
How America Became an Economic Superpower - tokenadult
http://www.theatlantic.com/international/archive/2014/12/the-real-story-of-how-america-became-an-economic-superpower/384034/?single_page=true
======
alricb
> The vast landscape in between Berlin and Moscow would become Germany’s
> equivalent of the American west, filled with German homesteaders living
> comfortably on land and labor appropriated from conquered peoples—a
> nightmare parody of the American experience with which to challenge American
> power.

Er, the American push westwards _was_ quite nightmarish and genocidal, and US
homesteaders appropriated land much like Hitler planned to do.

~~~
mc32
So what Kept the Bolsheviks from becoming an economic empire, after all it was
the same land Germany would try to use for its economic powerhouse. I mean
very productive land, lots of mineral resources... obviously the Germans saw
it that way. Still to this day, Russia underdelivers, given its vast resources
--natural and human/intellectual.

~~~
finid
> Still to this day, Russia underdelivers, given its vast resources --natural
> and human/intellectual.

That makes it sound as if Russia and the former USSR are one and the same.
They're not.

A better way to restate that sentence is, "The USSR under delivered, in spite
of its vast resources - natural and human/intellectual."

And you don't have to be a rocket scientist to figure out why. In an
atmosphere where fear and uncertainty rules, individual and group creativity
suffers.

Russia is doing better in that area, though there's still a lot of room for
improvement. But it is a young country. Some old habits from the former USSR
still lingers, which is expected given that most of the current leadership
grew up in the former USSR. It take at least one generation to shake bad
habits.

~~~
mattmcknight
"In an atmosphere where fear and uncertainty rules, individual and group
creativity suffers."

Some would suggest it was the lack of incentives to independently pursue
success. There's little point in working hard to get ahead if it is going to
be taken from you.

~~~
zurn
Present day Russia is very much a laissez faire capitalist society. Money and
power are pretty liquid, taxes are low, and self-interest is everybody's
assumed motive. Perfect system of incentives, no?

(This is why the political scene is so hard to decipher, nobody in russia pays
any attention to the stated aims or motives and conspiracy theories are the
default mindset)

~~~
aminok
Without an effective police and judiciary, you can't be secure in your person
or property, and end up paying an informal tax to organized criminal elements
and corrupt police, so no, Russia is still not laissez faire.

~~~
finid
But wait, even with an effective police and judiciary, with the "proper" laws
in place, you still can't be secure in your person or property.

Think about eminent domain and how it has and can be used against those with a
property that the ruling class needs to have.

That might seem like a stretch, but not if you're at the receiving end.

------
vitobcn
There is a great 2009 article from Stratfor [1] ( _The Geopolitics of the
United States, Part 1: The Inevitable Empire_ ) which outlines how America
came to be the country it was in the 20th century.

The article attributes most of American strengths to geographical advantages
and previous geopolitical moves. It's quite a long article, and even if you
don't agree with Stratfor views, I would really recommend reading it.

[1] : [http://www.stratfor.com/analysis/geopolitics-united-
states-p...](http://www.stratfor.com/analysis/geopolitics-united-states-
part-1-inevitable-empire)

~~~
g0v
I'm reading this article and Sratfor says:

"It is worth briefly explaining why Stratfor fixates on navigable rivers as
opposed to coastlines. First, navigable rivers by definition service twice the
land area of a coastline (rivers have two banks, coasts only one). Second,
rivers are not subject to tidal forces, greatly easing the construction and
maintenance of supporting infrastructure. Third, storm surges often accompany
oceanic storms, which force the evacuation of oceanic ports. None of this
eliminates the usefulness of coastal ports, but in terms of the capacity to
generate capital, coastal regions are a poor second compared to lands with
navigable rivers."

This is just after explaining all the economic benefits to a river system like
that of the Mississippi. I am just wondering now about the time after which
the ice caps have receded and the river system in question occupies more land;
would it be wrong to think that this could possibly increase its potential
economic output?

~~~
sdenton4
Alas, times have change, and St Louis (for example) had its peak population in
the mid 50's. We use trucks to move things, now, rather than rivers.

~~~
protomyth
I would like to see where you get your statistics since barge traffic on the
Mississippi is very strong. Trucks get it to the elevators and the barges get
it to the ocean. A bump in the road occurred during the drought of 2013, but
barge traffic seemed to recover.

[http://www.twincities.com/localnews/ci_26504408/mississippi-...](http://www.twincities.com/localnews/ci_26504408/mississippi-
river-barge-traffic-at-winona-highest-12)

~~~
rgbrenner
Take a look at Figure 2.7 on this page:
[http://www.fhwa.dot.gov/policy/otps/bottlenecks/chap2.htm](http://www.fhwa.dot.gov/policy/otps/bottlenecks/chap2.htm)

It's from the Bureau of Transportation Statistics. It shows the amount of
freight (by value, tons, and ton-miles) for each transportation method.

Water (not just the mississippi, but all inland waterways and costal barges)
is 6% by tons, 1% by value, and 9% by ton-miles.

The larger the economy gets, the more goods must be shipped via other modes.
At the end of the day, only so much can fit on the Mississippi.

~~~
protomyth
Yes, trucks do deliver more than anything, but that is the nature of roads,
UPS, FedEx, and the post office. The Mississippi is a large conduit of bulk
items. It is also cheaper to ship than truck or rail (
[https://www.cavs.msstate.edu/publications/docs/2013/03/11509...](https://www.cavs.msstate.edu/publications/docs/2013/03/11509TRA_Eksioglu.pdf)
) with rail being cheaper than truck.

From a little farther in the same article "The water transportation system,
including coastal and inland-waterway barge service, is critically important
for the transportation of heavy, bulky grains, clays, gravels, etc."

It goes on to talk about adding capacity to the waterways. Plus, you seem to
be skipping the multimode column.

> The larger the economy gets, the more goods must be shipped via other modes.
> At the end of the day, only so much can fit on the Mississippi.

The report you cite is basically is talking about the need for more capacity
of our roads. The Mississippi River barge transport is not going away (and
expanding) because it is cheap with good infrastructure.

------
pastProlog
> European states mobilized their populations with an efficiency that dazzled
> some Americans (notably Theodore Roosevelt) and appalled others (notably
> Wilson).

Yes and no. People nowadays really don't even remember the end of World War I.
Russian troops began shooting their officers and marching back to St.
Petersburg and Moscow. Earlier that year were the massive Nivelle mutinies of
French enlisted men. There were the German naval mutinies of 1918, followed by
a powerful but ultimately failed revolution in Germany by communists (put down
by the socialist-run government - echoes of the French communist party ending
the 1968 left-communist uprising which caused de Gaulle to flee France).
Hungarian workers had an uprising and established a Soviet republic in 1919,
which lasted until it was defeated by an invasion by Romania. Italy saw the
Biennio Rosso with factory occupations in Turin etc. which were finally ended
when Mussolini marched on Rome in 1922. As late as 1976 the Italian communist
party was getting over 1/3 of the vote in Italy, with the Socialist party
(with a hammer and sickle emblem) getting 9% of the vote, and the left-
communist Maoists getting over half a million votes (never mind the non-voting
anarchists/autonomists).

Europe mobilized its population twice in the twentieth century. The first time
Russia became communist, the second time everything east of Steppin to Trieste
became communist. With Europe needing the US with NATO, Marshall plan, Gladio
etc. to keep post-WWI western Europe (Spain, Italy and France) from becoming
communist. Eventually Europe's capitalists learned going to war with one
another's countries didn't help them all that much.

~~~
philwelch
> Europe mobilized its population twice in the twentieth century. The first
> time Russia became communist, the second time everything east of Steppin to
> Trieste became socialist.

I like how you gloss over the fact that Russian occupation and military
domination of eastern Europe, rather than populist uprising of leftist
movements, is what caused the latter.

~~~
pastProlog
Like the glossed over fact that US occupation and military domination of
Italy, rather than populist uprising, is what kept Italy with its economic
system undisturbed? The US didn't even try to hide what it was doing during
the fixed elections of 1948, by the time of Gladio, P2, strategy of tension
etc. it had become a little more hidden. The US still occupies Italy with
seven military bases which alternately has hot dog pilots killing civilians (
[http://en.wikipedia.org/wiki/Cavalese_cable_car_disaster_%28...](http://en.wikipedia.org/wiki/Cavalese_cable_car_disaster_%281998%29)
) when they're not kidnapping Arab nationalists (
[http://en.wikipedia.org/wiki/Abu_Omar_case](http://en.wikipedia.org/wiki/Abu_Omar_case)
).

Hungary established a soviet republic on its own in 1919, so it's obvious
there was a populist wellstream of worker's organizations to pull from. It's
also obvious the post-1945 Hungarian people's republic was a popular
government - if it wasn't, the USSR wouldn't have had to invade Hungary in
1956. Because Imre Nagy would have never become prime minister if the USSR had
imposed the government by Russian occupation and military domination.

~~~
philwelch
Ah, tu quoque and moral equivalence, the last resort of any apologist for
communism.

------
chulk90
Unfortunately, the author tweaks facts and statistics to make his claims more
believable than they are.

For example, the author claims that Germany lost its chance to conquer Europe
and the U.S. This is very misleading, and here's why.

Even though Germany rose to the Europe's most industrial and populous nation
state following the unification of 1871, its production capacity was
incomparable to that of the combined outputs of its western rivals. That is
why Otto von Bismarck wanted the newly established Empire to stay out of any
conflicts (and this is why he got fired by the more aggressive Wilhelm II).

The U.S. at that time was nobody. It was still undergoing the post-Civil War
recovery and the Industrial Revolution JUST arrived on the continent. No
European nation was interested in conquering the largely agrarian society.

Germany didn't miss a chance. It had neither the capacity nor the will to
conquer the U.S.

~~~
iaejpiejf23
> The U.S. at that time was nobody.

The US was an APEX power and had been for a long time. Nobody could conquer
it. To claim the US was a nobody is a laughable.

> It was still undergoing the post-Civil War recovery

After the civil war, the US fielded the greatest army in the world and it's
economy was growing because it was shifting to westward expansion. We took
over territory bigger than western europe. Not only that, the US was the
largest producer of oil BY FAR at that time.

> the Industrial Revolution JUST arrived on the continent.

It just arrived in european mainland as well relatively speaking...

> No European nation was interested in conquering the largely agrarian
> society.

No european nation could. Let's stop pretending any european country had any
hope.

A european country conquering the US in the 1800s is like costa rica
conquering the US today. It's laughable.

During the civil war, the US developed much of the military technology that
was used in the first world war a few decades later.

~~~
learc83
Not sure why you're getting downvoted for this because it's true.

In addition, to your points, after the civil war, the U.S. had the largest
number of guns in civilian hands of any country by far. The populace was so
well armed that an invasion would have been ridiculous.

The U.S. also had the largest economy in the world at the time, a population
about the same size as Germany, and had the Atlantic Ocean situated between
itself and an invading army.

By the 1870s the U.S. had a large iron and steel industry and in less than 20
years later (by 1889) the U.S. was producing more steel than Great Britain.

Furthermore, the U.S. had the second largest navy in the world at the end of
the Civil War--a navy that was very modern since it was largely composed of
new ships built during the war. The U.S. Navy was also the most experienced by
far with modern naval combat since they were the first country to use
ironclads in battle. Granted the Navy rapidly declined in size after this time
period, but given that the buildup happened in only 4 years in the first
place, new ships could have been rapidly brought online if a war broke out.

The U.S. was also covered in railroads and telegraph lines by this time that
they could use to coordinate movements and rapidly deploy troops--this was a
huge advantage not available to an invading army.

The idea of a European power invading the U.S. after the civil war is
definitely laughable.

------
vorg
> the U.S. thrust upon every country that wished to return to the gold
> standard (and what respectable country would not?) an agonizing dilemma

What about the silver standard that was used in previous centuries? Oh, the
West spent it all buying spices from China. They tried getting it back by
getting the Chinese addicted to opium and selling them that, but that didn't
last long. So change the rules: use gold instead of silver as the standard!
Until the 1970's anyway when the standard had changed to uranium.

~~~
lifeisstillgood
Could you expand on that please? I understand the iniquitous history of the
Opium wars, but not the economics especially switching from silver to gold

~~~
camhenlin
The majority of valuable Chinese coin was minted in silver (with some attempts
at paper money as well.) The west, especially Spain after its conquest of the
New World, transferred silver directly to China en masse in exchange for
consumable goods. Gold had very little value in China in comparison, and as I
understand was used in more artisanal ways than silver would be.

------
elberto34
In 2014, much like 2014, we saw America only solidify its economic dominance
[http://greyenlightenment.com/?p=1556](http://greyenlightenment.com/?p=1556)

The US dollar and S&P 500 has outperformed all peers

US GDP growth has exceeded nearly all counties, including emerging markets
(adjusted for inflation). Meanwhile Russia, EU, Australia, Canada and Japan
all having problems due to falling oil and stagnation.

Yields still rock bottom due to huge demand for low yielding debt

America is not just pulling ahead of the rest of the world, it's running
circles around it.

I hate to be the bearer of good news, but America, for all its flaws, is still
the envy of the world. Its fastest-growing, most innovative tech companies and
its most prestigious institutions of higher learning, such as the Ivy League,
Caltech and MIT, are inundated with applicants from foreigners. Foreigners
also can’t get enough of America’s most expensive real estate, nor can they
get enough of America’s low yielding debt. If we really were in a ‘post
America’ era as the left insists we are, none of this would be happening.

The US economy has hardly been in a slog, especially compared to the rest of
the world. The last quarter of GDP was revised to 5% – the fastest growth
since 2003.

~~~
olalonde
> US GDP growth has exceeded nearly all counties, including emerging markets
> (adjusted for inflation).

Do you have a source for that? According to Wikipedia, the US ranked 151st for
year 2013. Did they make such a huge jump in ranking in 2014?
[http://en.wikipedia.org/wiki/List_of_countries_by_real_GDP_g...](http://en.wikipedia.org/wiki/List_of_countries_by_real_GDP_growth_rate)

~~~
tiatia
The US likes to fake the statistics and often revises them down later.

The US might have REAL GDP growth. It's population grows about 1% per year.
How much more GDP above this 1% does the US really have?

This being said. How do you measure GDP growth? In money? Your would have to
subtract inflation. How do you measure inflation? Increase in money supply?

Would be interesting to see the GDP growth based on energy consumption:
[http://www.declineoftheempire.com/2012/01/wealth-and-
energy-...](http://www.declineoftheempire.com/2012/01/wealth-and-energy-
consumption-are-inseparable.html)

Maybe someone has the statistics for the last 100 or at least last 20 years.

~~~
tiatia
Here is a graph, unfortunately not cumulative, which would it make easier to
read: [http://ncusar.org/blog/wp-
content/uploads/2012/10/US_energy_...](http://ncusar.org/blog/wp-
content/uploads/2012/10/US_energy_consumption.png)

Solid economic growth in the 70ies, then a big dip around 1980, a smaller
around 1988, then solid growth in the 90ies until around 2004. Then decline. I
would trust this model much more than any government announced GDP growth.

Reminds a little bit to Sow jet Russia. They had a tractor manufacturing plant
with state given output increases they had to match. They were not able to
fulfill the quota but since output (like many other things) were measured in
"tons of tractors produced" the solution to the problem was easy. While they
did not produce more tractors, the tractors became heavier and heavier every
year...

~~~
rgbrenner
If that graph was cumulative, it would appear much flatter. Here are the
actual numbers:
[http://www.eia.gov/totalenergy/data/monthly/pdf/sec1_3.pdf](http://www.eia.gov/totalenergy/data/monthly/pdf/sec1_3.pdf)

Decline after 2004? sure.. it went from 100 quadrillion Btu to 97 in 2013.

~~~
tiatia
Yes. While the population was growing 1% per year. Both numbers combined speak
a very different language. ;-)

------
lotsofmangos
This makes me think of the economic prediction from the start of Snow Crash:

 _Why is the Deliverator so equipped? Because people rely on him. He is a role
model. This is America. People do whatever the fuck they feel like doing, you
got a problem with that? Because they have a right to. And because they have
guns and no one can fucking stop them._

 _As a result, this country has one of the worst economies in the world. When
it gets down to it — talking trade balances here — once we 've brain-drained
all our technology into other countries, once things have evened out, they're
making cars in Bolivia and microwave ovens in Tadzhikistan and selling them
here — once our edge in natural resources has been made irrelevant by giant
Hong Kong ships and dirigibles that can ship North Dakota all the way to New
Zealand for a nickel — once the Invisible Hand has taken all those historical
inequities and smeared them out into a broad global layer of what a Pakistani
brickmaker would consider to be prosperity — you know what? There's only four
things we do better than anyone else:_

 _music_

 _movies_

 _microcode (software)_

 _high-speed pizza delivery_

I especially like his use of the Invisible Hand in that. Of course these days
(courtesy of Sterling), it is the Invisible Crazy Robot Hand -
[http://www.wired.com/2010/05/the-invisible-crazy-robot-
hand/](http://www.wired.com/2010/05/the-invisible-crazy-robot-hand/)

------
known
Since 1971 OPEC Oil is exclusively sold in US dollars.

[https://en.wikipedia.org/wiki/Petrocurrency#Currencies_used_...](https://en.wikipedia.org/wiki/Petrocurrency#Currencies_used_to_trade_oil)

[http://en.wikipedia.org/wiki/File:Oil_Balance.png](http://en.wikipedia.org/wiki/File:Oil_Balance.png)

------
lifeisstillgood
> America was a byword for urban graft, mismanagement and greed-fuelled
> politics, as much as for growth, production, and profit,”

Given my laypersons knowledge of Tammeney Hall, the early 20th century labour
gangs and so on, it seems incredible that America is not subject to more such
problems - but what did it do right - and is it still doing it right?

~~~
Alex3917
Science has largely eliminated the perception of graft in the US. Most graft
here takes the form of corporations and the government colluding to create
fake scientific studies and white papers in order to justify giving massive
amounts of public money to private individuals for no especially good reason,
as well as passing laws to do the same.

------
coding4all
Free labor from African, Asian, and Native American slavery.

~~~
virmundi
Not really. The African labor was loosing its luster when compared to the
North. Slave labor wasn't cost efficient. Asians provided little slave labor
to the US. It provided cheap, expendable labor to the US; but so did poor
whites at the time. Native Americans were never useful laborers to the whites.
We ended up confining them to the shittiest parts of our territory at the
time. Then we'd move them to shittier parts later.

~~~
unclebucknasty
> _Slave labor wasn 't cost efficient._

Huh? Compared to what, paid labor?

