My GMU Econ colleague Vincent Geloso is correct: “If you care about social mobility, you need to let markets work.” Here’s his conclusion:
Our results show that economic freedom is a potent determinant of intergenerational income mobility. A person born in the economically freest quartile of metropolitan areas experiences between 5 and 12 percent more intergenerational income mobility. This effect is systematically larger than the effect of income inequality (something that echoes earlier work using international data by Justin Callais and myself). It is also stronger than all but one of the measures of social capital that Raj Chetty and his team used.
It could well be true that the American dream is dying as many pundits claim. Even though I personally doubt it, the remedy remains the same as it was before: Bet on the “economic freedom” horse.
Authoritarians have long sought to undermine capitalism and democracy by exploiting racial strife in the U.S. In the 1930s, black luminaries such as the poet Langston Hughes and the scholar W.E.B. Du Bois, were lured to the Soviet Union, luxuriously feted by Joseph Stalin and sent back home to sing the glories of life under communism.
Paul Robeson, the accomplished black actor and singer, first traveled to Russia in 1934, shortly after Stalin had engineered a famine that killed millions of Ukrainians. During his visit, Robeson gave an interview to the American Communist Party newspaper, the Daily Worker. “I was not prepared for the happiness I see on every face in Moscow,” Robeson said. “I was aware there was no starvation here, but I was not prepared for the bounding life; the feeling of abundance and freedom that I find here, wherever I turn.” In 1952, the Soviet Union awarded Robeson the Stalin Peace Prize.
Rather than trying to squeeze competition and harm consumers, Amazon seems to have taken proactive steps to make sure its customers were getting the Prime-level service they had paid for. This isn’t evidence of a monopoly; it’s a demonstration of how Amazon has become so successful: by putting customers first.
Now investors are looking elsewhere and have pulled $1.6 billion from China-focused mutual and exchange-traded funds in 2023, according to data from Refinitiv Lipper. Total net assets in those funds are at $21.6 billion, down one-third from their peak in 2021, because of outflows and weak performance.
At the same time, American restaurants are common sights abroad. Fast-food staples like McDonald’s, Hardees, Five Guys, and KFC dot streets in Riyadh. Outback Steakhouse, a US-based chain serving “Australian” food, just opened its 150th location in Brazil and has been voted Rio de Janeiro’s most popular restaurant for five years running. And Chili’s—which serves burgers, ribs, and Tex-Mex—has 364 international locations spread across 28 countries and four continents. If you don’t like those choices, don’t worry: thousands of other American restaurants are available abroad too.
Globalization has similarly affected what many consider to be comfort foods. Instant ramen, takeout Chinese, burritos, and pizza are staples for American college students. Halfway around the world, those same college students can follow up a late night in Thailand at any number of places serving “American breakfast” or brunch. Back in the United States (and in Canada), many Asians grew up with a steady supply of Sara Lee frozen pound cake—an “Asian culinary icon” that was so ubiquitous in their households that it appeared on the Netflix comedy Beef, which tracks the lives of several Asian Americans living in Los Angeles. At one time, Sara Lee operated in 40-plus countries and sold ready-made baked goods in more than 180.
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National culture and history—not always good—can often do the same. Vietnam blends indigenous and regional influences with those from France because of the latter’s colonization. Next door Thailand, however, was never colonized by a European power, yet its cuisine blends local flavors with numerous foreign influences, thanks to the expansion of global commerce starting in the 1500s. An essential ingredient in Thai cuisine—the chili pepper—comes from the Americas via Portuguese and Spanish traders. Further south, Australia has gone from a meat‐and‐potatoes country to one with a local cuisine that harnesses the culinary talents of Italian and Greek migrants, as well as closer neighbors from China, Japan, Vietnam, Thailand, and Malaysia. And halfway around the world, Guyanese cuisine includes African, Amerindian, Chinese, Creole, East Indian, European, and Portuguese influences. Many other Caribbean cuisines have similar fusions.
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Today’s produce section has undergone a similar transformation. According to The Packer, supermarkets in 1980 carried an average of 100 different produce items, and by 1993, the number approached 250. Even then, however, certain fruits and vegetables were limited to North American growing seasons, and no one had ever even heard of products like rambutans, lychee, or jackfruit. A casual stroll through the same aisles today, by contrast, contains an incredible variety—thanks in large part to global trade.
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Globalization has even improved our domestic food supply. For example, more than 40 percent of the tinplate steel used for canning goods is sourced globally, meaning that many canned foods, although grown domestically, would be more expensive if US producers lacked access to imported materials. American farmers, meanwhile, often rely on imported fertilizer or use export revenues to fund expansions or crop experimentation. Total US food and agriculture exports hit $196 billion in 2022, almost half of which ($88 billion) went to Asia.
