Why Are Americans Still So Dynamic?
In 1982, the historian Louis Galambos came out with a moderately provocative book, America at Middle Age. Writing during a deep recession, he argued that rising affluence in the 20th century had led people to prefer regulation and stability over dynamic growth. He built on earlier dynamism skeptics such as Daniel Bell’s Cultural Contradictions of Capitalism (1976).
Galambos’ book attracted little attention, as it had terrible timing – it emerged just as deregulation under the Carter and Reagan administrations unleashed a wave of entrepreneurial activity and dislocation. American companies were breaking up or downsizing, and a wave of upstarts powered by the emerging internet disrupted oligopolies throughout the economy.
Undaunted, another wave of books appeared in the 2010s, responding to slow growth after the 2008-09 Great Recession. Surely now the country was settling down. Tyler Cowen argued that a self-satisfied Complacent Class (2017) was dominating the country, discouraging mobility and invention. Just before the pandemic hit, Ross Douthat called out our Decadent Society for continuing to do the same things rather than change.
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But a funny thing happened on the way to middle age: the dynamism came back. Now the news is all about the Great Resignation and “quiet quitting” – the tendency of employees to do just the minimum to keep their job. Startups are cool again, attracting ambitious and talented young people along with abundant capital. Once impregnable giants such as Facebook are on the defensive. After falling in the 2010s, the rate of small business formation has roared back up.
Dynamism, not always a good thing, has spread beyond the economy into politics. The parties are more polarized than they’ve been in decades. The horrendous assault on the U.S. Capitol is only the worst episode in a series of violent protests. Even secession from the federal union, long unconscionable, is up for discussion. More broadly, violent crime has increased in recent years after falling to record lows.
The commonplace evolutionary view of America makes it hard to understand these developments. By historical standards, we’ve never had it so good: extraordinary affluence, overall security, and far greater tolerance of diversity. At least for educated people with energy, a fairly comfortable corporate life awaits. Studies of entrepreneurs suggest that on average they make less money per hour than if they worked in big companies.
Even current challenges such as climate change seem more manageable than the horrifying (and still possible) threat of nuclear destruction during the Cold War. Inequality has risen but is arguably still better than in some previous eras. Yet with all this success, people are restless and inclined to think the country and the world are getting worse.
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For insight we can draw on Strangers in Their Own Land (2016), an extraordinary book by Arlene Hochschild, a left-leaning sociologist who spent time in southwestern Louisiana. She was puzzled at the popularity of the anti-government Tea Party in an area that cried out for federal regulation of polluters. She talked to numerous (mostly white) residents upset with the petrochemical giants so clearly damaging the environment - but who had no interest in help from Washington.
They saw the federal government as a faraway bureaucracy, captured by socialists looking to redistribute money from workers to people who lacked the discipline to strive. They wanted to solve their own problems. Here was a situation tailor-made for middle-aged, complacent, decadent America, yet people were resisting the obvious solutions. While racism played a part, Hochschild said the issue went beyond bigotry.
Two explanations come to mind. One is simply the return of federalism as the country has grown enormous and diverse. More people are simply less willing to tolerate direction from Washington, leaving Congress in gridlock and limiting federal responsibilities. While federal budgets keep rising, nearly all of the money goes to the military, health insurance, social security, and state-driven pork barrel spending. However, most state legislatures have (so far) not risen to the occasion and taken on responsibilities abdicated by the feds.
The other answer is that we haven’t taken seriously the longstanding American commitment to individual self-reliance. Even when it’s in their interest to get help from government, many people would rather solve their problems on their own. Partly they fear that a government strong enough to solve problems would lead to cronyism and corruption, not to mention contempt for “flyover land.” But partly they just don’t trust any faraway institution.
If so, then the 18th century insistence on local rights – which made Americans the first to rebel against empire and then unite only grudgingly into a federal union -- has somehow continued into the 21st century. Whether in business or politics, a lot of people would rather take matters into their own hands than rely on others.
Historians and social critics readily acknowledge that American settlers and immigrants were self-selected to resist traditional rule and rely on their own efforts for advance. But they’ve assumed those instincts faded over the centuries, and that Americans have been gradually converging with social democratic Europe. Maybe those traditions of entrepreneurial self-reliance are stronger than we think.