American Global Leadership is on the Ballot

American Global Leadership is on the Ballot

By Paul A. Myers

Americans are making a choice in the coming election on the future growth of American wealth and income by voting for or against American internationalism.

Donald Trump promises that his second administration would be a radical break with the decades since Ronald Reagan, a neoliberal era that has left many Americans disenchanted. But the long sweep of economic success since the Second World War is rooted in the decades of postwar stability provided by the Nato security treaty and widening trade relationships and volumes. The alliance has been the backbone of European-American economic progress.

Trump’s radical break promises to undermine Nato’s cohesiveness on security and return to the unilateral world of the 1920s and 30s where it was every country for itself. Trump II would impair trade relations by implementing trade-destroying tariffs also not seen since the 1930s. This is to repeat the Great Depression playbook.

American internationalism would be dead. Trump would overthrow it and replace it with a mix of protectionism, isolationism, and unilateralism. A likely result would be to put at risk trillions in American wealth and income because US wealth and income are highly internationalized.

More than any other factor, American economic success centers on its leadership of the 41 advanced economy democracies. These countries comprise about 1.4 billion of the world’s 8 billion people yet produce nominal GDP of $62 trillion or 55 percent of the world’s $112 billion of global GDP. In purchasing power terms, it is about 40 percent of global output. (World Economic Outlook 2022 database.)

The US has an outsize share of advanced economy GDP with the US producing $27 tillion of the advanced economy total of $62 trillion (45 percent measured in US 2012 dollars) and 24 percent of the world total of $112 trillion.

A similar relationship holds relative to world wealth. US wealth of $67 trillion is about a third of total global liquid wealth of $210 trillion. US stock markets are valued at $46 trillion out of a global total of $110 trillion.

Wealth is crucially linked to future economic growth, which is linked to international trade growth, not antagonistic to it.

Since 1995, global trade has expanded five-fold, a powerful driver of wealth and income expansion. Over the period 2019 to 2023, merchandise trade is up 6 percent, services 21 percent, and digitally-delivered services by a whopping 50 percent. The US is a global leader in digitally-provided services; trade is a power multiplier on the tech frontiers of US economic growth. In particular digitally-provided services show how the creation of new comparative advantages by America drives both domestic growth and international trade.

The advanced economies lead world trade with 62 percent of the total with European trade being almost three times larger than that of the US. Europe is a vital component of US growth because of Europe’s outsize role in trade. Note that the lower wage and commodity-exporting developing world is hardly taking advantage of the advanced countries on the trade playing field.

Long story short. The advanced economy democracies are the largest group of countries ever integrated on the basis of shared cooperation.

The US must broaden and deepen the cooperation among the advanced democracies as a central base from which a wider group of countries can be brought into alignment with the basic workings of a cooperation-based order. The third phase is to reach an even broader common understanding with all countries including adversaries on issues of vital common interest.

The singular challenge over the coming decades is for the United States to sustain its global leadership by guiding the development of consensus worldwide policies toward constraining emissions. The way forward is a three-step process. Crucially, more trade, not less, will power the process.

The end goal is straightforward. A very wide circle of common interest must be constructed that stabilizes the climate. This simply must get done.

The US occupies a place of unique centrality to build ever wider circles of cooperation arising from its success as the current leader of the most economically capable alliance in history—the advanced economy democracies.

Other more nationalistic or authoritarian-inspired international orders such as envisioned by China’s President Xi have no chance of reaching the degree of global cooperation that adverse climate change poses. The incentives for all the world’s nations to move towards a democratically formulated global consensus are powerful. Success has to be democratically led, not strongman led. Beijing is proposing a false choice.

If the current base of advanced economy democracies is central, then the globe-spanning security alliances led by Nato and covering virtually every advanced democracy are fundamental.

Nato currently includes 32 members in Europe and North America. The US, the centerpiece power in Nato, also has further formal security agreements with the Pacific democracies, who are also associated with Nato through partnering arrangements. Other countries shadow in the umbrella provides by these agreements. Collective security is not for losers; it’s the winners’ circle.

President Joe Biden’s strengthening of the global alliance system is his pivotal achievement, a robust foundation for a better future. As president, Kamala Harris would build upon and expand a long tradition of American prosperity built upon international leadership. Trillions in future income and wealth ride on the outcome of the election.

Presidential candidate Kamala Harris intends to build on this success by expansion of the democratic alliance worldwide. Her election is a clear choice for continued expansion of wealth and income.