By Žikica Milošević
Talking about the US economy is like talking about The Rolling Stones. It’s hard to remember when did they become the No 1, and it is also hard to see what their impact is and when they’ll stop being the No 1. America has been the leader of the world economy since 1945, and which influence is so strong that we cannot possibly hide from it in a globalized world.
FROM COLONIAL FARMERS TO LEADERS
The question is whether the globalized world, as imagined by its creators, went hand-in-hand with America, or hand-in-hand with others who have managed to catch up to America. Let’s leave that question to serious analysts. In any case, for 75 years, America has been the largest economy in the world, compared to which other large economies looked like dwarfs. Bill Bryson said that as early as the 19th century, the British became aware of the fact that, thanks to its vast territory, America was capable of producing milk, corn, wheat, or any agricultural product cheaper and more efficiently. The two world wars that European allies fought on their territory, which caused Germany, Italy, France and Britain to suffer great destruction, while America avoided the war on its territory altogether (Pearl Harbor aside), contributed to the US becoming the No 1. Of course, the readiness to quickly industrialize and implement all the achievements of the Industrial Revolution was the fuel during the 19th, 20th and 21st century that propelled the American economy to the very top of the world.
THE BIGGEST HITS OF THE U.S. ECONOMY
The economy of the United States is highly developed and mixed. It is the world’s largest economy by nominal GDP and net wealth and the second-largest by purchasing power parity (PPP). It also has the world’s eighth-highest per capita GDP (nominal) and the tenth-highest per capita GDP (PPP) in 2019. The U.S. has the most technologically powerful economy in the world and its firms are at or near the forefront in technological advances; especially in computers, pharmaceuticals, and medical, aerospace, and military equipment. The U.S. dollar is the currency most used in international transactions and is the world’s foremost reserve currency, backed by its economy, its military, the petrodollar system and its linked eurodollar and large U.S. treasuries market. The New York Stock Exchange and Nasdaq are by far the world’s largest stock exchanges by market capitalization and trade volume.
HOW DOES AMERICA CONQUER TODAY?
Back in the day, America ‘conquered’ the world with its agricultural products. Although the U.S. was among the first countries to adopt the technologies from the British, today, America conquers the world with its capability to set new trends, like Silicon Valley.
If the old technologies discontinue, this leads to devastated regions, such as Rust Belt or Detroit, once one of the most contemporary cities in America, which in turn, results in political upheavals in the election. Economic freedom provided by the private sector is a central feature of the U.S. economy which allows the private sector to make most economic decisions in determining the direction and scope of what the U.S. economy produces.
This is exacerbated by the relatively low level of regulation and government involvement, as well as the judicial system that generally protects property rights and enforces contracts. As a result, there are 29.6 million small businesses in the United States today, 30% of the world’s millionaires, 40% of the world’s billionaires, as well as 139 of the world’s 500 largest companies. Most firms in America are small businesses, not corporations. The U.S. has become the No 1 in the world thanks to the spirit of small entrepreneurship and great leadership in the world economy, which are the two pillars of the American economy.