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America: Declining or reclining?

  • Published at 06:15 pm June 13th, 2015
America: Declining or reclining?

This piece is prompted by the recent news that this year’s annual American Spelling Bee was won by Vanya Shivashankar and Gorkul Venkstachalam in a tie. After a number of playoff rounds in which both contestants were perfect, the judges decided that both deserved to win. I suspect that the judges wore out before the contestants.

The Spelling Bee has now been won eight straight years by Indian-American contestants. The press has been replete with articles which point out that Indian-Americans practice for the Spelling Bee and run a South Asian Spelling Bee as a warm-up. Well, so what? The run of South Asian victories in the American Spelling Bee gives me something to think about, but South Asian dominance is not one of them. That is nonsense!

It very well may be a symbol of what the future of America will look like as this century progresses, and it may imply that the dreaded prophesies of American decline to a second rate power are somewhat overblown. The news of Vanya’s and Gorkul’s tie victory spurred me to reflect on that subject and do some superficial research. But first, a thumbnail history of the Spelling Bee.

It seems the Spelling Bee is as American as apple pie -- or so the saying goes. Spelling contests in the US grew popular after Noah Webster’s spelling books were published in the late 18th and early 19th centuries; these were used in almost all American elementary schools for at least five generations. The first organised and sponsored National Spelling Bee took place in 1925 in Washington (the winner was not South Asian).

The idea of the Spelling Bee has found its way to many other countries, and appears to me to be among those few US inventions that have survived the many technological and social changes which have totally changed life in the 21st century. According to Wikipedia, there is a Spelling Bee in Pakistan, Bangladesh, and India among many other countries, so readers of this article will be familiar with the concept. I hope revelation of its American origins will not dilute their interest.

What does this news imply for America in the mid-21st century? I don’t want to make too much of this and what follows is a bit of inductive reasoning -- building on small facts to a grand conclusion. Readers will know that such reasoning implies or entails the truth of a grand conclusion, but does not guarantee it.

I start with the contestants themselves, and not just the two winners. In addition to Vanya and Gorkul, five of the other eight finalists were of South Asian origin. Even more interesting, in my view, is that all of the finalists come from the heartland of America, none from Silicon Valley or the great academic centres.

Vanya and her family live in Olanthe, Kansas; Gorkal and his family are from Chesterfield, Missouri. These are not rural areas: Olanthe is in the metropolitan area surrounding Kansas City; Chesterfield is a suburb of St Louis. But this shows the vast geographic dispersion of not only the South Asian immigrants in the US, but in fact that the dispersion of most immigrants around the country is increasing rapidly.

The point is simple. Not only are immigrants an increasing proportion of our population, but they are increasingly among the more skilled and educated segments of our society. This has to make a difference in the ability of our workforce, writ large, to compete with those of the other countries who want to challenge US leadership, in particular the rising Asian power, China, which many forecasters, including many Chinese forecasters, predict will be the predominant economic and political power of the last half of this century. It seems to me that the inclusivity of our society and its ability to assimilate immigrant populations has to be counted as an American advantage.

Immigration statistics help in this inductive analysis. The US Homeland Security Department is not good at publishing up-to-date numbers on immigrants attaining legal resident status, so I have to work from figures for 2012. But they are instructive. If I asked the average American which country and region most of our legal immigrants come from, the answer would likely be Latin America.

But in 2012, slightly more legal immigrants came from Asia, than from the whole of North and South America combined. The largest number of legal immigrants in 2012 came from Mexico, as could be expected. But the second largest number, surprisingly, came from China, and the third largest from India. Both Pakistan and Bangladesh are toward the bottom of the charts, with about 15,000 each.

Now the big controversy here over immigration is about illegal immigrants, of which the overwhelming proportion are from Latin America. I do not share the prejudices of many Americans about illegal immigration, but I think that it is safe to assume that almost all of it is in unskilled workers and/or their families, so illegal immigration does not weaken my argument. In fact, it probably strengthens it, but that is the subject of another article.

Another relevant factor in the discussion of US’ relative economic strength is investment in productive enterprise, and in this case, foreign direct investment which supplements it. In this area, the focus turns to China rather than South Asia. Chinese investment in US industry has risen since 2000 from almost zero to about $16bn in 2014. The total is now around $46.5bn, most of that in the last five years. There are Cassandras abound who warn against allowing Chinese investment arguing that the Chinese will engage in asset stripping and export the jobs in whatever industry they are investing in back to China. A recent study by Rhodium Group, however, found that the employment impact of Chinese investment in the US to be positive. It has created jobs.

On reflection, this makes sense. China built a growth model that, for 30 years, has been based on moving the surplus agricultural labour from the rural areas into the cities to work in the industries based there. As we know, this model has worked well, but it is now out of steam, as China has run out of surplus labour. While US unemployment is now verging on the Federal Reserve Board’s target rate, in reality, there remains under-employment and many who are still not being counted in the labour force. So the US probably has more surplus labour these days than China.

I note that China has again liberalised its outward investment rules, its target being to free up its currency to the point that the IMF would declare it a reserve currency. There will be Cassandras who decry this as another move to accelerate American decline. But wouldn’t it be nice if Chinese investment were freed up to the point that the Chinese would invest in rebuilding crumbling US infrastructure? At present, Americans seem unwilling to invest in their own future.

And this is where Vanya and Gorkal and all the rest of our immigrant population come back in. If the American present seems to imply decline, the American future will be what they make of it. “The fault, dear Brutus, is not in our stars, but in ourselves….” And what will that future be if the “ourselves” are named Shrivashankar, Venkatachalam, Dev Jaiswal, Siddarth Krishakumar, Tejas Muthusamy, Sinyona Mishra, and Snehaa Ganesh Kumar?