The USA and Its journey of Economic Superpower
In the words of Edward De Bono, “America is not a country, it’s an idea”.
The modern era is marked by the presence of the United States as the world leader of the economy. With highest-ranking military strength and a solid economy, it is a melting point of an interconnected system that exists worldwide.
Since the year 1871, the modern United States has continued to sustain its position as the world's most powerful and the largest economy. In 2019, in terms of Gross Domestic Product, the U.S economy stood at (approximately) $21.44 Trillion, whereas in 2020 the size of its economy was expected to touch $22.32 Trillion. Well, that’s a huge number!
The United States is the home to a total of three Trillion-Dollar companies making it a powerhouse of business. These are Amazon, Microsoft and Apple. Out of the top 10 richest people in the world, 8 of them belong to the United States. To name a few- Jeff Bezos, Bill Gates, Mark Zuckerberg, Warren Buffett, Larry Page, etc. These statistics are proof of its charm in the world!
As they say, ‘Rome was not built in one day’, similarly, the United States did not just wake up one day and claimed the position of an economic superpower. Dedicated efforts of a number of American citizens, the support of the government party and a belief in constant innovation has made it the most influential nation in the international community.
But, there was a time when America was not a global power. The question arises, then how did it become an economic superpower? What are the factors that contributed to it?
Well, for that we need to turn the pages of history! Let’s do that and decode its journey of becoming the number 1 economy in the world!
1850-1950: A Century That Changed it All for the United States
Before the year 1800, America was not even on the list of top powerful nations.
In fact, at that time India and Britain were economically very strong. Sadly, after Independence India could not reclaim its position in the coming years.
America was trapped between the civil war and focussed on land-based expansions. During that time, Americans were divided into groups having different views. Where one group was supporting the land acquisition, the other group was against the imperialistic thought of more expansion. The latter group believed that it would lead to America getting involved in international politics and finally it would get lost in the havoc.
Then, what happened after 1800 that the entire economic scene of the world took a dramatic turn!
It was the Industrial Revolution.
The advent of the industrial revolution acted like a volcanic eruption of opportunities for America’s economy to grow. As a matter of fact, it needed a more concentrated or centralized administrative system to efficiently handle the surging economy. Thus, the ultimate power got vested in the federal government.
With the start of the 19th century, the United States turned its entire focus on ameliorating its infrastructure. During the 19th-century transport, the business was at boom and for a well-integrated transport business, the prime requirement was a good infrastructure.
Making a smart move and understanding the ultimate demand several businessmen worked vigorously to improve its infrastructure. To facilitate the trade through water, a businessman named Cornelius Vanderbilt worked dedicatedly to make the shipping business effective.
Once it was done, he moved his focus towards building the biggest railroad network in the U.S. A better shipment and road connectivity aided the transport of products helping its economy to grow further. The electric bulb was yet to be discovered during that time and in most houses, the source of light was oil lamps. This automatically pushed the demand for oil. Again the presence of interconnected shipment systems and infrastructure helped to expand the trade of oil.
The first billionaire and an oil businessman John D. Rockefeller saw a great opportunity in the surging demand of oil. Well, he took complete advantage of this situation to expand his business. He not only started a company by the name Standard Oil but it went on to gain whopping shares of 90% in the US oil market. Although, later Standard Oil was broken up into smaller companies like Chevron, Exxon, Sohio, etc.
Then came a man who changed the face of the electricity forever by inventing the electric bulb. He was Thomas Elva Edison. After inventing the electric bulb he went on to start a firm by the name General Electric whose present market capitalization is nearly ₹4 Lakh crores. With the invention of the electric bulb and its commercialization, the United States witnessed a significant hike in demand for electrical appliances that further provided a backbone for economic expansion.
Businessmen in American were well aware that infrastructure would play a vital role in industrial development. And, they were working in this direction as well. For instance, Mr Andrew Carnegie did something that seemed impossible at the time. That Scottish man found out that when iron and carbon metal are heated at high temperature, a much stronger substance, steel is obtained. He used it to build one of its kind Mississippi Railroad Bridge.
Quit, a creation!!
It was after this that steel gained popularity helping Andrew Carnegie to expand his business. He also helped to build the well-known skyscrapers in the United States. All such discoveries and inventions helped American to gain an edge in industrial output during the 1890s. It went ahead of Great Britain too.
As the years passed the baton of innovations got handed over from some entrepreneurs to others.
One of them was Henry Ford who changed the face of the 4-wheeler industry by initiating mass production of vehicles.
What Happened after 1910?
Between 1850-1950, the GDP of the United States witnessed a sharp pickup. During 1950, it had a 60% share in industrial output of the entire world. With the start of the 20th century, the economy of the United States had gained the position of the biggest economy in the world!
After the 1950s the U.S turned its focus on other sectors such as service and technology. Although the industrial revolution of the United States went on throughout the time of World War II. It led to massive loss and destruction in European nations such as Great Britain, Germany, Italy, France. On the other hand, the United States reaped heavy benefits.
Yes! Where European countries were busy in war and bloodshed, the United States was aiming for a jackpot.
During the World War, it transported necessary weapons to a number of European nations to fight the war. You would be surprised to know that before World War II time, America was going through a Great Depression since 1929. This went on for a good 8-10 years.
But, the advent of World War provided a merry situation for the U.S. The export of weapons to European nations during World War II pumped in a huge capital into the U.S economy. So much so that the U.S. was out of the Great Depression. World War II crippled the economic condition of most European nations but amid all these United States rose with flying colours!
The United States followed its growth even after World War II. This is reflected by the GNP estimate of the U.S in 1940 was approximately $100 Billion that spiked to $5200 Billion in 1980. Woah! Its GNP grew by 5100% in 47 years.
The Technology Revolution-
After conquering the industrial sector of the world, the U.S. turned its focus to the ever-growing technology sector. Tech giants such as IBM, Apple, Microsoft, etc revolutionised the IT world of America taking the technological revolutions to new heights.
Thanks to immigrants in the United States!
The U.S has been a melting point of immigrants from all over the world! In fact, as per the statistics of 2017, around 4.44 million people were immigrants. These immigrants bring not only their culture but their intellect and talent too. Their presence and innovative approach of entrepreneurs added to the overall productivity of the nation. The U.S. has faced recession a couple of times but its business-friendly environment and presence of capital in abundance have always kept it going.
Philanthropy Enables Growth-
People like John D. Rockefeller, Andrew Carnegie, etc who acted as the pillars of the development of the United States also made significant contributions towards philanthropic works. For instance, John D. Rockefeller alone donated around $530 million during that time.
The amount was donated towards education, innovation and research programs. It was more like a competition for philanthropy among significant figures of the U.S. The money contributed by businessmen towards sectors like education, research, etc again supported the growth of the United States.
Sadly, India lacks in this regard. There is less to no philanthropy done towards the research and innovation in our country!
America was able to transform its global presence after the 1800s due to continuous innovation,! This innovation has always been supported by technology, high-class infrastructure and availability of natural resources.
Ultimately, it ushered other nations to become an economic superpower!