Mar 21, 2024 | Socio | Political | Economy
By ibnsre
As of now, the GDP of the United States of America (USA) surpasses $25 trillion, constituting over 13% of the global GDP. The USA stands as one of the foremost global powers in terms of economy, military strength, and technological prowess. However, this dominance and substantial share of the world GDP have been achieved only in the past century, since 1900. How did the USA ascend to this prominent position within such a relatively short span of time?
America was originally a colony of Europeans. On July 4, 1776, American revolutionaries declared independence from the British, marking the birth of a new democratic country. This event heralded the establishment of the United States of America and marked the beginning of its journey toward superpower status.
Therefore, if a new country considered joining the United States or becoming part of the British, French, or Spanish colonies, each country would prefer to join the United States. This preference arises from the promise of enjoying the same freedom and democracy as many other states within the nation. This explains why states like Florida, Illinois, and Ohio chose to join the United States rather than remain colonies under Spanish or British rule.
In 1836, Texas was a state that gained independence from Mexico, but Mexico continued to oppress them to such an extent that they chose to join the United States. Similarly, other states continued to join the United States one after another, contributing to the nation's ongoing development. Each state had its reasons for joining the United States. While America was a democratic country, its intention was to expand its territory as much as possible. Consequently, in 1867, the United States purchased the territory of Alaska from Russia for 7.2 million dollars. Additionally, there is the case of Hawaii, located in the middle of the Pacific Ocean, far from the continental US, yet it was annexed by the United States. In 1898, the United States overthrew the Kingdom of Hawaii and annexed its territory. Although theoretically America was not a colonial power like Britain, France, and Spain, its behavior resembled theirs. Territories such as Puerto Rico, Guam, and the Philippines were also annexed by the United States.
The United States paid Spain $20 million to annex the Philippines. However, today the Philippines is an independent country, as it gained independence from the United States in 1946. Therefore, all this money was wasted.
By the 1900s, America had become a large country, with several regions being part of the USA. Obviously, the larger the country, the larger the economy and GDP. This is the reason why the US accounts for a significant portion of the global GDP.
The real transformation occurred between 1900 and 1950. Two world wars took place during this period. France, Germany, Great Britain, Spain, and Italy were all engaged in these conflicts, while America remained relatively uninvolved. Although the United States did participate in the world wars, it primarily supplied arms to these countries. The wars did not occur on American soil, and while a significant number of American soldiers lost their lives, there was no adverse effect on the United States' economy. In fact, America was the only country that benefited from the world wars. It sold numerous weapons to Germany, France, and other European nations, resulting in a net profit. Meanwhile, countries like Britain, Germany, and France were left devastated. It wasn't a deliberate attempt by the US to exploit the destruction; rather, it was a matter of circumstance that the US profited during the world wars.
When wars broke out in European countries, Europeans feared that their currencies would lose value and their economies would collapse. To safeguard their wealth, they opted to buy US dollars because the US dollar was a stable currency and the US was a very stable country during the world wars. Consequently, many people purchased US dollars, causing the value of the US dollar to soar.
In 1944, as WWII was nearing its end, the 44 Allies convened and decided to stabilize their currencies by pegging them to the US dollar, which in turn was pegged to gold. This decision elevated the US dollar to the status of an international currency. Subsequently, organizations such as the International Monetary Fund and the United Nations were established.
The United States played a very important role in the creation of GATT - the General Agreement on Tariffs and Trade. It was founded in 1947 by 23 countries. These countries decided to reduce trade barriers between them in order to increase their economic growth. This meant that instead of promoting indigenous products and nationalism, they would promote international trade and globalization. The GATT was later transformed into the World Trade Organization (WTO) in 1995.
After 1950, the United States and the Soviet Union emerged as two major superpowers, marking the beginning of the Cold War. This war, between the United States and the Soviet Union, was an ideological conflict between communism and capitalism.
During the Cold War, nearly every country aligned itself with either the United States or the Soviet Union. Therefore, it was not surprising that when almost all countries chose to align with one of the two superpowers, both countries became much more powerful. They both achieved superpower status.
After the collapse of the Soviet Union in the 1990s, it appeared that only one superpower remained in the world.
Several presidents in the United States took the oath of office. Some of these presidents focused on military power, such as Ronald Reagan, Richard Nixon, George Bush, and Donald Trump. On the other hand, some presidents focused on building peaceful alliances, leading to peaceful progress in the country. Examples include Al Gore, a Vice President of the USA, Roosevelt, Woodrow Wilson, Jimmy Carter, and Barack Obama.
Woodrow Wilson was the President of the United States who decided to keep America out of WWI. The USA intervened in 1917 when it became clear that the war would end with American intervention. Wilson created the League of Nations, an international organization similar to the United Nations but established before it, in an effort to bring peace to the entire world.
There were other internal reasons why America became such a powerful superpower. One such internal reason is that American policies have always attracted talent. There are many examples, such as Kalpana Chawla, Sunita Williams, and Satya Nadella. How many Indians have become successful after moving to America? Albert Einstein, originally from Germany, became popular after moving to America. Elon Musk, hailing from South Africa, came to America and achieved great success. America's policies and its culture encourage talent.