There is food production, which will matter even more in a world facing both a coronavirus-forced re-emergence of poverty in many countries and the damage that climate change will inflict on agriculture. Only China and India produce more food than the U.S., which has far fewer mouths to feed than those giants. America also enjoys substantial financial advantages. The coronavirus has put banks everywhere under tremendous strain as default risks skyrocket. But prices for credit-default swaps suggest that investors consider large European banks to be at greater risk than their Wall Street counterparts, in part because the largest U.S. banks had much more capital before the crisis began.
There is also the continuing “exorbitant privilege” that Americans enjoy, thanks to the continued dominance of the dollar as the world’s main reserve currency. In the final quarter of 2019, nearly 61% of global foreign-exchange reserves were denominated in dollars. The euro ran a distant second at less than 21%. When governments face stress, they need dollars, and that allows the U.S. to continue to borrow as no other country can.
But the greatest advantage for the post-COVID future is the continuing dominance of U.S. tech companies. It’s not just that 13 of the world’s 16 largest Internet companies are American. It’s that the U.S. produces far more of both the biggest digital-platform companies and the startup “unicorns” that will drive innovation in artificial intelligence, Big Data, cloud computing, autonomous vehicles, drones and other cutting-edge technologies that will dominate global economic development in decades to come.
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