Most nations are bound by tribe or throne. From the beginning, America pioneered to be different, the first nation founded on a proposition: that free people, left to their own devices, could build something lasting. It wasn’t inherited wealth or ancient titles that built the country, it was frontier grit, rugged individualism, and a belief that dignity could be earned through initiative, courage, and ideas. This mixture, over the course of 249 years, made the United States not just an anomaly, but an economic superpower.
Today, the US economy represents nearly one-quarter of global GDP, despite being home to just five percent of the world’s population. Its GDP per capita ($83,000), is double that of the European Union ($41,000) and far surpassing Russia ($15,000) and China with ($13,000), a testament not just to scale, but to productivity, innovation, and dynamism.
As the Institute of Economic Affairs recently highlighted, even Mississippi, the poorest US state, has a per-capita GDP that now exceeds that of the United Kingdom and rivals France. In the words of IEA’s director Douglas Carswell, “The poorest state in America currently has a higher per capita GDP than Britain. And we’re about to overtake Germany in per capita GDP growth terms this year.”
It’s worth remembering what made America exceptional. This system attracted people who wanted more, gave them room to discover and create, and protected their right to do so. In other words, immigration, innovation, and institutions each made America a powerhouse.
I. Immigration
Economist Thomas Sowell spent a lifetime dismantling the idea that race or background determines success. What matters most, he argued, is not the origin of the person, but the environment they step into. “Nothing is more common than to have poverty-stricken immigrants become prosperous in a new country and to make that country more prosperous as well.” This is most evident in America’s immigration story.
Immigrants make up just 14 percent of the US population, yet they account for 27 percent of all entrepreneurs. Over 44 percent of Fortune 500 companies were founded by immigrants. Critics of immigration often raise concerns about crime or assimilation, but the data tell a different story. The Cato Institute finds that immigrants commit proportionately fewer crimes than US citizens: “illegal immigrants were 26 percent less likely than native-born Americans to be convicted of homicide, and legal immigrants were 61 percent less likely. This general trend also holds for 2022, where the illegal immigrant homicide conviction rate was 3.1 per 100,000, 1.8 per 100,000 for legal immigrants, and 4.9 per 100,000 for native-born Americans.” Pew Research Center finds no large language barrier as, “about half of immigrants ages five and older (54 percent) are proficient English speakers — they either speak English very well (37 percent) or speak only English at home (17 percent).”
Immigrants make up a small fraction of our population, yet comprise more than a quarter of all entrepreneurs, commit fewer crimes, and arrive ready to embrace our language and culture. What changed wasn’t their DNA, but the system around them. In America, they found legal stability, economic flexibility, and a cultural embrace of striving. Sowell’s insight is clear: the environment matters, and America, more than any other place, has provided one where effort is rewarded.
II. Innovation
Immigrants have long done more than merely work hard in the United States; they have discovered new possibilities. Austrian economist Israel Kirzner frames entrepreneurship as alertness: the ability to perceive opportunities that others miss and to unlock hidden value. Because America rewards risk-taking and treats failure as a learning step rather than a life sentence, it has proven especially fertile ground for this kind of discovery. The Office of the United States Trade Representative notes that there are 28 million American small and medium enterprises, accounting for over 60 percent of new private sector jobs.
Elon Musk left South Africa to show the world that electric cars, Tesla, and private spaceflight, SpaceX, could be both viable and desirable. Jensen Huang arrived from Taiwan as a child and founded NVIDIA, now central to the AI revolution. Raised in India, Sundar Pichai rose to lead Alphabet, the parent of Google. From all corners of the globe, these innovative immigrants came, spotting possibilities hidden in plain sight and daring to act on them. These innovators didn’t merely benefit from the American system; they extended its promise and returned tenfold their contributions to society. Tesla, NVIDIA, and Google are household brands changing our world because their founders risked everything.
Neither is innovation incarcerated in Silicon Valley. In industries as diverse as biotech (Pfizer’s mRNA breakthroughs), energy (ExxonMobil’s carbon capture), agriculture (John Deere’s AI farming), American innovation remains multifaceted and diverse. Indeed, rag- to-riches stories still exist, as former CEO of Starbucks, Howard Schultz, proclaimed during a Senate Health Committee hearing: “I came from nothing. I thought my entire life was based on the achievement of the American dream.” Kirzner’s theory explains their success: in an open society like America, where failure isn’t fatal and risk is rewarded, entrepreneurial discovery flourishes.
III. Institutions
But none of this, neither the immigration nor the innovation, would have mattered without the right foundation. That foundation, as recent Nobel laureate Daron Acemoglu has shown, relies on a nation’s institutions.
In Why Nations Fail, coauthors Acemoglu and Robinson explain that prosperity arises not from natural resources or population size, but from institutions that protect property rights, enforce contracts, and enable open participation. What they call inclusive institutions create the structural environment where individuals can pursue opportunity without fear of expropriation or arbitrary rule. No document embodies this better than the Declaration of Independence: “all men are created equal… endowed by their Creator with certain unalienable Rights… Life, Liberty and the pursuit of Happiness.” With quill and ink, the Founding Fathers embedded principles that limited government power, safeguarded property rights, separated powers, and recognized individual liberty as inherent rather than granted by the state. From the beginning, these inclusive institutions promoted individuals’ self-determination to command their lives, providing the legal and political scaffolding for America’s long-term prosperity.
The United States created a unique framework, grounded in common law, decentralized governance, and separation of powers, foreign to all other nations led by despots and dictators (then called kings and queens). The new landscape emboldened the brave, equipped with courts, capital markets, enforceable contracts, and a can-do culture. The consequences include America’s position with the most billionaires in the world. We must ask: if poverty is man’s natural state, what is this country doing so differently?
America’s greatness wasn’t inevitable. It was earned through three interlocking forces:
Immigration, which brought the dreamers and doers.
Innovation, which turned dreams into industries.
Institutions, which protected both the dream and the dreamer.
To commemorate the 249th anniversary of this American experiment, we’d do well to remember what built it. Not protectionism. Not bureaucracy. Not walls. But the courage to arrive, to try, to fail, and to build again.
In his work on the American character, Australian Sam Gregg (now president of the American Institute for Economic Research, the oldest think tank in the country), describes the United States as a “merchant republic,” a society not embellished in its aristocracy or bureaucracy, but in enterprise and opportunity. It wasn’t crafted for elites; it was shaped by ordinary citizens who took risks, built businesses, and believed that dignity could be earned through effort. Here, for the first time, the builder came before the bureaucrat.
We didn’t become great by keeping people out. We became great by letting the best in, treating them fairly, and giving them a reason to stay.