Globalist Bookshelf

The Unique Advantage of the United States

What particular factors account for the United States’ competitive advantage?

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Takeaways


  • In 2006, the United States spent about $570 billion on defense, or roughly as much as the rest of the world combined.
  • There are no credible alternatives anywhere in the world to America's basic take on the limits of the government's role in the economy and how businesses should run.
  • What's so unusual and world-changing is not the extent of America's military, political and economic capacities — but the absence of countries that come anywhere close.
  • America's historically anomalous position as a sole superpower will fundamentally shape a new geopolitics for at least the next generation.
  • Much of the world now embraces the United States' basic approach to organizing economies and doing business.

America’s global military power is so commonplace that it’s easy to overlook how historically unique it is. What’s so unusual and world-changing is not the extent of America’s military, political and economic capacities — but the absence of countries that come anywhere close.

America’s historically anomalous position as a sole superpower with no near peer ended the balance-of-power geopolitics that organized much of world affairs for more than a thousand years — and will fundamentally shape a new geopolitics for at least the next generation.

The United States also derives geopolitical power from its singular capacity to develop new technologies and other valuable intellectual property in large volumes, especially in the software and Internet areas that drive so much economic change and the processes of globalization itself.

Other countries now lead in producing and improving the basic manufactures that American companies dominated a few generations ago — steel, consumer electronics, automobiles — and much more.

This capacity enhances America’s global position not because it increases the profits that U.S. companies earn on their foreign sales. Much more far-reaching, it subtly aligns the economic paths of other countries with the United States and — whether or not they like it — makes them a little more like America.

The Internet’s software infrastructure developed in a typically American way — by entrepreneurs working in areas largely untouched by government regulation — into a radically open and decentralized system.

As a result, the Internet has become essentially “American” wherever it is, and not just because U.S. companies dominate its development and content.

Much more than that, it creates American-style opportunities wherever it reaches, disseminating information without restriction and spurring the development of new services and products by newly formed companies operating in new ways.

That can produce geopolitical benefits for America, as tens or hundreds of thousands of newly successful people around the world associate their success with its continuing technological achievements.

The heart of the geopolitical clout that America derives from its economic preeminence, however, is that so much of the world now embraces its basic approach to organizing their economies and doing business. In less than a generation, the alternative models that much of the world had followed for decades have been discredited — and largely discarded.

This reaches past the epochal collapse of Soviet collectivism and China’s startling conversion to capitalism. The appeal of the more mixed models of a private economy with heavy government direction also has waned, after Asia’s bumper economies melted down or stagnated and Europe’s entered a decade of disappointing growth.

Some leaders in Europe and Japan may deny it, but for the first time there are no credible, grand alternatives anywhere in the world to America’s basic take on the limits of the government’s role in the economy and how businesses should run.

This doesn’t make the American economic approach “right” in an objective sense, like the composition of the atom. Rather, it’s very broadly preferred right now, because it’s in sync with the current demands of globalization.

For a long time, the European and Japanese approaches — not to mention what passed for an economic model in the Soviet Union, Eastern Europe and China — produced more equality and economic security for individuals than American-style capitalism.

But for nearly a generation, globalization has crippled the capacity of those approaches to generate strong, sustained growth — and greater equality and security are less appealing when people also face a prospect of growing poorer.

This simply is a time when growth in both advanced and developing economies depends on governments not only stepping up to invest in education, health and modern infrastructure, but also stepping back from protections and regulations that slow or muck up the era’s massive transfers of technologies, capital and expertise.

Almost every country also now supports the international institutions that enforce American-style rules of globalization, especially the World Trade Organization and World Intellectual Property Organization — but also the older International Monetary Fund, World Bank and Paris Club (which deals with sovereign debt default issues among countries).

The core business of geopolitics is national security — and the other critical geopolitical fact about U.S. economic dominance is that it will indefinitely finance America’s position as the world’s sole military superpower. In 2006, the United States spent about $570 billion on defense, or roughly as much as the rest of the world combined.

This asymmetry in military spending is also historically unprecedented. In fact, the U.S. military spends more on research and development into new defense systems — some $73 billion in 2007 — than the entire defense budgets of every other country except China.

All this spending has bought the United States its remarkable military dominance as the first military superpower in more than a millennium with no near peer in sight. Other nations have armies, air forces and navies capable of protecting their borders from just about anyone else.

With some considerable lead time, a few of them could send their soldiers, sailors and pilots to fight in other countries in their own regions.

But the United States alone has a blue-water navy capable of operating in and across the world’s vast oceans — and a blue-sky air force that with little notice can project forces any where from U.S. bases and those around the world. When they arrive, they wield technologies at least two generations more advanced than anyone else’s, including China, Britain and Russia.

These forces can prevent others from using their own militaries beyond their own borders and — as Saddam Hussein learned — no government can survive for long against their serious assault.

Geography reinforces America’s awesome military advantages. The United States is the only country with thousands of miles of ocean separating it from anyone else with an army, navy or air force to speak of. And the oceans and the air space above them and above every other country are part of America’s military territory, since only its navy and air force can roam them freely.

Most wars begin in conflicts that in some way arise out of geographical proximity — and even today, the proximity of Russia, China and India, for example, will make it harder for them to work together to balance America’s military advantages.

Editor’s Note: This feature is adapted from “Futurecast: How Superpowers, Populations and Globalization Will Change the Way You Live and Work” by Robert J. Shapiro. Copyright 2008. Published by St. Martin’s Press. Reprinted with the permission of the publisher.

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About Robert J. Shapiro

Robert J. Shapiro is co-founder and chairman of Sonecon, LLC.

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