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US financial power: a bang and a whimper

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No one denies America's economic power. The US holds more than a third of the world's stock value, headquarters nearly a third of its top 100 nonfinancial companies, and produces a quarter of its goods and services.

American views and values have shaped everything from world trade agreements to key international economic institutions such as the World Bank and the International Monetary Fund (IMF).

What's less clear is whether the US abuses that economic power, as its critics charge, for control in an imperial manner.

The most obvious trend is that since the end of World War II, the economic rise of the rest of the world has trimmed America's power, forcing it to seek compromises. And when the US has thrown its weight around - imposing embargoes and trade sanctions on other nations or by bargaining hard in trade and other international deals - it has met with mixed results. But the nation retains, not control, but a marked influence in the world economy. Sometimes subtle, sometimes bald (especially in the case of oil), America's economic clout is more pronounced than since Britain ruled the world.

"Our ability to use our economy as a weapon is limited," says Clyde Prestowitz, president of the Economic Strategy Institute in Washington, D.C. In his recent book "Rogue Nation," he writes: "Empires are something Europeans or Chinese or Japanese have, but not Americans. Nevertheless, if it looks, walks, and quacks like a duck, chances are it's a duck."

Fear of domination by an economic behemoth is nothing new. In the 1960s, Europe was alarmed by the scale of investment by US companies. In the 1980s, Americans talked of the invasion of Japanese investors. And in the 1990s, European purchases of American companies began to attract attention.

But the situation is more balanced than six decades ago. Right after World War II, the US accounted for half of world output. Since then, its dominance of the globe's economy gradually diminished as Western Europe revived and came together; Japan flourished; and India, China, and many other developing nations moved ahead.


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