Americans pause today to celebrate the birth of a nation that has literally changed the course of humanity during its 241 year history. All across the country, at picnics, backyard barbecues and fireworks exhibits, we will enjoy a well-deserved break from the grind - and perhaps pause for just a moment to reflect upon our blessings as a nation.
But exactly how grateful we should be is seldom fully recognized. Just how fortunate are we to be Americans?
The National Retail Federation estimates we will spend $7 billion on food for our Independence Day festivities. That number is about twice the entire output of the 13 colonies in 1776 in today's dollars. The colossal expansion of the American economy has been nothing short of miraculous.
Christopher HopkinsReal GDP in 1790, three years after the ratification of the U.S. Constitution, stood at $4.5 billion measured in 2009 dollars. By 2016, total U.S. output had grown to $16.7 trillion, more than a 4,000 percent real increase.
Of course, population has grown from 4 million to 326 million over that time, but that does not come close to explaining the difference. Per capita real GDP (output per person) has ballooned more than 50-fold, from $1,100 per person to $51,000 today in constant dollars. Phenomenal.
Life in early America was largely agricultural. In 1800, nine out of 10 people in the United States lived on a farm. By 2016, less than 2 percent of the population was employed in agriculture and productivity has gone through the barn roof. Not only do we feed ourselves, but U.S. farmers export a net value of $16 billion each year.
What began arguably as the greatest real-time experiment in self-government has inarguably produced an economic miracle of historic proportion. Beginning with a commitment to economic liberty and free enterprise, conditions were nearly perfect for the young nation to blossom into the commercial juggernaut of today. It is appropriate that Adam Smith published The Wealth of Nations in 1776. The Founders were well acquainted with the puissance if not necessarily the appellation of his "invisible hand."
The Constitution enshrined certain indispensable principles essential to promoting economic expansion. Of paramount importance was the protection of private property rights. This included the right to retain and profit from intellectual property through the ownership and protection of patents and copyrights.
The establishment of a uniform currency facilitated interstate commerce and contributed to the success of our unique and delicate assemblage of semi- autonomous states in a Federal alliance strong enough to survive the existential threat of civil war.
The confluence of land, capital, private ownership and free enterprise proved successful beyond the wildest dreams of the Founders. Today the U.S., with around 5 percent of the world's population, generates almost one fourth of all the world's GDP.
We are not without challenges, including a systemic and worsening imbalance in wealth and education. But by nearly any standard, we have much to be thankful for. The average American born in 1790 lived just 36 years. A baby born last year in the U.S. has a life expectancy of 80. And for most of us, those years will be less dedicated to basic daily chores of subsistence, leaving time for leisure and study not accorded to our forebears. We must clearly do more to address the corrosive expansion of income inequality, but average Americans are decidedly better off in general and enjoy higher living standards than most of the world's population.
So happy birthday to the most remarkably successful nation on Earth. May we never lose sight of the guiding principles that nurtured this remarkable success.
Christopher A. Hopkins, CFA, is a vice president and portfolio manager for Barnett & Investment Co. in Chattanooga.