Rumours of the demise of American enterprise are exaggerated

SOMETHING IS ROTTEN with the state of American capitalism. That, at least, is the sentiment in Washington, DC. Democrats and Republicans argue over the rot’s causes. Progressives blame corporate fat cats. Conservatives finger feckless regulators. But there seems to be agreement across the ideological spectrum that American enterprise isn’t what it used to be: less dynamic and more monopolistic at home, and having its lunch unfairly nibbled by Chinese and other rivals abroad.

Not so fast. As our analysis this week shows, on many measures America Inc is alive and kicking (see Business section). Not everything is perfect, obviously. But a misapprehension of the corporate reality risks ushering in myth-based policies that end up doing more harm than good.

Declinism about corporate America is hardly new. In some ways American business has indeed been less vivacious of late. The share of employment in new companies fell from 4% in 1980 to around 2% in the 2010s. Three in four American workers are employed by a company that is more than 16 years old, up from two in three 30 years ago. Over the past half century ever fewer people have switched jobs or moved across state lines. In the mid...