Understanding Americas Trading Relationship with Planet Earth
The Rise of the American Economic Empire
For those of you who have been living in a cave over the last 18 months, the topic of “unfair,” “bad” and “disastrous” trade deals exploded into the American lexicon through the politicization of free trade agreements that have become popular political fodder. Up until the recent presidential election when both Bernie Sanders and Donald Trump could actually agree on something, most Americans thought about international trade about as much as a Connie Chung Christmas special.
Fair trade and the lack thereof has been used to explain a perception held by many Americans that the United States has lost its prestige and has willingly surrendered political, economic and security interests in the name of globalization and a new world order. Americans have legitimate anxiety about the future and America’s role in shaping it. Have the tides of globalization actually reached a point that now unfairly advantages other nations like China, or does America receive more wealth and prosperity from a larger global economic pie as many proponents espouse?
Understanding The American Economic Story
According to Oxford University the United States economy surpassed Great Britain in the early 1890s under President Benjamin Harrison as the world’s largest economy. By 1950 The United States may have produced as much as 50% of the worlds GDP shortly after World II. Gross domestic product has been defined as the total value of all finished goods and services produced in the countries borders over a set period of time. Over the course of its short history America has adapted and prospered as the world changed.
|Emergence||1776-1866||American Revolution – Conclusion of Civil War|
|Rapid Growth||1867-1945||Reconstruction – Conclusion of WWII|
|Consolidation||1946-2000||Baby Boom – Y2K|
|Slowing Growth||2001-Present||September 11th – Present|
|Re-Invent or Decline||?||?|
Winning Defines the American Spirit
No other empire in human history has surpassed the milestones of global economic growth achieved by the United States. To put the magnitude of the American success story into perspective, the Roman Empire at its peak circa 100 AD reached an estimated of 28% of world GDP and Great Britain reached its peak of 21% of global GDP in 1870, making it the “empire where sun never sets.” For over 125 years Americans have grown accustomed winning, and as a result have controlled the largest economy in the world.
|YEAR||GLOBAL GDP||GLOBAL POPULATION||US GDP||US % OF WORLD GDP|
|1875||$650 Billion||1.33 Billion||$70 Billion||10.8%|
|1900||$1.1 Trillion||1.65 Billion||$209 Billion||19%|
|1950||$5.0 Trillion||2.55 Billion||$2.0 Trillion||50%|
|1980||$11 Trillion||4.45 Billion||$2.9 Trillion||26.3%|
|2000||$34 Trillion||6.11 Billion||$10.2 Trillion||30%|
|2016||$74 Trillion||7.32 Billion||$18 Trillion||24.3%|
|2020||$90 Trillion||7.84 Billion||$21 Trillion||23.3%**|
Source Data: International Monitory Fund
*Historians disagree on the actual calculation of world GDP estimates range from 35%-50%
Hitting the Wall of Large Numbers
From 1950 to the year 2016, global GDP increased from around $4 trillion to $74 trillion, representing almost a 1750% increase. At the same time, world population exploded from 2.55 billion to 7.32 billion, representing a 187% increase. American GDP increased from around $2 trillion to $18 trillion, or an 800% increase with population only growing 112%. In 2001 United States GDP started to slow, while at the same time China’s GDP increased by 5,500%. On a macro level it would appear that the United States has hit the growth wall with significant competition from China.
In some ways the rise of America looks similar to that of a large technology company like IBM. The company experienced a period of complete market domination resulting in rapid revenue and profit growth followed by a period of consolidation and the entry of new competitors. Slower growth resulted from the massive size of the organization. Competitors could be agile and chip away at parts of the business that were not well defended. To continue to grow and ultimately to even survive, IBM had to divest or shut down parts of their business that were no longer profitable or not strategic for the long term growth and prosperity of the company.
Mike Marcil is a visionary business developer with over 25 years of experience in building innovative business ventures. Mr. Marcil currently the CEO of Bakken Financial Inc. Under his leadership the company has expanded investments that includes Real Estate, Technology, and Media.
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