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10-08-2015, 23:35

The United States: Capitalism Ascendant

In some respects, the United States fared better than other capitalist states as the economic revival that took place in the 1990s enabled the Clinton administration to reduce budget deficits without having to engage in substantial tax increases or a massive reduction in welfare spending. Even there, however, continued increases in social spending provoked the passage of new legislation to reduce welfare and health care benefits. Nor has the steady growth in the gross domestic product led to increased prosperity for all Americans. Although the rich have been getting richer, the poorest 20 percent of the population has so far seen little benefit. The lack of sustained growth in consumer demand may be a major reason for the economic slowdown that began to appear early in the new century and has brought unemployment levels to the highest rate in recent years. The United States has not yet witnessed the emergence of significant antiforeign sentiment on the scale of some countries in Europe, perhaps partly because of the salutary effect of a steadily growing economy. Recent history suggests that tolerance toward immigrants tends to decrease during periods of economic malaise, and vice versa. But there are indications that anger against the growing presence of foreign-born residents—especially those who have arrived illegally—is growing. Legislation to limit social benefits to noncitizens and to expel illegal aliens has been proposed at the state level and has been debated in Congress. Many American workers, with the support of labor unions, have vocally opposed the enactment of trade agreements such as the North American Free Trade Association (NAFTA) that would allegedly lead to a flight of jobs overseas as U.S. corporations seek to reduce production costs by hiring cheaper labor. Opponents of globalization have become increasingly vocal, leading to violent protest demonstrations at meetings of the World Trade Organization, the World Bank, and the International Monetary Fund. Yet as in the case of European unity, there is solid economic logic in pursuing the goal of increasing globalization of trade. The U.S. industrial machine is increasingly dependent on the importation of raw materials from abroad, and corporate profits are to a rising degree a consequence of sales of U.S. goods in overseas markets. Although foreign competition can sometimes lead to a loss of jobs—or entire industries—in the United States, the overall effect is likely to be a growing market for U.S. goods in the international marketplace. Moreover, as the case of the automobile industry has demonstrated, increased competition is crucial for maintaining and enhancing the quality of American products. President George W. Bush, who came into office in January 2001, has voiced his support for the creation of a global free trade zone incorporating all the nations of the Western Hemisphere. It is hardly surprising that the main proponent of the global economic marketplace is the United States, a country well placed to take full advantage of the technological revolution and turn it to its own advantage. Its large market relatively unfettered by onerous government regulations, generous amounts of capital, a tradition of political stability, and an outstanding system of higher education all combine to give the United States an edge over most of its rivals in the relentless drive to achieve a dominant position in the world economy. As Washington applies pressure on other governments to open up their economies to the competition of the international marketplace and to adopt concepts of human rights that accord with those in the United States, resentment of the U.S. behemoth and fears of U.S. global domination are once again on the rise, as they were during the immediate postwar era.

 

 

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