U.S. economy fails to deliver on social progress
By Chris Tomlinson via Houston Chronicle
The American economy is not paying off for most Americans.
Americans of all political stripes are unhappy with business as usual. Their dissatisfaction comes from the social contract, an expectation that business will better our society through increased innovation, trade and wealth. And American business is not improving the lives of average Americans.
For proof, check the Social Progress Index, a holistic measure of a country's social performance created by the nonprofit, nonpartisan Social Progress Imperative.
The index compares a range of social and environmental indicators that capture three dimensions of social progress: basic human needs, foundations of well-being and opportunity. The United States ranks 18th out of 128 countries, and it underperforms against 15 countries with a similar per capita gross domestic product.
"The U.S. is not only slow to produce social and environmental outcomes, it is failing to address basic human needs, equip citizens to improve their quality of life, protect the environment, and provide opportunity for everyone to make personal choices and reach their full potential," said Michael Green, CEO of Social Progress Imperative. "Regardless of economic growth over the same period, a society which fails to meet its own social needs is not succeeding. And it is certainly not competitive on the global stage."
If you are one of those people who reflexively think the U.S. is the best country in the world in every category, stop reading now. Because the only category where the U.S. excels is in access to higher education.
Compared with its economic peers, the U.S. ranks poorly in water and sanitation, personal safety, access to information, communications and health and wellness. Most disturbingly, the U.S. is slipping when it comes to personal freedom and tolerance.
Americans need to remember, that like a business, a country can't afford to coast on past successes. And money isn't everything.
"The U.S. is the wealthiest G7 country in terms of per capita GDP, for example, but it is lagging behind other leading countries in areas like education, health, personal safety, and inclusion," wrote Michael Porter, a Harvard Business School professor who co-authored the 2017 Social Progress Index report. "America's failure to advance social progress is limiting our economic growth and standing in the way of prosperity that is widely shared. Countries must rethink how they measure success."
The question facing Americans is not whether we must choose between capitalism or socialism, but whether we consider ourselves a united people or a land of individuals. The growing income inequality and political division in our country signifies that too many people are only interested in what's best for them and the political anger is coming from the vast majority who see their standard of living slipping.
It doesn't have to be this way.
A nation's social contract is expressed through its laws, regulations and taxes. Laws against selling drugs, exploiting workers or limiting child labor are examples of what we think are appropriate limits to seeking a profit.
Taxing the fortunate to help the needy, or using some of the nation's wealth to build roads and schools, is the social contract in action.
Commerce is the underpinning of every society, and no nation achieve greatness without a thriving private sector. But let's not forget that businesses can only succeed when the consumers they serve are also thriving.
Capitalism is a superior system when used properly because competition creates optimal outcomes by empowering consumers. But when corporations become paramount, and so very many people are unhappy with the current system, then it's time to reconsider the social contract.
The social contract is in constant need of tweaking. This Social Progress Index gives us an idea of where improvements are needed to create a more perfect union.