Why Some Cities Make More Money Than Countries
WHY YOU SHOULD CARE
Because business is good in the land of the free.
When Bernie Sanders gets up to the podium and opines about the largesse of American capitalism, it’s easy enough to imagine Wall Street fat cats smoking thick cigars and playing poker with your hard-earned (and, let’s face it, measly) savings. But there’s more to our almost $18 trillion economy than just the big banks and business capitals — i.e., New York and Los Angeles. To really understand how absurdly huge our financial output is, consider this:
The Atlanta metro area’s economy is bigger than the economy of Israel
Yes, Atlanta’s $325 billion economy in 2014 was bigger than Israel’s entire $304 billion economy, according to gross domestic product figures published by the U.S. Bureau of Economic Analysis and the World Bank. And Hotlanta isn’t alone in raking in the dough: The GDP of major U.S. cities often surpasses those of other developed nations in head-to-head comparisons. San Francisco beats Colombia. Washington, D.C., tops Austria. And please, about those New Yorkers? Put simply: New York City and its suburbs produced more than all of Australia in 2014 ($1.5 trillion to $1.4 trillion in GDP). The Big Apple would be the 12th largest economic country in the world if it were, you know, actually a country.
The United States’ monetary dominance can be chalked up to the country’s large population, abundant natural resources and efficient workers, says Mark J. Perry, an economist and scholar at the American Enterprise Institute, a pro-business, anti-regulation think tank in Washington. “China and India have large populations and land too,” he says, “but they aren’t nearly as productive as we are per person.” (Fighting words?) Perry believes the U.S. succeeds because of its relatively open-market practices.
Not everyone agrees that city-to-country comparisons paint a complete picture. “It’s like if you’re comparing milk,” says Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University. “There’s dairy milk, and then there’s rice milk or almond milk — it doesn’t mean it’s comparable.” In other words: There are different ways to measure economies, including one model that adjusts a country’s GDP to account for lower prices (for instance, if toilet paper in India only costs $1US, while it costs $3 Stateside, that might hurt India’s GDP). Plus, most city models don’t separate fed spending or other outside market influences. Still, adjusting for different prices actually makes the disparity between Atlanta and Israel’s economy even wider, which makes us think that the race between the haves and the have-nots might just be another example of America against the world.