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American Economic Power Hasn't Declined—It Globalized! Summoning the Data and Taking Globalization Seriously

Authors


  • Author's notes: I am very grateful to James Parisot and Roy Starrs for comments on previous drafts, and to three anonymous ISQ reviewers for immensely helpful criticism. I am also grateful to Leo Panitch and Jonathan Nitzan for the intellectual champagne they served during my PhD, without which this paper could not have been written. All faults are my own. I thank the Social Sciences and Humanities Research Council of Canada for funding. See online Supporting Information Table S1 for methodology used in Table 1.

Abstract

This paper argues that a fundamental failing in the debate on the decline of American economic power is not taking globalization seriously. With the rise of transnational corporations (TNCs), transnational modular production networks, and the globalization of corporate ownership, we can no longer give the same relevance to national accounts such as balance of trade and GDP in the twenty-first century as we did in the mid-twentieth. Rather, we must summon data on the TNCs themselves to encompass their transnational operations. This will reveal, for example, that despite the declining global share of United States GDP from 40% in 1960 to below a quarter from 2008 onward, American corporations continue to dominate sector after sector. In fact, in certain advanced sectors such as aerospace and software—even in financial services—American dominance has increased since 2008. There are no serious contenders, including China. By looking at the wrong data, many have failed to see that American economic power has not declined—it has globalized.

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