The Dominance of the American Market
The Dominance of the American Market

Why is the American market so dominant within the force of globalization? The United States can be seen to play such a prominent role in cultural globalization for a number of reasons:

  1. The size of the U.S. market. With nearly 300 million consumers, the United States is one of the largest markets in the world. When a company has access to the U.S. market and these 300 million people, it can take advantage of economies of scale.
  2. The wealth of the U.S. economy. Although the United States contains only four percent of the world’s population, it accounts for nearly 25 percent of global economic output. The combined effects of being one of the richest countries in the world and one of the largest in terms of population put the U.S. market in a dominant position. Only the European Union now exceeds the U.S. market in size and wealth. The EU achieved unity of currency in 2002. Currently, the Euro has been adopted by 17 member states of the European Union and is shared by 500 million citizens, making it one of the world’s most important currencies and one of the EU’s greatest achievements (European Commission, 2013).
  3.  A comparatively homogenous culture. When measured in terms of the numbers of languages and ethnicities present, the United States ranks as one of the most diverse countries in the world. However, when measured by the size of minority ethnic, linguistic, or cultural groups, it can be considered relatively homogenous. Consider that 97 percent of the U.S. population is considered fluent in the English language, and that the U.S. Census Bureau classifies 77.9 percent of the population within one major ethnic group (Caucasian, non-Hispanic) (US Census, 2012).  This contrasts dramatically with countries such as Nigeria or India, where no language is spoken as a mother tongue by any segment that accounts for more than 30 percent of the population. The ability to speak English grants one access to almost the entire U.S. population, as well as hundreds of millions of other people around the world.
The U.S. Market versus the World

  • GDP per capita vs. Population: In 2012, the United States had the world’s 7th largest GDP per capita, with a per capita GDP of $49,965, superseded by various nations including Qatar, Luxembourg, Bermuda, Kuwait, Jersey, and Norway.
  • Population vs. GDP per capita:The United States was the world’s third-largest country by population in 2012. Of the world’s 10 most populous nations, only one other country, Japan, had a GDP per capita above $10,000 (World Bank, 2013).
  • Language: Linguists estimate that more than half a billion people around the world speak English as a primary or secondary language, and that nearly one billion people understand some English. Only Mandarin Chinese has more primary and secondary speakers. It is important to note, however, that Mandarin Chinese is limited to South-East Asia, while English has virtually reached a global spread.

As a result of the size of its market, the US is the largest import destination in the world.  According to the World Trade Organization (WTO), in 2012, US imports totaled $2.3 trillion, which constituted 12.7 percent of the world share.  This has greatly exacerbated the trade balance (exports – imports) in the country, which currently stands around – ($600) billion (“U.S. international trade,” 2012).  Ironically, this access has allowed other markets around the world to grow considerably.  Since the US market keeps buying foreign goods, foreign producers are becoming more prosperous.  This is particularly visible in China, who exported $425.5 billion worth of goods to the US in 2012.  As a result, the Chinese economy has been growing at an astonishing rate, and is currently challenging the US dominance of the world market (US Census, 2013).  For example, Chinese exports have recently taken a strong hold in the Latin American market, where China has become the #1 import market for Brazil, the largest economy in the region.

A recent book by Fareed Zakaria, entitled The Post-American World: Release 2.0, paints a vivid picture concerning how the hegemony of the United States has been declining in recent years.  The recent economic crisis has only exacerbated the trend.  The emerging economies were not only affected to a lesser extent, but they also blame the US and Europe for causing the Great Recession.  Therefore, the dominance of the US market is coming into question, and as a result of globalization and the rise of the BRICs (Brazil, Russia, India, and China), the world is looking for alternatives to the US.  This is shown in Latin America by the rise of UNASUR and across the Pacific by the forecast future dominance of China.  As a result, the hegemony of the US has been in steep decline, and the rise of the rest has undermined US dominance.

Another cited reason for the decline of U.S. hegemony is its dependence on foreign debtors, the U.S. has also outsourced much of its manufacturing and decreasing confidence in the dollar since Standard and Poor downgraded its credit rating, has forced them to rely on military prowess to maintain hegemony abroad (Todhunter, 2013).

 

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