Colonial America was great before 1776, the Declaration of Independence and the Constitution.
You hear some argue that America is the greatest country on earth because of her government, the constitution, and the wonderful checks and balances therein. The argument is made that the American government should not change because it has made America great. This argument is myopic for several reasons. America can be greater. America’s government can be much better (and smaller) and the constitution can be greatly improved.
The book A History of Small Business in America states that:
“By the time of the American Revolution, the colonists (except for black slaves) possessed a standard of living higher in many respects that that of most Europeans.
Of course the population of the American at that time was pretty small. From The Penguin History of the USA:
“Its [Boston’s] population had risen from 7000 in 1690 to 17,000 in 1740 and throughout the years in between it had been the largest city in the colonies.”
Pre-federal America had a great standard of living and an even greater potential. America’s greatness continued to increase during the antebellum years [pre-Civil War]. During this era, America had a small federal government that usually collected NO federal income taxes. The only significant revenue came from import duties collected at the Custom houses of the port cities. From Wikipedia:
The first Federal income tax was imposed during the Civil War, then again in the 1890s, and again after the Sixteenth Amendment was ratified in 1913. From A History of Small Business in America: “[…] in the early and mid-1800s most Americans continued to share in a rapidly rising standard of living. Despite economic downturns in 1837, 1857, and 1873, America’s real per capita gross national product (GNP) rose by one-third in the twenty years after 1839 and continued to rise in later years.”
America was great and growing before the federal government existed and great and growing before the 16th amendment (federal income taxes). The early era of small businesses was followed by an increase of big businesses and industrialization. During this period (1869 to 1921) the per capita GNP tripled and the total GNP increased by a factor of eight. During this period, the federal taxes continued to be small. The tariffs were around 40 percent.
From A History of Small Business in America:
“Between 1945 and 1960, the nations’ real GNP rose by 52 percent , with per capita GNP increasing 19 percent; in the 1960s, real GNP climbed an additional 46 percent and per capita GNP rose by 29 percent.”
America was still expanding. Note, however, that the War had just demolished the competition in Europe, Germany, Russia and Japan. Tariffs were still high. Debt was still low. Big business expanded during this era and small businesses were in the decline. People of this post war era wanted to work in large organizations. Perhaps the men that had served in our Armed forces developed the goal to rise up in the ranks of organization. Furthermore, strong Unions and tariffs protected the wage of the American worker and they achieved a successful middle class lifestyle.
Is America great because of government? From bea.gov data, the GDP expanded by 33 percent in the decade of the 70s, 29 percent in the decade of the 80s, 30 percent in the decade of the 90s and 23 percent in the decade of the 2000s. You might get the impression that the government has presided over this “greatness”. However, these figures are no better than the years before large government or, in fact, any federal government. Looking at the inequalities in income, trade deficits, deficit spending and other statistics for a true measure on whether or not the American government has contributed to the American greatness or not.
From: http://www.jchs.harvard.edu/publications/markets/w07-1.pdf
[…] the bottom 28 million of American households in 2004 had nothing once their debt is netted out, and another 28 million households had only $47,153 on average in net wealth. The top 28 million households had $1,556,801 of net wealth on average, or 33 times that of the lower middle quartile in the wealth distribution. In contrast to the wealth distribution, the annual household income distribution in 2004 was much less uneven, with the top quartile having a share of 65 percent of total aggregate income, while the bottom quartile had at least a 4 percent share. The bottom 28 million households had an average household income of $12,688, but the lower middle 28 million households fared better, with $31,803 on average. The top 28 million households, on the other hand, had $177,265 on average, or more than 5 times that of the lower middle quartile. Nevertheless, both wealth and income distributions were less balanced by 2004 than in 1995, as indicated by the ratios of averages of top to lower middle quartiles.
Is America great because of government? The GDP did no better during the years of large federal government than during the years of small or non-existant federal government. Look at the inequalities in income, trade deficits, deficit spending and other statistics for a true measure on whether or not the American government has contributed to the American greatness. Perhaps America was destined for greatness despite government. There is no conclusive evidence that the American government made America great.