I think that the Olympic medal count is an adequate and simple way to measure the general strength of a nation. At least that’s my un-provable hypothesis.
A look at the historical data shows that the countries considered the most advanced have dominated the Olympics. Consider: It doesn’t only require genetic athletic ability for a nation to do well in the Olympics. It requires national will to focus, advanced scientific knowledge on new training methods and nutrition, a healthy population so as to maximize the number of potential athletes, a robust birth rate.
Since 1920, there have been only two countries besides the Soviet Union and the United States to win the most medals in a summer Olympics: Germany in 1936 and China in 2008. The Soviet Union was dominant right up until 1988, after which its collapse decimated national identity and shaved a significant number of the population away. My hypothesis may be attacked in the case of the USSR, since the Olympic medal count in 1988 did not prevent the USSR from collapsing only five years later. But some experts like Niall Ferguson point out that when things go south for great nations, collapse can occur in a short amount of time.
While not perfect, the medal count seems a reliable and easy way to judge the spirit and strength of a nation. Many consider China to be the next superpower. Its performance in recent Olympics, including the 2012 summer games, show that China has indeed focused its national will and intellect. Still, when we consider the population of China compared to the US (or any country but India for that matter) we must conclude that America is still a very great nation.
We can only hope that recent indicators do not prove to us the warnings of Niall Ferguson.