by WiredCoffeeJunkie on Mon Mar 27, 2006 3:24 pm
The United States after WWII stabilized the world's economies, specifically monetary policies. It also created the World Trade Organization to ensure rules were followed and enforced regarding "dumping", trade restrictions and tariffs etc. These rules apply to the United States as well as anyone else who wishes to have the protection of a governing body looking out for fair practices. When the United States has an economic cold the rest of the world has the flu. When the United States protects trade the rest of the world can trade knowing they can gain comparative advantage in the United States and other markets. This is not only recognized by the WTO, it's a major part of the world's economic welfare. The US dollar remains the standard used in trade for most products and underpins many of the world's economies through treasury bills. China is a good example, they entered the WTO and immediately bought huge sums of US treasury bills. China didn't do this because they wanted to be fair, they did it because it was the best way to stabilize their economy.
It's also why the United States has such sizable trade and budget deficits. The United States might be unloved, but it's the monetary hegomony that keeps trade going and prevents world economic collapses. The Euro serves exactly the same purpose in a smaller region, but it hasn't the economic power to serve a larger area yet.
The United States controls 52% of the worlds capital. It's hardly surprising that most people have eaten at McDonald's or drunk a Pepsi. In fact the world would be a much less "enjoyable" place if the United States stopped exporting capital, medicines, computers, and movies and importing cell phones, steel, or using call centres.
