Photo: Reuters / Brian Snyder
Because of rising costs, fewer American students are earning degrees in STEM fields. Photo: Reuters / Brian Snyder

In recent times, Americans have increasingly despaired about the continuity of their country’s supremacy in the world.

US pre-eminence was established after World War II. It was uncontested after the end of the Cold War. The US considered itself to be the sole superpower, but China has posed a severe challenge economically, strategically and militarily and in science, technology, knowledge and talent.

Many strategic analysts think that today’s China is more than a combination of Japan’s 1980s technological power and the strategic arms of Soviet Russia. Therefore China poses a comprehensive economic, military, and ideological challenge to US global hegemony.

US Secretary of State Mike Pompeo has been calling China a serious threat to the US economy and American way of life.

Besides, many analysts think that the Covid-19 pandemic ended US supremacy in the world. British journalist Patrick Cockburn writes, “The US is losing its world superpower status due to its failure to lead on the Covid-19 crisis – and this time, it might not recover.

“As exemplified by the coronavirus pandemic, the end of US hegemony is less to do with economics and military strength and everything to do with Trump’s inability to cope with a real global crisis.”

Many people may blame President Donald Trump’s inept leadership for the diminishing US hegemony. This type of blame cannot be discarded totally.

However, in my opinion, foreign countries such as China and Russia are not responsible for the decline of American supremacy, nor is the failure of Trump’s leadership.

The decline of America’s hegemony is caused by a particular deficiency syndrome, or which Trump is just a symptom. Deficiency syndrome is a chronic ailment.

It is helpful to compare American society with India’s system of castes or social strata, and a lecture by Bhimrao Ramji Ambedkar is worth remembering. Ambedkar, who got his PhD in economics in the US, became the law and justice minister in the government of India after independence from Britain in 1947.

The topic of the lecture was Castes in India. Ambedkar was born in the lowest caste, the so-called Dalit or untouchable.

Once born into a particular stratum, one’s social status is fixed. No matter how rich or highly educated a Dalit becomes, his class does not change.

The young Ambedkar was highly influenced by the vertical social mobility he found in America, where anyone could jump from a lower social class to an upper class, and vice versa.

Vertical social mobility is the crucial factor that makes a person hard-working and industrious, putting extra effort into achieving a particular role and status in society. This incentive system maintains the set of cultural goals and the institutional means to achieve these goals, as depicted by American sociologist Robert K Merton. It helps to bring harmony and sustain society’s stability.

For instance, if someone’s social goal is becoming a university professor, he or she must complete the necessary education and training and publish research papers in academic journals.

Why does one get involved in all these processes? Because it changes one’s class, and one’s role and status in society improve. Therefore vertical social mobility is the most extensive incentive system in American society.

The reason the US became the world’s hub of innovations, discoveries, research and advances in cutting-edge technologies is its strong embrace of vertical social mobility with its incentives for individuals. The American dream is to have a better life, liberty, and pursuit of happiness.

Education is the main propeller to upward social mobility. American universities are supposed to equip the students for higher income, better roles and status. Many US universities have been considered the best in the world because of their liberal education pedagogy.

However, these circumstances no longer prevail in the US. I see three fundamental reasons behind the withering of the American dream.

The first is that US schools, colleges and universities were supposed to provide a level playing field for children of any economic background, but after the mid-1980s economic reforms, this ceased to be the case.

Another is the rising cost of a university degree. The National Center for Education Statistics suggests that in public, private non-profit, and private for-profit educational institutions, the cost of a degree after adjustment for inflation increased by four to five times in 2017-18 compared with 1985-86.

Because of these rising costs, only 18% of American students got a bachelor’s degree in the STEM (science, technology, engineering, and mathematics) field in 2015-16.

Second, rising income inequality has been creating a severe hurdle to the new generation’s upward mobility compared with their parents’ generation. The chairman of the Council of Economic Advisers in the Barack Obama administration, Alan Krueger, and his colleagues invented a “Great Gatsby Curve” explaining how income inequality leads US vertical social mobility to stagnate among the lower and middle classes intergenerationally.

Third, tax policy has played a crucial role in rising inequality in the US. Wealthy Americans have been paying the lowest tax rates in the history of the US. According to Krueger, the average tax rates for the wealthiest 0.1% have declined for five decades. The US tax system is less progressive than in any other OECD (Organization for Economic Cooperation and Development) country. Trump’s tax records tell the gloomy story of a broken tax system.

A speech Obama made in Osawatomie, Kansas, in 2011 gave a glimpse of the US working- and middle-class situation.

He said, “Over the last few decades, the rungs on the ladder of opportunity have grown farther and farther apart, and the middle class has shrunk. You know, a few years after World War II, a child who was born into poverty had a slightly better than 50-50 chance of becoming middle class as an adult.

“By 1980, that chance had fallen to around 40%. And if the trend of rising inequality over the last few decades continues, it’s estimated that a child born today will only have a one-in-three chance of making it to the middle class, 33%.”

Adam Segal, senior fellow at the Council of Foreign Relations, argues, “The United States’ global primacy depends in large part on its ability to develop new technologies and industries faster than anyone else.

“For the last five decades, US scientific innovation and technological entrepreneurship have ensured the country’s economic prosperity and military power. It was Americans who invented and commercialized the semiconductor, the personal computer, and the Internet; other countries merely followed the US lead.”

However, now China is the new center for talent, innovation, and cutting-edge technology as the US lags behind.

The United States cannot maintain its global dominance by merely deploying an armada in the skies, fleets in the ocean, and tanks and artillery on the ground. All these are just deterrence. These are only helpful in imposing terms and conditions on trade negotiations.

For continuity of its global prominence, the US needs new cutting-edge technology, more talent, entrepreneurship, and above all, high productivity. American students must get rewards and incentives for their hard work and sacrifices.

If the US wants to maintain its global influence, whoever wins the race for the White House on November 3 must first fix the broken tax and education systems. The old American incentive system must be restored. A domestic fix will provide greater leverage to the US for its foreign policy.

Bhim Bhurtel

Bhim Bhurtel teaches Development Economics and Global Political Economy in the Master's program at Nepal Open University. He was the executive director of the Nepal South Asia Center (2009-14), a Kathmandu-based South Asian development think-tank. Bhurtel can be reached at bhim.bhurtel@gmail.com.