The dramatic globalization that has taken place in the last few decades means that what happens in China, India, Europe, etc., affects all 3,143 counties in the United States, including Bourbon in Kansas. The most obvious example is COVID-19, which most experts agree originated in Wuhan, China; our county lost 45 residents.
Additionally, we have many manufacturing and retail businesses in Bourbon County that rely upon the import/export supply chain, which has experienced disruptions in recent months. These events impacted the profit of local companies and the earnings of our citizens. One Bourbon County manufacturer had presold a custom product for nearly $500,000.00, only to have the completed item delayed for weeks by a couple of parts that are normally readily available at a cost of about $600.00. Rural Kansans cannot say that global markets do not matter.
How does the United States (“US”) stack up when compared to global markets? Looking at Gross Domestic Product (“GDP”), which is the sum of the value of all products and services produced by an economy in a year, the US became the world leader in GDP in 1890 at about $13 billion, passing China and Great Britain. We have been number one every year since then, and by 1907, we had doubled our nearest rival. Between World War I and the Great Depression our economy was often three times bigger than the number two nation.
After World War II, our biggest economic rival was the Soviet Union; this lasted until 1977 when Japan overtook them to rank second. Japan stayed in second place until passed briefly by Great Britain in 2001; China took over second place in 2009. At that time, the US economy produced 10 times more than the Chinese economy.
What about today? We are number one at $21 trillion; China is number two at $14 trillion. China has exploded in growth in the last twenty years, and is expanding at a rate to pass the US within the next two decades.
Looking at the largest companies in the world in 2019, of the top 20 in market capitalization, the US has produced 13; second place is China with three. No other country in the world has produced more than one. Apple is number one on the list at over $2 trillion in value; for perspective, that is almost 10% of the annual GDP of the US.
The same list 30 years ago contained only six US companies, with Exxon coming in at number five on the list as the largest domestic company at $63 billion. Japan was the global leader with 13 companies in the top 20. Interestingly, no company on the list in 1989 is still on the list in 2019; apparently, innovation and value creation are still important, and, while totalitarian states like China can create efficiencies, the US system remains the most potent producer in the world. There is no need to change our economic system, unless it is less government intrusion into free markets.
China and other emerging economies bear watching, but the US is still strong and competitive worldwide. Stay informed and listen to reports coming from your representatives in government; rural America has much at stake.