Comparing the GDP of the US to it’s closest competitor, China, provides somewhat surprising results.
US statistics: United States - Wolfram|Alpha
China statistics: China - Wolfram|Alpha
This got me asking myself, why is the US so wealthy?
I stumbled upon this same question in yahoo answers, but was dissatisfied with the response provided. So, is there some empirical basis to suggest why the US developed into such a wealthy nation compared to other industrialized countries?
Slave labor (which later became extremely low-cost near-slave labor after slavery was outlawed) has sure helped.
I know this may come across as a snarky response but it’s meant as an honest and factual response- if someone can prove that our chronic exploitation of extremely cheap-to-free labor has not contributed significantly to our wealth as a nation then by all means go ahead. Of course much of our national debt is to these cheap labor countries - and it sure doesn’t seem like we have any intention of ever repaying most of it. So in a way, slavery lives on.
I’d say the answer to the question is going to be in the form of a debate, since I doubt there is a precise answer to it. I just wanted to post this link, since it graphically shows the GDP difference between the US and China pretty well…plus it’s a lot of fun to play with.
I’ll leave it to others to figure out if this question can be answered in terms of GQ.
-XT
One major factor is world war 2.
We were in a unique position after world war 2 to export massive amounts of produced goods and foodstuffs where many nations were not. The debts, which the US exploited in order to form profitable export/import agreements (by exploiting the relationship, not the debts themselves), and other factors, most of which can be traced to the fact that ww2 exploded our industrial base and left us largely untouched, coupled with massive amounts of natural resources (way, way more per capital than other nations iirc).
That’s a really neat graph, thanks for contributing!
China is not an industrialized country, so it really doesn’t make sense to compare the US and China. Better to compare the US and Britain or Germany.
Most of our vast store of accumulated wealth has come about as an accident of geography. Natural resources that we exploited very successfully and rather ruthlessly. The USA was developed later than much of the rest of the world. A vast land mass in a temporate region with a relatively small human population (in terms of density). Water, forests, minerals, productive cropland; for about 150 years we mined, farmed, logged, developed with no thought for sustainability. The basic premise was "go in, get as much as you can before the next person does.
There is still a lot there, but there is an ever-increasing population of consumers, all competing for a dwindling store of resources.
SS
The US compared to the UK, France and Germany (I tossed in Japan too just for kicks).
I could write a book with a long and detailed analysis with hundreds if not thousands of points to debate or we can just skip to the one page Cliff Notes.
I need to eat dinner so let’s go for the latter.
The U.S. has massive amounts of land much of which is still sparsely populated.
The U.S. has incredible amounts of natural resources on its own soil.
The U.S. Constitution is set up to ensure that individuals can move in and take advantage of #1 and #2 to the best of their ability.
That is 80% of the answer. The other 20% take up the other few thousand pages of analysis but the the natural resources and space are a Garden of Eden for a superpower to be built as long as people are allowed to move in and exploit it for their benefit and the good of the country.
As opposed to China?:eek:
same goes for downunder as well.
(1) The US is the biggest country with an open and free market. That means we get economies of scale that Germany, France, et al don’t get. It’s true that those countries are in the EU, but they still have language and cultural barriers. It’s a very small change from, say, New York to Georgia compared from France to Germany.
(2) The US infrastructure is ahead of most other countries. The highway and railroad network makes shipping goods cheaper than anywhere else, and encourages trade.
(3) The US university system is unrivaled by any country in quality and size. This leads to a huge amount of innovation, which leads to very high margins. Other countries do research, but most of the big game changing inventions of the last few decades have come out of the U.S.
(4) Relatively low taxes, labor controls, and government regulation. You can argue about the social impact, but there is no doubt that these three things contribute greatly to GDP size.
(5) Natural resources. The US has an ass load of coal, iron, natural gas, farm land, and a bunch of other resources. Farm land is something we really have much more of than any other country. This category is less important as we are moving into much more of a service economy, but it is still important. A lot of things, especially food, is just much cheaper here than elsewhere.
SeldomSeen and Shagnasty have iterated the major reasons: Lots of resources and good incentive from the Constitution. There are a number of other factors, which historians have gone over, including the Puritan work ethic.
Jefferson’s belief in the future of the country, and the Louisana Purchase.
WWII, as mentioned by Todderbob is in there, but it would be more accurate to say that winning almost every war we ever fought is higher on the list. If there was no Spanish-American war, no American southwest.
The claim that slavery was in any way responsible is highly debated. It may be even be that slavery slowed America’s growth. Slaves weren’t as “cost free” as they seemed, and certainly the American Civil War was no bargain, in the overall picture.
Which is hardly unique to the US. Keep in mind that even into the 19th century, people were flocking to the US from Europe in order to avoid starvation in their native countries.
Rule of Law
Natural Resources
Education
Legal Structure amenable to the creation of Wealth
Culture amenable to the creation of Wealth
Transportation Infrastructure
I’d like to take your hypothesis as a jumping-off point for a bit of analysis…
Now of course, the hard part of deciding a factual answer to this OP is that, like many questions in the social sciences and economics, we cannot run experiments to test certain hypotheses and therefore proving anything is close to impossible. However we can certainly offer up evidence on either side to make a given hypothesis either more, or less, likely. So, with that analysis framework in mind:
You outlined three conditions. Let us examine those:
Land (especially sparsely populated). First thing of course is that China and the US have nearly the same land mass - the US has about 1% more land than China. So pure size alone does not seem to be a major driver of national wealth difference between the US and China. Second, if the hypothesis includes population density it must account for the many large countries with far less population density than the US (Canada, Brazil, Russia, Australia) which are also not nearly as wealthy.
Natural resources. China has many natural resources but the U.S. may or may not have more - depending what you mean. For example China is the 5th largest producer of crude oil in the world while the US is third (3.725 million barrels per day in 2008 compared to 8,457,000 bbl/day in the US). However in natural gas, the US lags China by about 57B cu ft / day to China’s 69B cu ft / day. Other natural resources vary as well - hydro power, coal, various commodities and metals, etc. So it’s close to a draw here unless your argument rests on specific resouces in which case it should be further clarified and analysed.
Freedom to immigrate. It seems to me that this point would counteract the first. After all if the US experienced massive immigration (of say the entire western hemispher, plus a good chunk of Europe), it would look like, well. China. That is, viewed from outer space, China is just the US with the same land mass but about 4.3x the population. So, to the extent that having a bunch of people drives this national wealth disparity it would seem to go the other way.
So, clearly I don’t have the answer. But it seems the answer proferred above lacks analytical or explanatory value and we would be well served continuing to hypothesize.
Those countries may be as big or bigger than the US, but vast swaths of those countries are essentially worthless for human habitation. China has a huge desert in the middle of their country, and Tibet isn’t all that great either. Most of Russia is in Siberia, and is basically a winter wasteland. Brazil has a huge undeveloped jungle in the middle of their country. Canada is like Russia in that much of hte land is much too cold for humans. Australia has a big desert and lacks the water resources to take advantage of it’s land.
The U.S. is huge, and excepting some of the Southwest, almost all of it is useful for farming or otherwise.
That sure is quite a striking graph. But I must confess, I’m not certain why you chose the log of per capita GDP for your x-axis and total GDP for your y-axis. Such a graph would seem only to document a nation’s population growth.
Here is a graph with time on the x-axis and per capita GDP on the y-axis, both using a linear scale. I think you’ll agree that it paints a rather different picture.
I guess I’m confused. Population growth is what that is showing? I thought it was showing total (adjusted) GDP vs personal income per person. How is that showing population growth?? And why would US population growth be so much greater than China’s??
It does, but I’m at a loss to see what it’s telling me, to be honest. Could you explain what your graph is demonstrating and how it’s important?
-XT
I can’t see that being part of the difference, here. Most poorer countries than the United States likewise exploited slave labor and extremely cheap labor, and many of them continue to do so. (Read about slave-labor factories they discover all the time in China that only really get shut down because it makes the press and embarrasses the government.)
Likewise, most rich countries also exploited either slave labor or nearly-slave labor. The condition of the working class in 19th century England, France, and Germany was extremely bad, there’s a reason socialism was such a strong force in Europe.