Breedlove liked the idea of moving to a more rural community with less pollution, a shorter commute, and safer schools. Menlo Park, like many urban areas at the time, did not seem to be heading in the right direction. In the end, Breedlove quit his job, sold the Silicon Valley house, packed, and moved the family to Visalia. He was not the only one. Many well-educated professionals at the time were leaving cities and moving to smaller communities because they thought those communities were better places to raise families. But things did not turn out exactly as they expected.

In 1969, both Menlo Park and Visalia had a mix of residents with a wide range of income levels. Visalia was predominantly a farming community with a large population of laborers but also a sizable number of professional, middle-class families. Menlo Park had a largely middle-class population but also a significant number of working-class and low-income households. The two cities were not identical—the typical resident of Menlo Park was somewhat better educated than the typical resident of Visalia and earned a slightly higher salary—but the differences were relatively small. In the late 1960s, the two cities had schools of comparable quality and similar crime rates, although Menlo Park had a slightly higher incidence of violent crime, especially aggravated assault. The natural surroundings in both places were attractive. While Menlo Park was close to the Pacific Ocean beaches, Visalia was near the Sierra Nevada range and Sequoia and Kings Canyon National Parks.

Today the two places could not be more different, but not in the way David Breedlove envisioned. The Silicon Valley region has grown into the most important innovation hub in the world. Jobs abound, and the average salary of its residents is the second highest in America. Its crime rate is low, its school districts are among the best in the state, and the air quality is excellent. Fully half of its residents have a college degree, and many have a PhD, making it the fifth best educated urban area in the nation. Menlo Park keeps attracting small and large high-tech employers, including most recently the new Facebook headquarters.

By contrast, Visalia has the second lowest percentage of college-educated workers in the country, almost no residents with a postgraduate degree, and one of the lowest average salaries in America. It is the only major city in the Central Valley that does not have a four-year college. Its crime rate is high, and its schools, structurally unable to cope with the vast number of non-English-speaking students, are among the worst in California. Visalia also consistently ranks among American cities with the worst pollution, especially in the summer, when the heat, traffic, and fumes from farm machines create the third highest level of ozone in the nation.

Not only are the two communities different, but they are growing more and more different every year. For the past thirty years, Silicon Valley has been a magnet for good jobs and skilled workers from all over the world. The percentage of college graduates has increased by two-thirds, the second largest gain among American metropolitan areas. By contrast, few high-paying jobs have been created in Visalia, and the percentage of local workers with a college degree has barely changed in thirty years—one of the worst performances in the country.

For someone like David Breedlove, a highly educated professional with solid career options, choosing Visalia over Menlo Park was a perfectly reasonable decision in 1969. Today it would be almost unthinkable. Although only 200 miles separate these two cities, they might as well be on two different planets.

The divergence of Menlo Park and Visalia is not an isolated case. It reflects a broader national trend. America’s new economic map shows growing differences, not just between people but between communities. A handful of cities with the “right” industries and a solid base of human capital keep attracting good employers and offering high wages, while those at the other extreme, cities with the “wrong” industries and a limited human capital base, are stuck with dead-end jobs and low average wages. This divide—I will call it the Great Divergence—has its origins in the 1980s, when American cities started to be increasingly defined by their residents’ levels of education. Cities with many college-educated workers started attracting even more, and cities with a less educated workforce started losing ground. While in 1969 Visalia did have a small professional middle class, today its residents, especially those who moved there recently, are overwhelmingly unskilled. Menlo Park had many low-income families in 1969, but today most of its new residents have a college degree or a master’s degree and a middle- to upper-class income. Geographically, American workers are increasingly sorting along educational lines. At the same time that American communities are desegregating racially, they are becoming more segregated in terms of schooling and earnings.

Certainly any country has communities with more or less educated residents. But today the difference among communities in the United States is bigger than it has been in a century. The divergence in educational levels is causing an equally large divergence in labor productivity and therefore salaries. Workers in cities at the top of the list make about two to three times more than identical workers in cities at the bottom, and the gap keeps growing.

Cities with a high percentage of skilled workers offer high wages not just because they have many college-educated residents and these residents earn high wages. This would be interesting but hardly surprising. But something deeper is going on. A worker’s education has an effect not just on his own salary but on the entire community around him. The presence of many college-educated residents changes the local economy in profound ways, affecting both the kinds of jobs available and the productivity of every worker who lives there, including the less skilled. This results in high wages not just for skilled workers but for most workers.

I consider the Great Divergence to be one of the most important developments in the United States over the past thirty years. The growing economic divide between American communities is not an accident but the inevitable result of deep-seated economic forces. More than traditional industries, the knowledge economy has an inherent tendency toward geographical agglomeration. In this context, initial advantages matter, and the future depends heavily on the past. The success of a city fosters more success, as communities that can attract skilled workers and good jobs tend to attract even more. Communities that fail to attract skilled workers lose further ground.

The growing divergence of American communities is important not just in itself but because of what it means for American society. While the divide is first and foremost economic, it is now beginning to affect cultural identity, health, family stability, and even politics. The sorting of highly educated Americans into some communities and less educated American into others tends to magnify and exacerbate all other socioeconomic differences. For example, there are vast differences in life expectancy among inhabitants of American cities, and these differences have been expanding for the past three decades. The divorce rates, crime rates, and political clout of different communities have also been diverging. These trends are reshaping the very fabric of our society.

The United States is not in particularly high spirits these days. Fear of economic decline is widespread, and insecurity about America’s standing in the world and its economic future is growing. Talk of the “death of the American dream” is everywhere, from well-articulated op-ed pieces to crude talk radio shows, from casual barbershop conversations to highbrow academic symposia. In a nation sharply divided along political lines, concern about the economy is shared almost equally by those on the left and on the right.

On the surface it seems we have good reason to be worried. Middle-class salaries are declining. Good jobs are scarce. Take the typical forty-year-old male worker with a high school education: today his hourly wage is 8 percent lower than his father’s was in 1980, adjusted for inflation. This means that for the first time in recent American history, the average worker has not experienced an improvement in standard of living compared to the previous generation. In fact he is worse off by almost every measure. On top of this, income inequality is widening. Uncertainty about the future is now endemic.

But the economic picture is more complex, more interesting, and more surprising than the current debate suggests. America’s labor market is undergoing a momentous shift. While some sectors and occupations are dying, others are growing stronger, and still others, just born, promise to alter the landscape dramatically. Most of all, the geography of jobs is changing in profound and irreversible ways. While these trends are national, even global, in scope, their effects are profoundly different in different cities and regions of the country. For example, the effects of globalization, technological progress, and immigration on American workers are not uniform across the United States. They favor the residents of some cities and hurt the residents of others. As old manufacturing capitals disappear, new innovation hubs are rising and are poised to become the new engines of prosperity. An unprecedented redistribution of jobs, population, and wealth is under way in America, and it’s likely to accelerate in the decades to come.

Some of the changes in the economic map reflect long-run forces that are outside our control. Others can be shaped and managed. But none of them are random, chaotic, or unpredictable. In the end, they all reflect clear and rather basic economic principles. Unfortunately, they tend to be obscured by the flood of data on the fluctuations of the stock market or the latest employment numbers. The focus on short-term events often results in information that is incomplete, irrelevant, or both. What happened today, this week, or even this month is not very illuminating, because the fundamentals of an economy evolve at a much slower pace.

But if we take a step back and look at the big picture, the forces that have been driving these changes reveal themselves very clearly. They are far more fascinating and much more important than the daily movements of the Dow Jones. This book examines the long-term trends that really matter to our lives—the vast changes that have taken place in the American labor market over the past three decades and the economic forces underlying these changes. But it also looks forward, seeking to provide insight into the trends that will shape our economy over the next three decades.

Economists like to distinguish cyclical change, the ups and downs of the economy driven by the endless cycle of recessions and expansions, from secular change, the long-run developments that are driven by deep-seated but slower-moving economic dynamics. Most of the current public debate on the economy—in the media, in Congress, in the White House—focuses on the former. The time horizon in this debate is six months or a year at most: How do we end the recession? What should be in this year’s budget? How will unemployment affect the next election? In this book, the focus is almost entirely on the forces that drive long-run trends. Understanding why these changes are taking place, where they are occurring, and how they are affecting individual Americans is crucial. Our jobs, our communities, and our economic destiny are at stake.

The changes taking place in the United States can be seen around the globe. New economic powerhouses are displacing old ones. What used to be tiny, barely visible dots on the map have turned into thriving megalopolises with thousands of new companies and millions of new jobs. Nowhere are these changes more obvious than in the Chinese city of Shenzhen. If you have not heard of it, you will. It is one of the fastest-growing cities in the world. In just three decades it has gone from being a small fishing village to being a huge metropolis with more than 10 million residents. In the United States, a fast-growing city like Las Vegas or Phoenix may triple or quadruple in size over a thirty-year period. Shenzhen’s population has grown by more than 300 times in the same period. In the process, Shenzhen has become one of the manufacturing capitals of the world.

Shenzhen’s rise is truly remarkable because it parallels almost perfectly the decline of U.S. manufacturing centers. Thirty years ago Shenzhen was an unremarkable small town that no one outside of southern Guangdong Province had even heard of. Its fate—as well as the fate of millions of American manufacturing workers —was sealed in 1979, when the Chinese leadership singled it out to be the first of China’s “Special Economic Zones.” These zones quickly became a magnet for foreign investment. In turn, that flow of investment led to thousands of new factories. These factories are where many American manufacturing jobs have gone.

As Detroit and Cleveland have declined, Shenzhen has grown. Massive production facilities of all kinds carpet the region. Every year the skyline adds new high-rise offices and apartments, and its workforce swells as more and more farmers leave rural areas to look for better-paying jobs in its cavernous factories. The Chinese call it the city with “one high-rise a day and one boulevard every three days.” As you walk along its wide streets, you feel the city’s energy and optimism. Shenzhen has been China’s top exporter for the past two decades and has built one of the world’s busiest ports, a sprawling facility dotted with huge cranes, enormous trucks, and containers of all colors. Twenty-four hours a day, seven days a week, 365 days a year, these containers are loaded onto enormous cargo ships bound for the West Coast of the United States. Twenty-five million of these containers leave the port each year, almost one per second. In less than two weeks that merchandise will be on a truck headed for a Walmart distribution center, an IKEA warehouse, or an Apple store.

Shenzhen is where the iPhone is assembled. If there is a poster child of globalization, it is the iPhone. Apple has given as much attention to designing and optimizing its supply chain as to the design of the phone itself. The process by which the iPhone is produced illustrates how the new global economy is reshaping the location of jobs and presenting new challenges for American workers.

Apple engineers in Cupertino, California, conceived and designed the iPhone. This is the only phase of the production process that takes place entirely in the United States. It involves product design, software development, product management, marketing, and other high-value functions. At this stage, labor costs are not the main consideration. Rather, the important elements are creativity and ingenuity. The iPhone’s electronic parts—sophisticated, but not as innovative as its design—are made mostly in Singapore and Taiwan. Only a few components are made in the United States. The last phase of production is the most labor-intensive: workers assemble the hardware and prepare it for shipping. This part, where the key factor is labor costs, takes place on the outskirts of Shenzhen. The facility is one of the largest in the world, and its sheer size is extraordinary: with 400,000 workers, dormitories, stores, and even cinemas, it is more like a city within a city than a factory. If you buy an iPhone online, it is shipped directly to you from Shenzhen. Incredibly, when it reaches the American consumer, only one American worker has physically touched the final product: the UPS delivery guy.

At a superficial level, the story of the iPhone is troubling. Here you have an iconic American product that has captivated consumers everywhere, but American workers are involved only in the initial innovation phase. The rest of the process, including the making of the sophisticated electronic components, has been moved overseas. It is therefore natural to wonder what might be left to American workers in the decades to come. Is America entering a phase of irreversible decline?

Over the past half century, the United States has shifted from an economy centered on producing physical goods to one centered on innovation and knowledge. Jobs in the innovation sector have been growing disproportionately fast. The key ingredient in these jobs is human capital, which consists of people’s skills and ingenuity. In other words, humans are the essential input—they are coming up with the new ideas. The same two forces that have decimated traditional manufacturing, globalization and technological progress, are now driving the rise of jobs in the innovation sector. The Great Recession has temporarily halted this growth, but the long-term trend points upward.

Globalization and technological progress have turned many physical goods into cheap commodities but have raised the economic return on human capital and innovation. For the first time in history, the factor that is scarce is not physical capital but creativity. Not surprisingly, innovators capture the largest share of the value of new products. The iPhone is made of 634 components. The value created in Shenzhen is very low, because assembly can be done anywhere in the world. Even sophisticated electronic parts, like flash memories and retina displays, create limited value, because of strong global competition. The majority of the iPhone’s value comes from the original idea, its unique engineering, and its beautiful industrial design. Essentially this is why Apple receives $321 for each iPhone—much more than any part supplier involved in physical production. This matters tremendously, not just for Apple’s profit margin and for our sense of national pride, but because it means good jobs.

The innovation sector includes advanced manufacturing (such as designing iPhones or iPads), information technology, life sciences, medical devices, robotics, new materials, and nanotechnology. But innovation is not limited to high technology. Any job that generates new ideas and new products qualifies. There are entertainment innovators, environmental innovators, even financial innovators. What they all have in common is that they create things the world has never seen before. We tend to think of innovations as physical goods, but they can also be services—for example, new ways of reaching consumers or new ways of spending our free time. Today this is where the real money is. A part of the $321 that Apple receives ends up in the pockets of Apple’s stockholders, but some of it goes to Apple’s employees in Cupertino. And because of the company’s great profitability, it has the incentive to keep innovating and to keep hiring workers. Studies show that the more innovative a company is, the better paid its employees are.

You might think that the rise of innovation is pretty exciting if you work for, say, Google or a biotech company but that it doesn’t matter all that much if you’re a teacher or a doctor or a police officer. After all, the majority of Americans will never work for a high-tech startup. Why should they care about the rise of innovation? As it turns out, however, innovation matters not only for the well-educated workers who are directly employed by high-tech firms—the scientists, engineers, and creators of new ideas—but for most American workers.

If you take a walk in one of America’s cities, most of the people you see on the street will be store clerks and hairstylists, lawyers and waiters, not innovators. About a third of Americans work either for the government or in the education and health services sectors, which include teachers, doctors, and nurses. Another quarter are in retail, leisure, and hospitality, which includes people working in stores, restaurants, movie theaters, and hotels. An additional 14 percent are employed in professional and business services, which include employees of law, architecture, and management firms. In total, two-thirds of American jobs are in the local service sector, and that number has been quietly growing for the past fifty years. Most industrialized nations have a similar percentage of local service jobs. The goods and services in this sector are locally produced and locally consumed and therefore do not face global competition. Although jobs in local services constitute the vast majority of jobs, they are the effect, not the cause, of economic growth. One reason is that productivity in local services tends not to change much over time. It takes the same amount of labor to cut your hair, wait on a table, drive a bus, or teach math as it did fifty years ago. By contrast, productivity in the innovation sector increases steadily every year, thanks to technological progress. In the long run, a society cannot experience salary growth without significant productivity growth. Fifty years ago, manufacturing was the driver of this growth, the one sector responsible for raising the wages of American workers, including local service workers. Today the innovation sector is the driver. Thus, what happens to the innovation sector determines the salary of many Americans, whether they work in innovation or not.

A second reason that the rise of innovation matters to all of us has to do with the almost magical economics of job creation. Innovative industries bring “good jobs” and high salaries to the communities where they cluster, and their impact on the local economy is much deeper than their direct effect. Attracting a scientist or a software engineer to a city triggers a multiplier effect, increasing employment and salaries for those who provide local services. In essence, from the point of view of a city, a high-tech job is more than a job. Indeed, my research shows that for each new high-tech job in a city, five additional jobs are ultimately created outside of the high-tech sector in that city, both in skilled occupations (lawyers, teachers, nurses) and in unskilled ones (waiters, hairdressers, carpenters). For each new software designer hired at Twitter in San Francisco, there are five new job openings for baristas, personal trainers, doctors, and taxi drivers in the community. While innovation will never be responsible for the majority of jobs in the United States, it has a disproportionate effect on the economy of American communities. Most sectors have a multiplier effect, but the innovation sector has the largest multiplier of all: about three times larger than that of manufacturing.

Excerpted from The New Geography of Jobs, by Enrico Moretti. Copyright © 2012 by Enrico Moretti. Reprinted by permission of Houghton Mifflin Harcourt Publishing Co. All rights reserved.

But this isn’t a new American tradition. A simple search of other official national and state holidays shows that region by region, we have some pretty appalling holidays on the books. Here are just a few.

Loyalty Day: May 1, the anniversary of the Haymarket Massacre, was originally commemorated as Labor Day or International Workers day. Later the American government tried to counterbalance this with an Americanization day that later, under President Dwight D. Eisenhower, morphed into “Loyalty Day,” — “a special day for the reaffirmation of loyalty to the United States and for the recognition of the heritage of American freedom.” On Loyalty Day, flags are supposed to be flown and celebrations of America held. But not this year, when May Day celebrations came back and took the streets.

Patriot Day: Not to be confused with Patriot’s day, the New England holiday that commemorates the battles of Lexington and Concord (and the Boston Marathon and Fenway home games), Patriot Day is the official designation for the anniversary of September 11th, 2001. As a born and bred New Yorker, I certainly will never let that anniversary go by without remembering–and I don’t object to its being a recognized observance — but it’s another Orwellian name, one that prioritizes duty to country over memory of a loss. To me, 9/11 is not really about honoring national borders, but the opposite.

Robert E. Lee’s birthday and other Confederate commemoration fetes: Several states, including Arkansas, Alabama, Florida, Georgia and Mississippi, don’t let Martin Luther King Jr.’s birthday be celebrated without tacking on this commemoration of the Confederate general who led armies into the field to defend the genocidal institution of slavery. This is the first of a few official holidays in the former states of the confederacy that are a little bit sketchy.

So along with Robert E. Lee’s birthday we have Confederate Memorial day, officially celebrated in nine states at various times, mostly in the spring. In fact, Texas has two holidays:Confederate Memorial Day and Confederate Heroes day. And then there’s Jefferson Davis’ birthday, also officially celebrated in a handful of states.

Not all the residents of these states are even aware of this passel of holidays, as this blogger at “Left in Alabama” wrote:

I have obviously lived under a rock until lately. I had NO idea that Confederate Memorial Day and Jefferson Davis’ birthday were state holidays. I did know that for some reason my kids’ school lists Martin Luther King, Jr. Day as the King/Lee holiday. That doesn’t sit well with me.

This underscores the point. Weird holidays aren’t about culture (I could only find a handful of actual “Loyalty Day” celebrations on the Internet but about law: Southerners of all persuasions should be able to celebrate their region without having to commemorate one of America’s darkest hours.

Speaking of America’s other darkest hours, Berkeley, California, led the way in officially changing Columbus Day to Indigenous People’s Day, now celebrated by various tribal governments. Others, sensing the problem with having a long weekend dedicated to the father of a genocide, have renamed the day “Italian Heritage Day” or stopped celebrating it at all. I say: keep the long weekend, mandate that it be used to honor those whose stolen land we stand on.

The caption is a superficial way to characterize an important development of thought that the president — along with the country — has been making over recent years. It is also entirely wrong. Like the mini-furor a couple of months back about the claim that Richard Nixon was our first gay president, the story simply ignores that the U.S. already had a gay president more than a century ago.

There can be no doubt that James Buchanan was gay, before, during and after his four years in the White House. Moreover, the nation knew it, too — he was not far into the closet.

Today, I know no historian who has studied the matter and thinks Buchanan was heterosexual. Fifteen years ago, historian John Howard, author of “Men Like That,” a pioneering study of queer culture in Mississippi, shared with me the key documents, including Buchanan’s May 13, 1844, letter to a Mrs. Roosevelt. Describing his deteriorating social life after his great love, William Rufus King, senator from Alabama, had moved to Paris to become our ambassador to France, Buchanan wrote:

I am now “solitary and alone,” having no companion in the house with me. I have gone a wooing to several gentlemen, but have not succeeded with any one of them. I feel that it is not good for man to be alone; and should not be astonished to find myself married to some old maid who can nurse me when I am sick, provide good dinners for me when I am well, and not expect from me any very ardent or romantic affection.

Despite such evidence, one reason why Americans find it hard to believe Buchanan could have been gay is that we have a touching belief in progress. Our high school history textbooks’ overall story line is, “We started out great and have been getting better ever since,” more or less automatically. Thus we must be more tolerant now than we were way back in the middle of the 19th century! Buchanan could not have been gay then, else we would not seem more tolerant now.

This ideology of progress amounts to a chronological form of ethnocentrism. Thus chronological ethnocentrism is the belief that we now live in a better society, compared to past societies. Of course, ethnocentrism is the anthropological term for the attitude that our society is better than any other society now existing, and theirs are OK to the degree that they are like ours.

Chronological ethnocentrism plays a helpful role for history textbook authors: it lets them sequester bad things, from racism to the robber barons, in the distant past. Unfortunately for students, it also makes history impossibly dull, because we all “know” everything turned out for the best. It also makes history irrelevant, because it separates what we might learn about, say, racism or the robber barons in the past from issues of the here and now. Unfortunately for us all, just as ethnocentrism makes us less able to learn from other societies, chronological ethnocentrism makes us less able to learn from our past. It makes us stupider.

To think even for a moment about aspects of personal presentation other than sexual orientation forces us to realize that we today are not necessarily more tolerant. Consider facial hair. In 1864, with a beard, Abraham Lincoln won reelection. Could that happen nowadays? Is it mere chance that no candidate with facial hair has won the presidency since William Howard Taft — and he wore only a mustache? Indeed, since Thomas Dewey in 1948 no major party candidate with facial hair has even run for president, and Dewey wore only the smallest of mustaches.

Perhaps the presidency is too small a sample. Let’s add in the Supreme Court. Since 1930, 34 different men have served on the Supreme Court. All save Thurgood Marshall have been clean-shaven. (Lest readers think that Marshall’s tiny mustache might topple this argument, let me point out that during most of the last 82 years, 70 percent of adult black males have had some facial hair, yet the only three African-Americans to have served on the Supreme Court or as president have had almost none.) The chance that a random sample of 33 white males would have had no facial hair is something like (.9)33 or about .03, not very likely.

“Even” today, many institutions, from investment banking firms to Brigham Young University, flatly prohibit beards on white males. Brigham Young falsifies its past to make this rule seem “natural.” Its chief founder, John Maeser, usually wore a full beard and mustache. In front of the building bearing his name stands his bronze statue complete with full beard and mustache. In about 1960, however, perhaps earlier, BYU banned beards. Then in 1986, the university commissioned artist Ron Bell to paint a portrait of Maeser. Working from an old photograph, Bell did; of course, Maeser wound up bearded. So the administration asked him to remove the beard. “They didn’t want today’s students to believe they could follow suit,” in the artist’s words. He complied.

If this example seems too religious, consider the huge secular company Walt Disney Enterprises. The last time I visited Disney World, it still banned facial hair, although it quietly made exceptions for African-Americans with well-trimmed beards or mustaches.

In themselves, beards may not be signs of progress, although mine has subtly improved my thinking. Nevertheless, we reached an arresting state of intolerance when the Disney organization, founded by a man with a mustache, would not allow one even on a janitor. Moreover, before we trivialize these examples by thinking they apply only to facial hair, consider that Lincoln was also our last president who was not a member of a Christian denomination when taking office. Could a non-Christian like Jefferson or Lincoln be president today? It’s not clear.

All that said, President Obama’s change of heart about gay marriage remains significant. It does show increasing tolerance compared to our recent past. During the nadir of race relations, that terrible period between 1890 and about 1940 when white America went more racist in its thinking than at any other time, the U.S. also clamped down on beards, liquor (briefly) and, yes, homosexuals. As Jackie Robinson was not the first black player in Major League Baseball, but rather the first after the nadir, so President Obama is not our “first gay” president (Forgive me: I cannot seem to retype Newsweek’s silly headline without putting quotation marks around the words), but only our “first” since the nadir.

Remembering that James Buchanan was homosexual complexifies our national narrative, to be sure, but it is a complexity that we need. It prompts us to remember that terrible era, the nadir, when we all moved backward, not just the South. Not just organized baseball but also the Kentucky Derby, the NFL and even previously “black” jobs like railroad foremen got redefined “white only.” Communities across the North became sundown towns, barring African-Americans formally or informally. Even North Dakota outlawed interracial marriage.

Forgetting Buchanan’s sexual orientation helps us forget all the other national secrets we have packed into that closet with him. Ultimately, it prompts us to succumb to chronological ethnocentrism. If, however, we can rid ourselves of the fantasy that we are always getting better, then maybe we can create a nation that actually becomes more tolerant. Then we might — again — elect a real gay president. After all, just three months ago, Disney started letting white male employees grow beards.

Since World War II, the United States has been the preeminent actor in world affairs. Its status at the end of that conflict, its role in creating postwar international institutions, its leadership in the reconstruction of Europe and Japan, and its dominant status within the Western alliance during the Cold War are well known and beyond dispute. With the collapse of the Soviet Union in 1991, America emerged as the lone superpower. Yet some two decades later, its position of both absolute and relative power appears to have deteriorated. Many scholars and strategists point to economic, structural, political, and even military vulnerabilities, and contend that the United States is in serious decline. Meanwhile, the rise of important regional actors, especially Brazil, Russia, India, China and South Africa (the BRICSs), as well as others such as Indonesia, Turkey, Iran, and the increasingly prosperous and dynamic countries of East and Southeast Asia, is said to be seriously diminishing U.S. primacy in world affairs.

These depictions are pervasive on the Internet and in the press. A quick Google search for the term “American decline” yields 117 million “hits” in 0.13 seconds. A columnist for The New York Times writes that, “Wherever you choose to look . . . you’ll see a country in sad shape.” A leading German news magazine headlines, “A Superpower in Decline.” And from the realm of pop culture, the comic book action hero Superman renounces his U.S. citizenship. But are such assessments accurate?

Two propositions are widely asserted by those who see the ebbing of American predominance: first, that America itself as a society, an economy, and a political power is in decline; and second, that its international primacy is eroding as a result of the rise of other countries.

On the domestic front, the effects of a severe financial and economic crisis, an unprecedented national debt and deficit, a yawning balance of trade and payments deficits, and an aging and overloaded infrastructure lead a prominent financial journalist to foresee “the beginning of the end not just of an illusory ‘unipolar moment’ for the US, but of western supremacy in general and of Anglo-American power, in particular.” Fareed Zakaria, a widely quoted public intellectual, warns that America has become an “enfeebled” superpower and embellishes his case by observing that the world’s tallest Ferris wheel is now in Singapore and the largest casino is in Macao. For good measure he adds: “America’s success has made it sclerotic.”

Without a doubt, the United States now confronts serious problems at home and abroad. Nonetheless, recent declinist arguments carry an unmistakable echo of the past. Antecedents of these views were apparent in the 1970s, 1980s, and 1990s, and on occasion were even phrased in identical language. Indeed, declinist proclamations have appeared on and off since the late eighteenth century.

For the United States, historical as well as relatively recent comparisons provide evidence for its robustness and adaptability as a society and as a leading power. Time and again, America has faced daunting challenges and made mistakes, yet it has possessed the inventiveness and societal flexibility to adjust and respond successfully. In this regard, neither the rise of the BRICS and other regional powrs, nor competition in a globalized world economy, nor “imperial overstretch,” nor domestic weakness are by themselves bound to have the transformative effects that have been so often suggested. Despite major changes and severe challenges, these domestic and international constraints do not in themselves predetermine the end of America’s international predominance. All the same, just because America has previously overcome adversity and retained both its strength and international primacy does not guarantee that it will do so now.

Debate about America’s world role is nothing new. One notable version of it took place in the late 1980s. Paul Kennedy’s 1987 best seller, “The Rise and Fall of the Great Powers,” became one of the most widely cited books of that era. Kennedy cautioned that the United States ran the risk of “imperial overstretch,” which he defined not just in terms of military commitments, but in regard to the balance between resources and obligations. In a 1990 response, Joseph Nye was less pessimistic, arguing that the issue was not one of resources per se, but of policy and choice – that is, that to the extent the United States faced a problem, it was because it “lacks the will, not the wallet.”

The problem of “wallet” has since become more pressing. Even before the financial crisis that began in 2008, the historian Niall Ferguson cited the shift in America’s balance of payments and the change in its net international investment position – the difference between American-owned assets abroad and foreign-owned American assets – as a sign of deterioration. In doing so, he invoked comparisons with the decline and fall of the Roman Empire nearly two millennia ago. The comparison is tempting, but as with the parallels to the British experience of the past century, its relevance is tenuous at best.

Certainly the domestic situation is more difficult now than two decades ago. Yet while these problems should not be minimized, they should not be overstated either. Contrary to what many observers would assume, the United States has managed to hold its own in globalized economic competition and its strengths remain broad and deep. For the past several decades, its share of global output has been relatively constant at between one-quarter and one-fifth of world output. According to data from the International Monetary Fund (IMF), in 1980, the United States accounted for 26.0 percent of world GDP, and in 2011, 21.5 percent. These figures are based on GDP in national currency. Alternative calculations using purchasing power parities are somewhat less favorable, but still show the United States with 19.1 percent in 2011, as contrasted with 24.6 percent in 1980.

Moreover, America benefits from a growing population and one that is aging more slowly than all its possible competitors except India. And despite a dysfunctional immigration system, it continues to be a magnet for talented and ambitious immigrants. It is a world leader in science and in its system of research universities and higher education, and it has the advantage of continental scale and resources. In short, the United States remains the one country in the world that is both big and rich.

In addition, the American military remains unmatched and, despite intense stress from a decade of war in Afghanistan and Iraq, it has not suffered the disarray that afflicted it in Vietnam. This is evident in terms of indicators such as successful recruitment and performance of the volunteer force, the ongoing quality of the officer corps, and broad public support for the military as well as casualty tolerance. Moreover, in its capabilities, technology, capacity to project power, and command of the global commons, the United States has actually increased its military margin as compared with others, although with the important and challenging exception of China.

Beyond material strengths, the society itself benefits from a durable political system, rule of law, vigorous free press and information media, and a competitive and adaptable economy, as well as strong traditions of entrepreneurship and innovation, leadership and critical mass in new technology, and a history of resilience and flexibility in overcoming adversity.

The declinist proposition that America’s international primacy is collapsing as a result of the rise of other countries should also be regarded with caution. On the one hand, the United States does face a more competitive world, regional challenges, and some attrition of its relative degree of primacy. This process, or diffusion of power, is not exclusive to the post–Cold War era, but began at least four decades ago with the recovery of Europe and Japan from World War II, the rise of the Soviet Union to superpower status, and the emergence of regional powers in Asia, Latin America, the Middle East, and Africa. Still, in contrast to other great powers that have experienced decline, the United States has held a substantially more dominant position. For example, Britain at the start of the twentieth century was already falling behind Germany and the United States, although it did manage to continue for half a century as head of a vast empire and commonwealth.

Because of the enormous margin of power the United States possessed after the end of the Cold War, it should be able to withstand erosion in its relative strength for some time to come without losing its predominant status. While it is true that the weight of important regional powers has increased, many of these are allied or friendly. Those that are not (Iran, North Korea, Syria, and Venezuela) do not by themselves constitute serious balancing against the United States and its allies. Russia occupies an intermediate position, at times acting as a spoiler, but not an outright adversary. China presents a potentially more formidable challenge, notably through its growing economic might and the rapid expansion of its military capacity, but it has not yet become a true peer competitor. In any case, and despite the burden of a decade of war in the Middle East, America continues to possess significant advantages in economic breadth and depth, science, technology, competitiveness, demography, force size, power projection, military technology, and even in learning how to carry out effective counterinsurgency, and thus retains the capacity to meet key objectives.

In sum, although the United States predominates by lesser margins, it still remains a long way from being overtaken by peer competitors. However, given profound disagreements about policy, intense partisan rancor among political elites, growing social-class division, distrust of government, and deep disagreement about foreign commitments, nonmaterial factors could prove to be a greater impediment to staying power than more commonly cited indicators of economic problems and military overstretch. The United States retains the power and capacity to play a leading world role. The ultimate questions about America’s future are likely to be those of policy and will.

Power and Willpower in the American Future: Why the United States Is Not Destined to Decline, by Robert J. Lieber Copyright © 2012 Robert J. Lieber.  Reprinted with the permission of Cambridge University Press.

This week, the Senate debated student loan rates, which are now at a comfortable 3.4 percent and are set to double on July 1, if nothing is done. In his most recent college tour, President Obama focused on the endangered interest rate, fully aware that Republicans would have to support the Democratic initiative, if only to avoid embarrassment. Their sleight of hand was in proposing to come up with the $6 billion by removing money from preventive healthcare programs. That, then, is how the House Republican majority voted a week earlier to pass a one-year extension of the 3.4 percent rate. Democrats had urged cutting subsidies to oil and gas companies instead of raiding health care funds. When that wouldn’t fly, the alternative became an increase in the Social Security payroll taxes of the already wealthy. The White House vowed a veto after the House measure passed. It’s now the Senate’s turn. Congress will have to reach some sort of compromise, because neither party wishes to be seen as anti-student in an election year.

So, what about educational opportunity in America?  Is it, or is it not, a priority?  We all recognize that there is wasteful spending in the budget, but Republicans in Congress routinely recommend slashing funds for education, as though the fiscal crisis can be solved by cutting social programs first. (This past week, claiming that the Democratic plan was counterproductive, Senator Mitch McConnell, R-KY, relied on the fiction that government should not be “raising taxes on the very businesses we’re counting on to hire these young people.” He apparently views college graduates as dependents on government rather than future job creators.) Nothing could be more self-defeating, or hurtful to more people. Literacy programs? National writing projects? High school graduation initiatives?

They can talk all they want about Jeffersonian small government, but Thomas Jefferson stood for opportunity for young people, not a further consolidation of power among big business combinations. For millions of low- and middle-income students with admirable ambitions, a college education is the American dream. President Obama’s revelation that he and the first lady were only able to pay off their student loans eight years ago – they were in their forties – cannot but resonate with younger voters. On the campaign trail, Michelle Obama says that her husband was “the son of a single mother who struggled to put her son through school.” It’s a good narrative when you’re running against a candidate who was pretty much slotted for Harvard at birth.

Jefferson made himself quite clear. His definition of republicanism projected greater civic involvement and an expansion of the electorate, opening minds rather than opening the wallets of the privileged few to preserve their political sinecures. The Jefferson quote about a free press comes from a letter of November 4, 1823, addressed to his old friend Lafayette, the last surviving general to have commanded Continental Army troops in the American Revolution. Jefferson invoked his small government philosophy in the line that directly preceded his call for a free press:  “A rigid economy of the public contributions, and absolute interdiction of all useless expences, will go far towards keeping the government honest and unoppressive.” And then, he assured, “the only security of all is in a free press. The force of public opinion cannot be resisted when permitted freely to be expressed. The agitation it produces must be submitted to. We are, for example, in agitation even in our peaceful country. For in peace as well as war the mind must be kept in motion.”

And how is the mind to be kept in motion? In a letter he addressed to a state legislator seven years before, as he proceeded with his design of the University of Virginia, Jefferson proposed that legislatures vote “a perpetual tax” to maintain a system of schools and a university “where might be taught, in its highest degree, every branch of science useful in our time and country.” Because, as he most eloquently put it, “If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be.” Yes, small-government champion Thomas Jefferson did not wish to tax citizens – except when the money was being used for public education.

Those of our time who would sacrifice opportunity for the young and shortchange students of all ages ought to heed the thought Jefferson expressed next. Taken out of context, or left to stand alone, it is a rallying cry for those who fear federal encroachment: “There is no safe deposit [for liberty] but with the people themselves,” he proclaimed. But the rest of his comment expresses the best Jefferson we know, the education champion. Liberty is never safe, he said, unless people possessed knowledge to make informed political choices; for, “where the press is free, and every man able to read, all is safe.”

Conservatives will certainly not appreciate one theory Jefferson put forward in the letter to Lafayette. He claimed that partisan ideologies were fixed in nature. Those of his day whom he labeled “Tory” or “aristocrat,” who wished to restrain the democratic rabble and keep the wealthy in charge, were, for Jefferson, “sickly, weakly, timid men” whose nerves could not withstand social change. Those who subscribed to his own, relatively liberal and open-minded belief in the educability of all (white) men were, he wrote, a “healthy, strong and bold” political interest.

Jefferson’s first priority was the intellectual elevation of those who were to succeed the founding generation — those who would sustain the values of the Revolution.  He opposed all profligate spending, but he championed education spending.  And he embraced the free press as the republic’s clearinghouse of ideas and the instrument through which political and ethical progress was insured.