The Paradox of American Economic Growth

Abstract

ROM the beginning of their national life Americans have shared a belief in the uniqueness and superiority of their society compared to that of Western Europe, or for that matter, anywhere else. From Jared Sparks and George Bancroft to Frederick Jackson Turner, Charles Beard, and Allan Nevins, American historians have seen their task as explaining the basis for American success in the activities to which they particularly turned their attention.' Earlier writers attributed this success to Calvinistic morality, democracy, and vigor, and later historians and social scientists added the benefits of migration and cooperation forced by new settlement. For America after the 1830s, historians have emphasized also great resources, technological ingenuity, and hence an extraordinary rate of economic growth. The older generation of business and economic historians almost unconsciously took off from the premise that America was uniquely suited to rational business and market-oriented decisions and that such decisions produced a rate of economic growth that other nations exceeded only occasionally and under special conditions. Underlying this approach was also the assumption that increasing gross national product (GNP) per capita was a positive good that increased the sum of human happiness. In 1940, Australian economist Colin Clark questioned the traditional dogma of extraordinary American growth in the twentieth century, but the few American economists who read him carefully discounted his conclusions because his terminal year reflected the continuing depression that was troubling the United States more than most other industrial nations. It was not until the 1960s, when Simon Kuznets, Robert E. Gallman, Edward F. Denison, and others began to publish the results of many years of care-