In the American Enterprise Institute’s Debate, How Much Government is Good Government?, David Brooks makes a case for an “energetic government” that “builds character.”
I believe the following passage from Brooks provides the key assumption for his energetic government stance:
…the reason that America got rich in the nineteenth century was because we were the most educated country on earth, and we could count on a certain level of social capital we no longer can.
I don’t believe that’s why America “got rich”.
To me, that’s like saying, I got rich by saving for retirement. That’s not accurate. You were able to save for retirement, and become rich, by creating enough value for others to generate an income for yourself.
Similarly, I believe the cause and effect flows the other way from how Brooks describes it. America became the most educated country on earth, with a certain level of social capital [i.e. things like public education, social security, unemployment, etc.], because America “got rich”.
America got rich through bottoms-up innovations enabled by the most democratic, fair and socially mobile system the world has ever witnessed, capitalism.
If Brooks were to consider that he is wrong about how America got rich and wanted to learn other possible explanations, I’d recommend that he start with Matt Ridley’s book The Rational Optimist. This post and this one discuss some of Ridley’s, and my own, insights on the matter.
Of course, Matt and I could be wrong, but I have not found convincing evidence of that yet. But, would love to hear some.