It was in Singapore that I first heard of the "American Disease," a
primary symptom of which is living beyond one's means. A significant
dimension of this pathology often is a slowing of productivity gains.
When friends in Singapore suggested I look at our productivity record,
I found that in the 1980s, with the exception of Greece, all other
industrial countries delivered stronger gains in productivity than have
we. Worse, when trends of the 1980s are extrapolated through the next
decade, Japan's per capita income exceeds ours by 40 percent, incomes
in West Germany and France are above ours, and the gap between ours and
British and Italian incomes closes.
So what actually happened to per-capita income in Japan, West Germany, France, Britain, and Italy versus the U.S.? Here are the World Bank's numbers for 2007:
Notice: Instead of Japan being 40% richer than us, we're practically 40% richer than them! I bet that linear extrapolations of Chinese per-capita income will prove just as misleading. Anyone care to propose a bet?
* Yes, reunification clouds mattershere. Does anyone know per-capita income for West Germany alone?