Rise and Fall of the US Dominance on the World Economic Order

US Dominanace still looms on World Economy

Uncle Sam has been the major decision maker in the political scene in the 20th Century, the title once held by England in the 19th century. Past its great depression and Two World War, US have wielded its influence throughout the course. With over $12 trillion dollars of Economic Product produced by 300 Million Population, as against India producing mere $1.4 Trillion with the help of a population of nearly 1.3 Billion. US have been at the forefront in the field of productivity. Post World War II, US economy expanded its dominance in the manufacturing with the help of the huge capacity added during the war for the military purpose. US started its dominance in the service sector especially in the financial services by hiring fresh graduates from the ivy leagues and training them to trade in exotic financial derivatives. In order to expand its presence in the rest of the world and let its mammoth big corporation to seize opportunities in the emerging market and lesser developed countries it started preaching the concept of globalization and opening up their economy (titled as reforms in economics parlance).It used then started organizations IMF and World Bank, whose Leader are carefully handpicked by US and Europe jointly to started to preach the idea of capitalism to developing countries. Developing countries still skeptical about the undertaking reforms were hesitant to listen to these door banger. The developing countries were mostly run more in a Authoritarian manner and corruption largely loomed in their belly. These world institution offered a carrot to these leaders by way of interest free loans instead received commitment to undertake reforms in their countries. But what did US gained by giving interest free loans? They got accessed to burgeoning market to sell their US producing goods and build a strong base. But what happened instead they entered the country in a more powerful manner by way of financial markets. The case in point to take India, The largest recipient of FII money (hot money) in India is from not US but from Mauritius. Mauritius knows as a tax haven (these islands are known for their confidential of information and as well no tax status). If you look at the ownership of these shell companies they mostly dominated by US. Now who could be second largest FII investor in India? Right USA. These investments were possible if India hadn’t gone thru the crisis of 1991 where they have to pledge their gold to IMF for funds. The underlying assumptions for these funds were reforms which we have seen in the last 15 years.

To go back on our point, sensing the huge power gained thru financial investments, US shifted its focus from manufacturing to service industry mainly in auditing and financial services. Slowly the profile of companies coming to ivy leagues shifted from manufacturing dominated to glamorous investment banks giving million dollars packages. The law of opportunity cost comes in picture since large amount of resources were diverted from manufacturing to service. How do you cater to the huge demand for US goods from domestic as well as internationally. It looked at the eastern side of the globe, especially Asia. Asia has been known to be over populated holding more than 50% of the world population. China having a population of over 1.6 billion was finding it difficult to give its citizens two squares and running a communist political system where the power is contained in few hands. US approached China, still struggling from its communist regime in the last 70’s. it told them to take reforms instead promised them huge investment in their countries mainly in factories. Thus US were able to outsource most of its labor intensive industries to China and then exported back them to US and other developing countries. Then huge amount of US companies flocked with their technology and money to build huge advanced factories and used cheap Chinese labor to produce world class goods. You might have known that by now, that more than half the product we use nowadays has a price tag dangling with it saying MADE IN CHINA. With this development, China benefited immensely and used its economic prosperity to fund its mega infrastructure inspired by its Uncle Sam infrastructure. Last year, China bestowed the title of the largest road network in the world once held by its mentor US.

If we look at the Profile of patents ownership, US dominate the list again. US are the largest holder of patents and trademarks in the world having developed a strong property rights and attracting the best talent in the world with its prosperity. One of the largest sources of income for US is has been royalty income from these patents. It was able to charge a large royalty income from the product coming out of those Chinese factories to be sold to the world while the executives were sitting in the plush offices in the Manhattan skyscrapers. US labeled it as Globalization Phenomena.

Chinese were hardworking but not intelligent, they were good at able to replicate the world class goods cheapest but were not good with Technology and Math’s. India being the founder of numerology and little know facts that it invented the most important number zero. India having good arithmetic in our genes, was already churning out the largest number of engineers and scientist in the world. The invasion of British Empires in the late eighties left us in ruins when they left in 1950’s ripping us apart us of all the resources we had but could not take their language with them- English. Gifted with Intelligent and fluent English speaking population. US shifted its back office operation to India. Analyzing the revenue breakup geographically the Top four software companies in our country, there major revenue comes from the US acting as a captive back office to the US corporations.

India and China became the Back office and factories to the World. US Inc. benefited from expanded operating margin and increased royalty income and reduced administration expenses, it boosted record profits to the American Shareholders.

 

[Dhruv Bindhani]

US Dominanace still looms on World Economy

Uncle Sam has been the major decision maker in the political scene in the 20th Century, the title once held by England in the 19th century. Past its great depression and Two World War, US have wielded its influence throughout the course. With over $12 trillion dollars of Economic Product produced by 300 Million Population, as against India producing mere $1.4 Trillion with the help of a population of nearly 1.3 Billion. US have been at the forefront in the field of productivity. Post World War II, US economy expanded its dominance in the manufacturing with the help of the huge capacity added during the war for the military purpose. US started its dominance in the service sector especially in the financial services by hiring fresh graduates from the ivy leagues and training them to trade in exotic financial derivatives. In order to expand its presence in the rest of the world and let its mammoth big corporation to seize opportunities in the emerging market and lesser developed countries it started preaching the concept of globalization and opening up their economy (titled as reforms in economics parlance).It used then started organizations IMF and World Bank, whose Leader are carefully handpicked by US and Europe jointly to started to preach the idea of capitalism to developing countries. Developing countries still skeptical about the undertaking reforms were hesitant to listen to these door banger. The developing countries were mostly run more in a Authoritarian manner and corruption largely loomed in their belly. These world institution offered a carrot to these leaders by way of interest free loans instead received commitment to undertake reforms in their countries. But what did US gained by giving interest free loans? They got accessed to burgeoning market to sell their US producing goods and build a strong base. But what happened instead they entered the country in a more powerful manner by way of financial markets. The case in point to take India, The largest recipient of FII money (hot money) in India is from not US but from Mauritius. Mauritius knows as a tax haven (these islands are known for their confidential of information and as well no tax status). If you look at the ownership of these shell companies they mostly dominated by US. Now who could be second largest FII investor in India? Right USA. These investments were possible if India hadn’t gone thru the crisis of 1991 where they have to pledge their gold to IMF for funds. The underlying assumptions for these funds were reforms which we have seen in the last 15 years.

To go back on our point, sensing the huge power gained thru financial investments, US shifted its focus from manufacturing to service industry mainly in auditing and financial services. Slowly the profile of companies coming to ivy leagues shifted from manufacturing dominated to glamorous investment banks giving million dollars packages. The law of opportunity cost comes in picture since large amount of resources were diverted from manufacturing to service. How do you cater to the huge demand for US goods from domestic as well as internationally. It looked at the eastern side of the globe, especially Asia. Asia has been known to be over populated holding more than 50% of the world population. China having a population of over 1.6 billion was finding it difficult to give its citizens two squares and running a communist political system where the power is contained in few hands. US approached China, still struggling from its communist regime in the last 70’s. it told them to take reforms instead promised them huge investment in their countries mainly in factories. Thus US were able to outsource most of its labor intensive industries to China and then exported back them to US and other developing countries. Then huge amount of US companies flocked with their technology and money to build huge advanced factories and used cheap Chinese labor to produce world class goods. You might have known that by now, that more than half the product we use nowadays has a price tag dangling with it saying MADE IN CHINA. With this development, China benefited immensely and used its economic prosperity to fund its mega infrastructure inspired by its Uncle Sam infrastructure. Last year, China bestowed the title of the largest road network in the world once held by its mentor US.

If we look at the Profile of patents ownership, US dominate the list again. US are the largest holder of patents and trademarks in the world having developed a strong property rights and attracting the best talent in the world with its prosperity. One of the largest sources of income for US is has been royalty income from these patents. It was able to charge a large royalty income from the product coming out of those Chinese factories to be sold to the world while the executives were sitting in the plush offices in the Manhattan skyscrapers. US labeled it as Globalization Phenomena.

Chinese were hardworking but not intelligent, they were good at able to replicate the world class goods cheapest but were not good with Technology and Math’s. India being the founder of numerology and little know facts that it invented the most important number zero. India having good arithmetic in our genes, was already churning out the largest number of engineers and scientist in the world. The invasion of British Empires in the late eighties left us in ruins when they left in 1950’s ripping us apart us of all the resources we had but could not take their language with them- English. Gifted with Intelligent and fluent English speaking population. US shifted its back office operation to India. Analyzing the revenue breakup geographically the Top four software companies in our country, there major revenue comes from the US acting as a captive back office to the US corporations.

India and China became the Back office and factories to the World. US Inc. benefited from expanded operating margin and increased royalty income and reduced administration expenses, it boosted record profits to the American Shareholders.

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[Monishkavedi]

Thank you for sharing such a detailed and eye-opening explanation. As someone still learning about global politics and economics, this really helped me understand how the USA grew to become such a powerful country in the 20th century. Your writing gave a clear picture of how the U.S. moved from manufacturing dominance to becoming a financial and intellectual superpower, and how it used institutions like the IMF and World Bank to influence developing countries such as India.





It was interesting to read how the U.S. shifted its economic model after World War II, using its wartime manufacturing base to dominate global production. Later, the country moved toward financial services, training Ivy League graduates to trade complex financial instruments, which made Wall Street the center of global finance. This shift from physical goods to financial power really stood out to me.





I was also fascinated by how the U.S. promoted globalization not just as an economic strategy, but also as a way to enter emerging markets. The role of Mauritius as a tax haven and how shell companies are linked back to U.S. investors was something I had never known before. It’s shocking but insightful to realize how money moves across the world through such routes.





Today, the U.S. remains a global leader, especially in technology, innovation, and intellectual property. It still holds the majority of patents and generates massive royalty incomes, showing how powerful “ideas” can be compared to “products.” But the world is changing fast. Countries like China have become global manufacturing giants, and India is now a major player in tech and services. As your article explained, India and China have become the world’s back office and factories.





Looking at the present, the U.S. faces many challenges like rising global competition, inflation, political polarization, and growing dependence on outsourcing. Yet it also has great strengths — world-class universities, strong legal systems, and the ability to attract global talent. The balance of power may be shifting, but the U.S. still has a strong foundation.