In their latest report, the World Economic Forum ranks the U.S. economy as the world’s third most competitive, behind only Switzerland and Singapore. But as James Pethokoukis notes, what this really means is that the “US is the most competitive large economy.”
Too often we forget just how “large” the U.S. economy really is—and why it matters. We prefer to compare things that are semantically similar, so we lump the U.S., Switzerland, and Singapore under the category of “countries.”
But the U.S. economy is so big we could, for economic comparisons, consider it a collection of city-states. That makes more sense since the GDP of Switzerland (85 billion) is comparable to the GDP of the Hartford, Connecticut metropolitan area (also 85 billion), and the GDP of Singapore ($308 billion) is comparable to the Seattle-Tacoma-Bellevue, Washington area ($301 billion).
Indeed, as this chart produced by AEI shows, the GDP of U.S. metro areas is comparable to entire countries.
If our cities were countries they’d be among the largest economies in the world: New York would be the 12th, LA would be the 17th, and Chicago would be the 21st largest. So why does this matter? Because, as Mark J. Perry says,
It’s a demonstration that “free market capitalism is the best path to prosperity” because it was largely free markets and capitalism that propelled the nation from being a minor British colony into an economic superpower and the world’s largest economy, with dozens of metro areas that produce the same amount of economic output as entire countries.
Free markets—even in the limited form we have in this country—have unleashed an incredible level of prosperity in the U.S. and led to an enormous increase in human flourishing. Imagine what it could do for the rest of the world, if they’d only give free enterprise the opportunity.
