Banana Republic or Opportunity Society? Part II: The Transnational Perspective

posted on: April 25, 2011

In a previous NCRP blog post, I argued that U.S. foundations must offer more than a traditional charity of “a thousand points of light” if they hope to play an appreciable role in helping our country overcome the unprecedented Mega-Challenge facing us: downward social mobility for most of the current generation of young adults in America, an event never before witnessed in U.S. history.

My argument rested on American-specific studies of trends in social mobility and median family income. Both types of data indict a single culprit: maldistribution of GDP into ever fewer hands at the top of the socio-economic spectrum, which skews not only income and wealth equity but also health and educational outcomes.

These American-specific data are sadly corroborated by the latest transnational data showing that the quality of life of average Americans continues to slip relative to other advanced democracies. This bad news comes from the 2010 edition of the U.N.’s annual “Human Development Report Index” (HDI). HDI is fast replacing “per capita GDP” (that absurd relic of the 20th Century) as the best single ranking of national well-being because HDI measures not just income, but also health, education and other metrics. Moreover, HDI focuses on medians rather than averages (the latter, of course, fails to measure distribution).[1]  This year’s report shows the United States’ overall quality of life has slipped all the way down to 12th among nations when measured according to HDI’s newest methodology, which wisely factors in inequality as a separate variable affecting living standards.[2]

The U.S. seems poorly positioned to improve its rank any time soon.  That’s because other transnational surveys show our country scores low on the future-shaping metrics of health and education. When it comes to infant mortality, for example, out of 33 Organisation for Economic Co-operation and Development (OECD) countries analyzed by a recent report by the Centers for Disease Control (CDC), the U.S. ranks a disgraceful 28th, behind countries like Cuba and Singapore.[3]  The U.S. only ranks 6th in the world for average longevity (and 6th is the most charitable possible interpretation of U.S. performance considering that many of the countries surveyed ended up tied for their respective positions as well as the terrible discrepancies of longevity within the U.S. population based on race, income and geography).[4] As for education, the U.S. gets mediocre grades compared to other OECD countries.[5]

Even as we Americans fail to create widely shared prosperity for our citizens (or succeed at all economically judging by our inability to generate a single trade surplus since 1975[6]), we continue to consume more energy overall in the aggregate and on a per capita basis than any other country, thus playing a shameful lead role in fomenting the cataclysm of global warming.[7]

When the U.N. issued the 2010 edition of HDI in November, I expected it to ignite passionate discussion and soul-searching in U.S. philanthropy as to how we, as a sector, can do better to help ensure that GDP growth indeed translates into opportunity for all Americans. Instead, the 2010 HDI was met with deafening silence.[8]

In part, U.S. philanthropy’s blissful ignorance of HDI fits into a larger American culture that too often seems to disregard the world outside our borders.  Native-born Americans, even fancy philanthrocrats with our fancy degrees, rarely speak foreign languages or travel much abroad. And we Americans have all been raised to view with skepticism the U.N. (though this is somewhat understandable given that institution’s partially justified reputation as a bureaucrat’s paradise and balloon of hot air).

But whatever the shortcomings of the U.N. as an institution, serious researchers know that its HDI report has a 20-year record of quality and constitutes, in the words of Gregg Easterbrook, “One of the world’s most significant documents.”

Why is it that we Americans excelled mid-20th century at creating widely shared prosperity but now are failing?  Why does the United States continue to willfully play the lead role in accelerating global warming?  And why do American foundations (with a handful of exceptions) refuse to act on – or even acknowledge — the overwhelming evidence that our American model of relatively laissez-faire capitalism is driving both these destructive trends?

In my next and final blog on this topic, I will sketch an answer to these inter-related questions by examining our peculiarly American “small state/big charity” tradition of managing capitalism and point out why and how philanthropy must, finally, find the courage to help our country transform it.

Sean Dobson is field director of the National Committee for Responsive Philanthropy (NCRP).

1. For a thorough critique of “per capita GDP” see Commission on the Measurement of Economic Performance and Social Progress
2. The 2010 U.N. report issues two sets of national rankings: one using the old methodology it has employed over the past 20 years that relies mostly on per capita measurements of income, health, education, etc.; and a second ranking based on its new methodology that also factors in inequality in these metrics and as a separate variable and thus better measures real, median distribution of these goods. The old methodology shows that the U.S. ranks 4th place among nations; the new ranking shows the U.S. at 12thplace. For the record, the countries that score higher than the U.S. are (in this order) Norway, Australia, Sweden, Netherlands, Germany, Ireland, Switzerland, Canada, Iceland, Denmark, and Finland. See, p. 148, Table 2; and, see p. 153, Table 3.
3., p. 184, Table 22.
4., p. 185, Table 23.
5., and, p.67, Table 24b, and, p. 17, Table 9.
7. Kirsten Lewis and Sarah Burd-Sharps, The Measure of America, 2010-2011 [The American Human Development Project] (NY: Social Science Research Council and NYU Press, 2010), “OECD Indicator Tables – Preserving the Earth for Future Generations”.
8. Happily, there has at least been some philanthropic attention paid to research cited directly above, i.e., to the American Human Development Index (ADHI), a project of the Social Science Research Council and modeled on (though distinct from) the U.N.’s HDI. The ADHI offers a much more detailed and accurate picture of American well-being than per capita GDP. But except for some appendices, ADHI looks at U.S. statistics in isolation and therefore does not challenge foundations to view the United States’ declining median standard of living in transnational perspective – a perspective, I believe, that makes it clearer there is nothing inexorable about this decline and that it can therefore be reversed.