To Europe, the US Looks like Rome at the Height of its Power

 

twenty20_363e72cb-68da-4f04-8064-11a795d5e8b8_rome-e1477667496811If you listen to America’s pessimistic populists, America is so over. We are all in the position of Emperor Honorius watching the Visigoths come over the seventh hill as the sack of Rome begins. (Guess who the Visigoths are in this analogy. Some, I assume, were good people.)

Or to update things a bit, this is the “Flight 93” election, at least according to a recent viral essay. This argument, as I recently described it, posits America’s doom “unless those who value an isolationist, protectionist, and perhaps paler America ‘charge the cockpit’ in Washington and seize control from the open borders–loving, free trading, perpetually warfighting ‘Davoisie oligarchy.’”

That’s not how I see things. My views are more in sync with this notion put forward recently in by Jonathan Margolis in the Financial Times:

So for all its failings and warnings that the US is “over”, in reality, it is not just the new Roman empire, but a reincarnation of the Roman empire at the height of its power, perhaps around 117AD — 170 years before it began to fall apart.

What are the reasons for such optimism? A big one is America’s unparalleled ability to innovate at the technological frontier and create high-impact, fast-growing new companies. In a recent column, Margolis chats with a European tech executive about the region’s tech woes:

Europe has unicorns, such as Sweden’s Spotify, the UK’s Asos, and Germany’s Zalando and Rocket Internet. But they have not become, he says, indispensable internet platforms. They do what they do brilliantly, but none is a Google or an Amazon.

As Mr Robinson explained, in the US, the value of the three biggest listed internet companies, businesses whose creations have become platforms in their own right, is $1.3tn. In Asia, it’s $583bn, In Africa (yes, Africa) it’s $76bn. In Europe, however, our top internet companies, including Russia’s Yandex, are worth $20bn.

This means we lack the ability to compete properly in the consumer economy, he went on to say. It is like being in the industrial producer economy of the mid-20th century, he argued, without having any car companies. “We really need to fix this,” he said. “People get excited about unicorns. The problem with unicorns, however, is that the internet giants’ technology creates the unicorns. And then the giants buy them up. They eat them.”

He and a collaborator, David Galbraith, a partner in the New York investment group Anthemis, call these unicorn-munching giants “lions”, the internet businesses at the top of the food chain — the likes of Google, Facebook and Microsoft. Even the world’s unicorns, Mr Robinson added, are skewed towards the US. According to CB Insights data, there are 176 unicorns globally, of which 101 are in the US, 52 in Asia and 19 in Europe. “We need more unicorns,” he concluded, “but most of all, we need more European lions.” …

Mr Robinson was encapsulating and enumerating a situation we all know and live with daily, but often do not quite admit to — and that has long fascinated me. It is that the internet is an almost wholly US environment, and that most of the money in it flows back to the US. … such is the momentum behind the US ownership of technology that, like the Roman empire, it could be a couple of hundred years yet before it all goes wrong.

What’s Europe’s problem? Three possible reasons: a) easier to raise venture capital in the US; b) America is not only a big market but a homogenous one;  c) the US got a huge headstart from the US military “investing heavily in IT early and starting up the ecosystem.”

Yet despite all of the above optimism, public policy should seek to further strengthen this American competitive advantage and make the economy even more dynamic. “Better than Europe” shouldn’t be the standard.

There are 21 comments.

Become a member to join the conversation. Or sign in if you're already a member.
  1. DocJay Inactive
    DocJay
    @DocJay

    I guess no one is repossessing your truck this month.

    • #1
  2. Paul Dougherty Member
    Paul Dougherty
    @PaulDougherty

    This country may be in decline, but it is probably more the post Julius, death of the Republic phase. Pack your things now, a mere 450 years until the coup de grace. Maybe another 200 years after that will be the fall of Obaminople (formerly Honolulu) as seat of the Western American empire.

    • #2
  3. James Gawron Thatcher
    James Gawron
    @JamesGawron

    James Pethokoukis: America’s doom “unless those who value an isolationist, protectionist, and perhaps paler America ‘charge the cockpit’ in Washington and seize control from the open borders–loving, free trading, perpetually warfighting ‘Davoisie oligarchy.’”

    JamesP,

    Sorry but I’m not buying. First, Trump’s word salads about isolationist protectionism are not likely to be implemented in anything like a destructive way. Second, it is much more than open borders loving / free trading. The insane environmental / tax policies that the left is addicted to (means that they will be implemented in the destructive way we have already seen and get worse) have been sucking the standard of living out from under the average person for decades. The average American can’t get a good job because corporate tax rates have driven them overseas. When he has a good job his dollar is wasted on buying goods inflated by hysterical environmental-energy lunacy. His education costs more and more and is less and less fundamental. Other than trading on the brand name of his school he is being short changed massively. His health insurance has been destroyed by the leftwing insane ACA and it will get much worse.

    JimP if you are sitting at the top of society then you can adjust yourself and weather the storm of 4 or 8 more years of the Hillocrats. If you are in the middle or below it is an absolute disaster!!!

    LET’S ROLL!

    Regards,

    Jim

    • #3
  4. Matt Bartle Member
    Matt Bartle
    @MattBartle

    Yeah, but how do we look to China, Russian, and Iran?

    • #4
  5. Curt North Inactive
    Curt North
    @CurtNorth

    This was good, thank you James.  We have to remind ourselves now and then, no matter how much we gaze inward at sigh in disgust or shudder in fear, there’s a whole big world out there, and it’s pretty much all far worse off than we are.

    • #5
  6. Miffed White Male Member
    Miffed White Male
    @MiffedWhiteMale

    James Pethokoukis: Or to update things a bit, this is the “Flight 93” election, at least according to a recent viral essay. This argument, as I recently described it, posits America’s doom “unless those who value an isolationist, protectionist, and perhaps paler America ‘charge the cockpit’ in Washington and seize control from the open borders–loving, free trading, perpetually warfighting ‘Davoisie oligarchy.’”

    Just out of curiosity, what would be wrong with a “perhaps paler America”?

     

    • #6
  7. aggieben Member
    aggieben
    @

    I appreciate the resistance to irrational panic, but I think it’s important to caveat this by admitting that it is a very narrow economic view.  America faces a number of troubles, and probably the most serious among them are not primarily economic.

    • #7
  8. Aaron Miller Member
    Aaron Miller
    @AaronMiller

    Incidentally, I’ve been reading Montesquieu’s treatise on the decline of Rome since Rahe recommended it. Among other causes, Montesquieu cites the obliteration of Romans’ cultural homogeneity by making citizenship attractive for privileges and powers (complete with competing factions of professional victims) rather than for honor and opportunity. It became a chaotic jumble of complaints and favors, deaf to rural traditionalists and so philosophically (culturally) inconsistent “that it was not possible to determine whether the people had made a law or not.”

    Many Americans retain the cultural premises and impulses which drive innovation and prosperity. But the nation as a whole is coasting on momentum as laws claw at its parts and chaotic ideas dissemble its cultural engine. Like failing Rome, we will remain exceptional long enough to be needed and hated by all the world.

    • #8
  9. Phil Turmel Coolidge
    Phil Turmel
    @PhilTurmel

    Yes, we hold the cards in the infotech world.  For the moment.  The progressive movement thinks we don’t deserve them, and like Obama’s transfer of internet root control to ICANN, wants us to surrender the cards for the greater good.

    No thank you.  I voted for Trump on Monday because I believe in America, am optimistic about America, and want the best for America.  I further believe that American success is good for the rest of the world.  Hilary is such a disaster for all that I believe that Trump’s flaws are minor, short-term annoyances.  Isolationism and protectionism are not the issues that make this a Flight 93 election, at least for me.

    I believe that Rome’s political environment changed in ways that led to its downfall a couple centuries before the Visigoths sacked it.  Particularly the growth of dependency on government handouts and the loss of civic virtue that followed.  I want to forestall the matching changes to our society, as I suspect modern travel and communications shorten the time frame from centuries to decades, and I think we are dangerously far down the slope.

    • #9
  10. Probable Cause Inactive
    Probable Cause
    @ProbableCause

    James Pethokoukis: This argument, as I recently described it, posits America’s doom “unless those who value an isolationist, protectionist, and perhaps paler America ‘charge the cockpit’ in Washington and seize control from the open borders–loving, free trading, perpetually warfighting ‘Davoisie oligarchy.’”

    “Perhaps paler?”  Why does the conveniently non-falsifiable charge of racism always have to be thrown in?  The problem isn’t skin color.  The problem is culture.  The BLM/gangsta wing of black culture is poison.  So is the jihad/sharia wing of Islam.  Kevin Williamson has written about poor white Appalachian culture, which sounds like poison as well.

    By comparison, illegal Mexicans bring a culture that is at least a mixed bag.  But lawlessness is it’s own poison.  And the current compromise that says we’ll have reasonable immigration laws, but we just won’t enforce them, breeds lawlessness.

    Going further, where is the outrage against immigrants from China or India?  I’m sure it’s out there somewhere.  But it’s fairly muted, because they generally don’t bring a poisonous culture with them.

    • #10
  11. ctlaw Coolidge
    ctlaw
    @ctlaw

    @jamespethokoukis

    You quoted:

    This means we lack the ability to compete properly in the consumer economy, he went on to say. It is like being in the industrial producer economy of the mid-20th century, he argued, without having any car companies. “We really need to fix this,” he said. “People get excited about unicorns. The problem with unicorns, however, is that the internet giants’ technology creates the unicorns. And then the giants buy them up. They eat them.”

    If an American had said something like this, you would have denounced him as a protectionist, etc.

    The internet giants, at least operate in a relatively free economy.

    Replace the internet giants with the Chinese government. And the simple buying up with the driving out of business the Chinese try against foreign competitors.

     

    • #11
  12. Quake Voter Inactive
    Quake Voter
    @QuakeVoter

    The Roman metaphors are a fun parlor game.  I’d say we are Rome if Catiline had succeeded but Obama reminds me more of The Mule than any Roman figure.

    America is not in a Flight 93 crisis.  American traditions of limited constitutional government, state and local control over schools and law enforcement, and broad religious and moral freedoms are on Flight 93.

    America will survive and perhaps thrive by the measure of aggregate GDP with open borders, 50% effective marginal tax rates, wealth taxes, a French national school system et al.

    Hey, there was obvious technological creativity in Blade Runner.  GDP was probably growing 5% per year.  Factories were producing young Sean Young’s and Darryl Hannah’s and any-age Joanna Cassidy’s.

    It’s the Constitution that’s on Flight 93.

    • #12
  13. James Gawron Thatcher
    James Gawron
    @JamesGawron

    Quake Voter:Hey, there was obvious technological creativity in Blade Runner. GDP was probably growing 5% per year. Factories were producing young Sean Young’s and Darryl Hannah’s and any-age Joanna Cassidy’s.

    It’s the Constitution that’s on Flight 93.

    Quake,

    Hey, I never thought of it. We will have a massive productivity expansion in the perversity sector. What a plus.

    In Decadence We Trust.

    Regards,

    Jim

    • #13
  14. lowtech redneck Coolidge
    lowtech redneck
    @lowtech redneck

    Quake Voter:America is not in a Flight 93 crisis. American traditions of limited constitutional government, state and local control over schools and law enforcement, and broad religious and moral freedoms are on Flight 93.

     

    Thank you.

    • #14
  15. Hang On Member
    Hang On
    @HangOn

    Who in his right mind thinks the technology challenge is going to come from Europe? You’d have to be daft (which pretty well sums up Pethokoukis’ views). Visit any lab at any high-tech university. It isn’t Europeans who are in there.

    • #15
  16. Petty Boozswha Inactive
    Petty Boozswha
    @PettyBoozswha

    Shorter Pethokoukis: Let Them Eat Cake!

    • #16
  17. Eric Hines Inactive
    Eric Hines
    @EricHines

    To the barbarians across the river in the forests, we look ripe for the picking–both in east and in the west.

    James Pethokoukis: Guess who the Visigoths are in this analogy. Some, I assume, were good people.

    I don’t know of any good people in the Russian or PRC government.  At any level.  Perhaps you’d care to name a couple, Mr Pethokoukis.

    Eric Hines

    • #17
  18. Arizona Patriot Member
    Arizona Patriot
    @ArizonaPatriot

    Quake Voter:The Roman metaphors are a fun parlor game. I’d say we are Rome if Catiline had succeeded but Obama reminds me more of The Mule than any Roman figure.

    This statement could get you in trouble with folks who don’t know their Asimov.  Like using “niggardly.”

    • #18
  19. I Walton Member
    I Walton
    @IWalton

    Rome is instructive as are pretty much all other major civilizations.  We get to know most of the others from their final phase when they start building monuments to their leaders, which are still around, and writing  but I suspect along with  with Hayek, that these phases begin after they have become wealthy by their peoples growing, making and trading things in an organic market process.  Their wealth became attractive to invaders so they had to create powerful central governments to defend them.  The later starts to extract rents eventually capturing all the wealth and enslaving in one way or another the population.  Rome was more like us because it was a Republic, got wealthy, conquered their known world, extracted wealth and slaves which replaced Roman workers and inflated their economy.  They too extracted rents and milked the system, lost their martial qualities, discipline and their ability to protect their trading routes.   In addition to the rent extracting centralization process that destroys markets and eventually the freedom that gives rise to flourishing,  we’ve new economic phenomena we have to come to grips with, i.e. falling marginal costs that lead to nearly infinite economies of scale.   The centralizers want to control these sectors which remain vigorous  in part because the regulators haven’t gotten their warping distorting hands on them yet.  Obama and presumably Hillary want to control them.  That’ll be the end.

    • #19
  20. JLocked Inactive
    JLocked
    @CrazyHorse

    Oh James, the balls on you sir. I think the only unfortunate commonality with decline era Rome is the Citizenry delight in the vanquish of foreign enemies but refuse to join in or sacrifice for their Military.

    • #20
  21. valis Inactive
    valis
    @valis

    I think we are more dying Byzantine empire.

    Like modern Greece, how are we going to pay all the debt?  If interests ever go up, how much of the budget goes to debt service?  The math is going to cause huge social problems a divided society may not handle.  Plenty of real reasons to be pessimistic.

    • #21

Comments are closed because this post is more than six months old. Please write a new post if you would like to continue this conversation.