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The United States is a superpower. USA #1, right? In the old world there were two superpowers. The Soviet Union (USSR) was the other world power. We know today that the Soviet Union wasn't a real superpower because it lacked the economy to fund its military. It didn't have a juicy GDP per capita.


 
Home / Economics  /
Is It Worth It Being A Superpower?
United States superpower

Wielding a lot of muscle doesn't come cheap


While researching data on who would win a war between Canada and Australia, I came across some head turning  facts.  In 2009, the United States spent $661bn on military expenditures, the highest in the world and 43% of the world total.  That figure surpasses what the next fourteen nations (China, France, United Kingdom, Russia, Japan, Germany, Saudi Arabia, India, Italy, Brazil, South Korea, Canada, Australia, and Spain in that order) spend combined.   

Three of those fourteen are best friends with the United States, six are good friends, and three more are friends the U.S would have over to dinner once a month.  The two nuclear acquaintances on that list, Russia and China, can't even be called a serious military threat.   In a non-nuclear conflict, China and Russia would be no match for the United States.  We won't bother discussing a nuclear war.  No nation with some sort of real economy would have anything to gain using nuclear weapons.  There is no victory with mutual destruction assured on both sides.  

The United States spends more, as a percentage of GDP (4.3%), than most other nations.  China outlays just 2%, Russia 3.5%.  Spending a large percentage of one's gross domestic product does not turn one into a military superpower.  Saudi Arabia spends 8.2%, Israel 7%, and Eritrea a whopping 21%.  None of those countries are superpowers.  To have a chance at becoming a superpower, a country needs to have a sizeable GDP to begin with.  That rules out countries with tiny populations like Singapore, Israel, and Norway.

On top of a hefty GDP, a notable real world prerequisite is a GDP per capita, adjusted for purchasing power parity, in the world's top 20.  GDP per capita is a misleading figure to determine average citizen wealth in countries which have little wealth redistribution, as I discuss comparing the standard of livings in the United States and Australia.  But it is a reliable enough gauge to classify nations as developed, developing, or third world.   Logically, a developing or third world nation cannot be a superpower.  Whether you use figures from the International Monetary Fund, the World Bank, or the CIA World Factbook, the United States scores in the top 10 for GDP per capita.   By these measures, we know the former Soviet Union was never a real superpower.  In 1990, the last full year the Soviet Union existed, it had a GDP per capita (adjusted for purchasing power) of $9,130.  The United States' figure that year was $23,060.  The Soviet's superpower status was illusory.  The country never had the second largest economy in the world the textbooks told us it did.  When the USSR collapsed, this fact was evident to all. 

Besides economic and military might, a superpower must be able to project its influence abroad almost effortlesslyThe Soviet Union was never able to do this.  They had military alliances with other Iron Curtain nations, but these alliances were forced into place by the Soviet government.  Forcing influence down other nations' throats only works in the short run.  The peoples of Czechoslovakia, Hungary, Poland, Estonia, etc. were never behind these alliances.  When the Soviet Union dissolved, all of these former Warsaw Pact countries ran in the opposite direction.

The United States is in another league.  It doesn't force other nations to learn its language, as the Soviet Union forced its "allies" to learn Russian.  The U.S. doesn't pressure the world to listen to its pop songs, watch its movies, and eat its high cholesterol/high fat fast foods.  The world's citizenry want to.   The U.S. doesn't point a gun to country's heads and command them to join longstanding U.S.-dominated military alliances.  Those who were victims of aggression in the past are happy to join hands with the U.S.  This is why China, Japan, Russia, India, or Brazil can never become true superpowers like the U.S. is now.  Even if all of them accumulated phenomenal wealth and military might, none of them have easily mass exportable cultures.  We've already seen that wealth (Norway) and military power alone (Soviet Union, Nazi Germany) don't make a superpower.  Other nations must both fear and genuinely admire a superpower.  Of their own accord, nations must want to be buddies and partners with the superpower. 

Being a superpower has great benefits for the American government.  As the largest economy in the world, with individual American states producing as much as entire nations and American regions equivalent to the Chinese, Japanese, German, and British economies, the United States' dollar has become the world's only reserve currency.  This makes it (too) easy for the U.S. government to borrow money at lower interest rates -- even at negative interest rates if the U.S. government winds up devaluing the dollar further -- than would otherwise be possible.  A smaller economy would find itself more at the mercy of international banking institutions. 

United States gross state product
Entire country's economies fit into individual U.S. states

Superpower status confers the U.S. the clout to setup military bases around the world, from Bulgaria and Germany in Europe to Kyrgyzstan, Turkey, South Korea, and Japan in Asia.  In some of these countries, like Korea, the local government bears the lion's share of expenses.   These are not military partnerships, but more like uneven trades, with the understanding that if a smaller U.S. friendly nation wants U.S. military support, it had better accommodate the U.S. as the American government sees fit.   The more a country desires a U.S. military presence, the less the U.S. government has to give up to obtain or setup a base. 

But as far as the American people are concerned, funding superpower status is like an additional tax for which they derive no exclusive benefit.   The huge U.S. expenditures on defense allow any nation firmly underneath the U.S. security umbrella to coast.   In Survival Of The Unfittest, I chronicled how little Australia and Canada spend on the military.  Well, they're not alone.  Within NATO, excepting the UK, France, Greece, and Poland, all of whom spend between 2.0  and 2.5% of GDP on defense, every other member spends less than 2%.  Ditto for ANZUS.  New Zealand coughs up 1.1% and Australia 1.8%.  Ireland's and Japan's military budget is less than 1% of GDP.   This is classic free rider economics.  There's no incentive for any one nation in the alliance to put up its 'fair' share for defense when they know Uncle Sam has their backs.  It's as if global defense has been outsourced to the United States for practically no cost, an unbelievable deal for those not paying. 

If the United States were viciously attacked by a foreign power, American allies, bound by treaties stating an attack on one is an attack on all, would be obligated to send troops.  Would the United States need them?  It's hard to fathom a situation where Holland, Australia, Spain, or Ireland sending a few hundred or few thousand troops each would alter any outcome.  On the other hand, if Holland, Australia, Spain, or Ireland were attacked, U.S. involvement could well mean the difference between victory and defeat.

Remember the wars in Iraq?  Yeah, we all know by now it wasn't about promoting democracy, but about securing supplies of oil in one of the most oil-rich regions in the world.  In the 1991 Gulf War outing, the U.S. contributed between 575,000 and 697,000 troops.  Of America's mainstream buddies, the UK sent 45,000 and France 18,000 to the Coalition of the "Willing."   After them, the freeloading becomes shockingly apparent.   Canada sent 4,500, Italy 1,200, Australia 700, Holland 700, Sweden 525, Denmark 100, New Zealand 100, and Norway 50.  The best deal going would have been to not participate at all since the rewards of lower world oil prices would still be available to all.   But free riding allies know they have to appear to be making some effort to back U.S. initiatives if they, at some future date, are in need of U.S. assistance.    Sweden and, even more so, Switzerland are free rider nations par excellence.  They're both officially neutral and not part of NATO (Switzerland is not even in the European Union) which means they don't have to contribute troops and cash to any alliance.  And yet if some rogue Eastern European power went marching across Europe set on continental domination, NATO, with the US, would spring to Switzerland's and Sweden's assistance.  Americans shoulder a disproportionate share of the costs of policing the world (or more accurately, shaping circumstances to fit the current world order) with the benefits getting shared among many.  

U.S. workers are the world's most productive, yet the average American doesn't enjoy a standard of living commensurate with other industrialized nations.   Mr. American gets stuck with a huge public debt-- 59% of GDP-- with little to show for it, while the average European has his college education paid for or heavily subsidized and receives medical insurance and sometimes generous unemployment coverage.  A Swedish citizen can opt to live and work abroad for his entire working life.  At retirement age, despite having paid no tax to Sweden, he is eligible to return home and have the government take care of him.   It doesn't work that way with Uncle Sam.  An American not living in America, making his living in enterprises not associated with or in America, is still liable to pay American income tax on anything above US$91,500 in exchange for getting to enjoy none of the meager services the American government provides. 

I've long maintained that the best person to be in a kingdom isn't the king.  It's the king's brother. The king gets to enjoy the perks of a palace, servants, extravagant meals and travel, but so does his brother.  The king always remains in the public eye.  He gives up the life of a free man to serve the kingdom.  The brother can lead a private life.   He doesn't get criticized for his decisions or threatened with assassinations.  And so it is in the kingdom of the superpower that the nations which derive the greatest benefit are the superpower's brothers and relatives.   The relatives in this case would be Japan, Sweden, Switzerland, and most NATO allies, all of whom benefit off America's political and economic power.   The brothers are the nations that also coast off America's cultural power. 

The British spread the English language all over the world, such that by 1922, a quarter of the world's population was part of the British Empire.  It was the Americans, however, who made it cool to learn and speak English.  The United States, as the pre-eminent power after World War II, pumped its affluent culture all around the world and got others, of their own volition, to embrace English.  Today, English as the lingua franca doesn't just benefit the superpower.  The United Kingdom, Australia, New Zealand, Canada, and Ireland (and to a much lesser extent, South Africa, Singapore, and India who use English as one among several official languages) benefit, too. 

Fellow Anglophones, who don't just share a language with the superpower but a culture, find it easier to do business with and in the superpower.  The US is the single biggest investor in the UK and Australia, and the UK is the single biggest investor in the US.  Ireland, as a tax haven and English-speaking nation, is America's nation of choice for setting up European branches and call centers.  The syrup concentrate for 70% of Coca Cola's 1.5bn drinks served a day originates in Ireland.  The US shares intelligence and signals intelligence with the four English-speaking countries of Canada, the UK, Australia, and New Zealand.  These are the only four nations the US has officially declared it does not spy upon.   Why spy on a nation when its interests are virtually aligned with your own?

The moral here for the aspiring rich nations of the world:  be on good terms with a superpower and preferably speak the same language and have a similar culture to a superpower, but for heaven's sakes, DON'T BE ONE!  The position is vastly overrated and costly and hardly worth it.  Ask the indebted American people.  The huddled masses yearning to breathe free would be less tired and less poor if they'd immigrated somewhere else.   

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