Reassessing American Decline: A Comparative Perspective
The notion of American decline has become a widespread narrative over the past decade, fueled by polarized politics, institutional strain, and a series of domestic crises. However, a closer examination of economic data and comparable figures from the G7 and other advanced economies reveals a more nuanced picture. The United States remains an outlier among rich nations, demonstrating remarkable resilience in output, productivity, and wealth creation.
A Stable Share of the Global Economy
In 1990, the United States accounted for approximately 26% of global gross domestic product (GDP). Despite predictions of China’s inevitable overtaking, the US share remains relatively unchanged at around 25.9% today, assuming Beijing’s growth figures are accurate. This consistency is significant, given the substantial growth of the global economy since the end of the Cold War. In contrast, the combined share of America’s closest allies – Britain, France, Italy, Japan, and Canada – has fallen from around 32% to below 14% over the same period.
Productivity and Competitiveness: A Transatlantic Gap
Productivity has been a crucial factor in the widening gap between the United States and its peers. The US has outpaced the rest of the G7 in productivity growth, driven by technology adoption, capital depth, and labor mobility. Europe’s struggle to keep up has been formally acknowledged at the highest levels, with Mario Draghi’s 2024 report on European competitiveness warning that the continent is losing ground to the US and China in productivity, innovation, and technological scale.
Consequences of a Productivity Gap
The productivity gap has significant implications for the global economy. The US has maintained its position as a leader in output and wealth creation, while its allies have faced weaker productivity growth, demographic pressure, and prolonged underinvestment. This relative contraction reflects the challenges faced by European and Japanese economies, which have struggled to adapt to changing global circumstances.
Wealth Concentration and Capital Formation
The resilience of the US economy is also reflected in the accumulation of private wealth. According to Altrata’s World Ultra Wealth Report 2025, the United States is home to 38% of the world’s ultra-high-net-worth population, with approximately $22.3 trillion in private wealth controlled by 192,470 Americans. This concentration of wealth is not confined to inherited fortunes, as the US continues to generate new wealth through entrepreneurship at a scale unmatched elsewhere.
The Billionaire Effect
The US is home to the world’s five richest individuals, all of whom have built fortunes rooted in technology platforms that have reshaped entire industries. These companies function as capital-generating ecosystems, reinforcing US dominance in finance, innovation, and market depth. The pace of accumulation has accelerated rather than slowed, with the number of ultra-wealthy Americans rising by 21% in the past year alone.
Why Others Have Struggled to Keep Up
Wealth creation elsewhere has faced structural constraints. China’s ultra-wealth population has continued to grow, but at a slowing pace, as tighter state control and trade restrictions weigh on its technology sector. Europe has crossed the symbolic threshold of 1,000 billionaires, yet its growth remains more cautious and institutional, with less tolerance for the volatility that characterizes US capitalism.
A Different Kind of Imbalance
The US economy is not without its challenges, including income inequality, lagging infrastructure investment, and high healthcare costs. Public finances are under sustained strain, with a federal deficit of roughly $1.8 trillion in fiscal year 2025. However, measured against its peers, the United States has not drifted into economic marginality. Instead, it has pulled further ahead at a time when many allies have struggled to adapt.
Conclusion: A Complex Picture
Predictions of American decline tend to focus inward, drawing conclusions from political dysfunction alone. A comparative view, grounded in output, productivity, and wealth, suggests something more complex: a country whose internal problems coexist with an economic position that remains, by global standards, unusually strong. The US has maintained its position as a leader in the global economy, while its allies have faced significant challenges in adapting to changing circumstances. As the global economy continues to evolve, it is essential to consider the complexities of American decline and the implications for the world order.
