Why America Thrives

Why America Thrives

America thrived in the 20th century.

It has been the world’s largest agricultural, technological and financial power for fifteen decades.

Light, power, heat, and mobility industrialized and democratized. Households and workplaces became networked. Here’s why:

  1. They plugged into the electrical grid and lit up with light.

  2. They plugged into water and sewer systems and became clean and safe.

  3. They plugged into road, streetcar, and highway systems and became connected to one another.

America’s growth skyrocketed after World War II.

As Morgan Housel wrote:

"Marriage rates spiked... Soldiers wanted to start a family, in their own home, with a good job, right away.” 

There were more children born in the five years after World War II than the 30 years total before the war.

What’s the best brand in the world? The US Dollar.

Four reasons why according to Scott Galloway

  1. Near 100% recognition

  2. Owns a color

  3. Unique associations

  4. Extraordinary trust.

In the 1970s, the United States struck a deal to ensure that all oil contracts would be settled in US dollars. The impact:

  1. The US dollar became the world’s reserve currency

  2. The US enjoyed persistent trade deficits and became a global economic hegemony.

  3. Financial markets benefited from liquidity and foreign capital inflows.

Thus, the petrodollar system was born:

America represents 5% of the world, but roughly a quarter of its resources. The American brand is built on:

  1. Independence

  2. Equality

  3. Rule of Law

  4. Liberty

  5. Risk-taking

  6. Generosity

  7. Work

  8. Moral Leadership

As media united the American people, it equalized culture.

For years, there were only three TV stations and a handful of national newspapers and radio stations. Every night, millions of families sat down together to watch the same show at the same time as their next-door neighbors. 

Millions purchased a TV in the 1950s. In 1948, there were 170,000 TVs. By 1952, there were 15 million. Americans were literally in sync.

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Religion has brought many benefits, such as social capital and cooperation. As Tyler Cowen said: 

"Religion, even adjusting for income, has predictive power over the birth rate. It’s one reason why America still has a stable or a typically growing population, along with immigration. American religion has stayed remarkably strong for our level of income.”

America has the best geography in the world. It’s a 1.9 billion acre collection of cities, farms, forests and pastures.

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North American topography has three main benefits:

  1. Nearly endless capital

  2. Bottomless markets

  3. Low defense costs

Like America, nearly every major expansionary power of the past has been based in a temperate climate zone. 

America is connected by water, creating cultural, economic and political linkages. Rivers promote unity, and an integrated maritime network promotes unity over a far larger swath of territory. Low-cost transport encourages economic and social interaction along the transport routes.

The Mississippi is the world's longest navigable river (2,100 miles). It’s one of 12 major navigable rivers. Collectively, all of America's temperate zone rivers are 14,650 miles long.

By comparison: 

  1. China and Germany each have about 2,000 miles

  2. France has about 1,000.

  3. The entirety of the Arab world has 120.

America has more internal waterways than the rest of the planet combined. All these rivers create a network. The Mississippi and Intracoastal system accounts for 15,500 of the United States’ 17,600 miles of internal waterways.

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Why are waterways so important? Rivers, directly and indirectly, eliminate many barriers to economic entry and keep development costs low. Two-thirds of the Lower 48 can be reached easily, with some 90 percent of it within 150 miles of some sort of navigable waterway.

Of the United States’ 314 million people, some 250 million of them live within 150 miles of one of the country’s navigable waterways. America's incredible river network overlaps perfectly with the world's largest piece of arable land, the American Midwest.

America has excellent land quality. The greater Midwest is absolutely massive:

"With 139 million hectares under till, it is the largest contiguous stretch of high-quality farmland in the world.” — Peter Zeihan

All that water keeps transport costs low:

"The easily developed lands of the United States are not only the largest contiguous piece of such lands in the world, but they are also almost perfectly overlain by the American waterway network." — Peter Zeihan

The central portions the American plain are humid, yet temperate. This makes them perfect for corn and soybean production. The western sections are drier and receive lots of rain, making them ideal for wheat. Look at all that green!

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America is physically secure, due to its geographic position.

The United States is the only country with significant populations on both the Atlantic and Pacific coasts, with nearly 50 million people on the Pacific and twice that on the Atlantic.

The United States is now the world’s largest crude oil producer.

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As of 2014, America's consumer base amounts to roughly $11.5 trillion.

That’s triple anyone else! And larger the consumer bases of the next six countries:

  1. Japan

  2. Germany

  3. United Kingdom

  4. France

  5. China

  6. Italy

Combined. 

That’s why America thrives.


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