higher than many comparable economies and has increased over time. America’s ‘get-rich’ and ‘everybody-can-be-a-winner’ culture is central to acceptance of these discrepancies. American tolerance for failure is significant. F. Scott Fitzgerald was wrong believing “there are no second acts in American lives”. For most entrepreneurs bankruptcy is a rite of passage.
The US dollar’s status as a reserve currency in the post-war monetary order allowed American businesses’ to minimise currency risk, the government to borrow heavily to finance large budget and current account deficits as well as enhancing the role of US financial markets. Strong protection of rights and good governance, historically, gave confidence to domestic and foreign actors.
These advantages have diminished over time. America faces resource constraints. Agricultural output is affected by declining soil quality, the use of fertilisers and pesticides, and climate change effects on rainfall, wildfires and temperature. Monocultural farming practices have increased exposure to disease. Forests have been overharvested.
Many raw material reserves are now reaching the end of their economic lives. The country’s fossil fuel proven reserves are around 17 years for oil, 18 years for natural gas and more than a century for coal, although some estimates place them substantially higher. It depends on the accuracy of estimates of known reserves, rate of consumption, new discoveries, and extraction technology,
Deindustrialisation and outsourcing of production have reduced America’s industrial base. Business largely provides services or focuses on branding, marketing, advertising and selling other’s products rather than on manufacture. Tesla views itself as a technology firm, recycling a product first considered by Thomas Edison and Henry Ford. It has fallen behind Chinese firm’s like BYD. Industrial giants, like GE and Boeing, are in decline. Important innovation hubs like Bell Labs and PARC are less influential.
This has been accompanied by loss of skilled workers. Despite being skewed by the results from expensive private schools, US students ranked 28th and 12th out of 37 OECD member countries in mathematics and science respectively, below major industrial peers. Favoured careers for American children include celebrity influencers, online content creators or professional athletes. The decline of interest in STEM careers has meant growing reliance on foreign expertise in key areas.
America’s military, reliant on expensive high-tech weaponry, has repeatedly failed against patient opponents skilled in cheap asymmetric warfare willing to endure long campaigns of attrition and losses. Societal dysfunction is evidenced by deaths of despair, the rise in mortality rates from suicide, drug overdoses, and alcohol-related deaths linked to social and economic factors.
President Donald Trump wants to ‘Make America Great Again’. While offering a catchy sound bite and kitsch merchandising opportunity, MAGA misunderstands the country’s history. Restoring American greatness requires addressing the underlying trends. Instead, the Trump Administration is accelerating and entrenching them. It is fomenting societal divisions for short-term political gain. Homeland and border security is now a vehicle for xenophobia, racism, vilification and legal mistreatment of foreigners, some of whom are legal residents. This immigration phobia is counterproductive given American dependence on foreign skills and cheap labour. The US is now a less favoured destination for global talent with scientists, engineers and researchers seeking opportunities elsewhere.
The over-hyped free-enterprise system has given way to control by wealthy insiders buying influence by their campaign contributions. The dollar’s supremacy is under threat from seizure of foreign assets, tariffs, secondary sanctions, expulsion from the dollar payment system and the risk of a constructive default by a forced exchange of US government bonds for less valuable securities.
The rule of law is threatened by arbitrary rule using erratic Presidential fiat, disregard for court orders and weaponising an increasingly partisan Department of Justice and judiciary to attack adversaries. Unilateral claims on assets, like Ukraine’s minerals and energy plants, Tik-Tok, the Panama Canal and Greenland, which can then presumably be redistributed to the Administration’s favoured lickspittles, undermine protection for property rights and will discourage foreign investors.
American society is now unstable. Some divisions, like those along racial lines, income and wealth, are familiar. A new element is resentment of an intellectual elite and beneficiaries of globalisation captured by the controversial Pat Buchanan in the Pittsburgh Post-Gazette on 3 January 1994: “… it is blue-collar Americans whose jobs are lost when trade barriers fall, working-class kids who bleed and die in Mogadishu… the best and brightest tend to escape the worst consequences of the policies they promote… This may explain … why… the best and wealthiest Americans are the staunchest internationalists…” Consensus is nearly impossible. The chance of some form of civil war is now non-trivial.
Rather than greatness, the US is transitioning to a failed First-World kleptocracy with high tariffs, unsustainable debt, budget deficits, oligarchy, corruption and societal dysfunction. For those seeking parallels, the reigns of Idi Amin in Uganda and Mobutu Sese Soku in Zaire offer helpful guides.
© 2026 Satyajit Das All Rights Reserved
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