Another View: America needs to get back to roots

Two hundred and thirty-three years ago, the 13 colonies declared independence and unleashed a great experiment in democracy and economics.

The colonies were cogs in the British mercantile system, importing products made in British factories and exporting naval stores and agricultural products at modest prices. In 1776, the colonies lacked the money and industry to properly equip an army.

Tempered by settling a wilderness, Americans were skilled engineers — witness, Washington’s Potomac Canal and Franklin’s inventions. Knowledge of terrain and technology permitted Washington’s officers to rely on their ingenuity to obtain the necessities of war, repeatedly escape annihilation, and surprise and outwit British generals.

Ultimately, the Continental Army wore down Britain’s will to wage war, and many in Parliament grew sympathetic to American grievances and ended the conflict.

American audacity was motivated by ideas gaining currency in Britain—prudent government and national wealth are best served by free men competing for votes and through their enterprise in markets.

Americans, freed from British mercantilism, created new industries and became global exporters of cotton, grain and factory products. At the Philadelphia Centennial Exhibition, Europeans marveled at American technology.

For the next 75 years, the American economy transformed waves of immigrants into prosperous citizens. Democratic capitalism made America the modern Athens.

After World War II, the United States, with British help, harnessed ancient national rivalries into productive competition by creating a global commercial system. The dollar at the center became the world’s currency of choice.

In the celebration, America lost its way. Instead of making what the world wanted in order to pay for what it lacked, the U.S. manufactured too little and borrowed too much.

Oil from Saudi Arabia, cars from Japan and televisions from China, all too frequently purchased on credit. Now, foreigners are uneasy about the U.S. ability to pay.

Around the world, improvising people are inspired more by governments that fill stomachs than by high-sounding ideals. Since the early 1990s, the Chinese economy has lifted millions from poverty, while the U.S. economy has suffered the dot.com and banking busts.

China’s autocratic state capitalism may be vaguely reminiscent of prescriptions offered by dictators during the Great Depression, but it is successful and capturing the attention of developing nations who find U.S. prescriptions tinny.

President Obama encourages youth to pursue careers in public service. Engineering departments at universities are populated by foreign students, while Americans study finance and poetry.

Social justice, banking and the arts are important, but only if Americans can make things to pay their way. Otherwise, foreign creditors will call in U.S. markers, and Americans will be forced to sell off their businesses to pay their debts.

Americans must again make things the world wants, or foreign investors will buy up their country and swallow their sovereignty much as Roman legions toppled Athens.

Peter Morici is a professor at the University of Maryland’s Smith School of Business and the former chief economist at the U.S. International Trade Commission.