In his farewell address, Ronald Reagan described America as the “shining city on a hill”, open to “anyone with the will and heart to get here”. I was one of those inspired to try, and today the dynamic mix of academics and entrepreneurs who energise the world’s technology leader still strikes me as a marvel. Of the top 100 US companies, 10 now have chief executives who were born in my home country, India, a breakthrough that could have happened only in a capitalist meritocracy.
Nonetheless, I worry about where the US is leading the world now. Faith in American capitalism, which was built on limited government that leaves room for individual freedom and initiative, has plummeted. Most Americans don’t expect to be “better off in five years” — a record low since the Edelman Trust Barometer first asked this question more than two decades ago. Four in five doubt that life will be better for their children’s generation than it has been for theirs, also a new low. According to the latest Pew polls, support for capitalism has fallen among all Americans, particularly Democrats and the young. In fact, among Democrats under 30, 58 per cent now have a “positive impression” of socialism; only 29 per cent say the same thing of capitalism.
That’s not surprising, given what we’ve all been told. When Joe Biden won in 2020, op-eds in newspapers around the world hailed his presidency as a death knell for “the era of small government”, which they dated to the “neoliberal” rebellion against the welfare state launched by Reagan and Margaret Thatcher. Recent histories of capitalism sketch the same arc, arguing that those two leaders ended three “glorious” postwar decades for social democracy, when ambitious governments worked with corporate and union leaders to generate faster growth and distribute the proceeds more fairly. In short, these thinkers cast Biden’s plans for new spending and regulation as a welcome break from small, penny-pinching government and a plausible fix for popular frustration with capitalism.