Among the many political events of the last few days is President Trump’s visit and speech to the United Nations. Although his over the top boasts about the record of his administration drew derisive laughter, it was his theme of “America First” that put a serious tone to his speech as world leaders saw a diminishing America before their eyes in a time when its leadership is needed more than ever.
The appearance of a retrenched, inward-looking and nationalistic point of view is cause for concern because the leadership vacuum it would cause would also create a dispossessed instability in every important sector of the international order. In a sense, America would turn its back on the global power structure that it invented.
The United States would also turn its back on its own continued economic development that is the essence of a capitalistic society. It would cease or slow-down the development of markets for its consumer products abroad.
The British colonies in America were very much inward-looking when they challenged the economic policy of the mother country to achieve their independence. Americans were in-ward looking when they decided to expand across the continent and even fight a civil war to confirm their unique identity.
The 20th Century saw an America that was still inward-looking as it set about making its population both the manufacturers and consumers of their own products. World War I convinced them of the folly of going across the ocean to get involved in other people’s business.
World War II changed everything as the United States became a superpower politically, economically and militarily with authority and responsibilities across the globe. One of the major responsibilities for the sake of peace was to redevelop a devastated Europe and Japan and in the process, expand the market for American products.
The Marshall Plan, the leadership of General MacArthur and foreign aid created a new Europe and Japan as well military, political and economic stability in the face of the Communist threat. Using foreign aid and trade deficits to maintain the peace and expand markets has been a trademark of American foreign policy.
The secret to American wealth is its dynamic national consumer economy. However, there are economic limits to a nation of 320 million consumers that are “teased” to buy things that they do not really need or find things they do need at a better price from another country.
Because most consumers are already involved in the national market, international trade has become the most important avenue for the growth of American capitalism. On the other hand, for example, although China has a population of 1.4 billion, the consumers that drive that economy number a little over half of that number.
That means that China has an internal untapped market twice as large as that of the United States and currently needs foreign trade more to sell than buy. Therefore, rather than demand balanced trade, the U.S. should be looking to create incentives for China to buy more American products as well as maintain the peace.
To many, it may be patriotic to say that our country comes before anything else. But the Greeks, the Romans and the British knew well what it is to serve an empire that exists beyond their borders.
In a sense, the United States has an empire fashioned from military, political and economic power and influence. That is the current state of things and to shrug from it can lead to a diminished America.