HW3ECON428_AnnaBrainard

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Brainard1 Anna Brainard ECONS 428 Professor Rahman 19 April 2023 Homework 3 For this assignment I will be analyzing how the United States has played a significant role in spreading modern capitalism and its ideologies across the world particularly through its political and economic influence. I will be embedding scholarly articles that help guide understanding of how this has affected society on a global scale and shaped our modern world. The American political and economic agendas have played a significant role in promoting globalization and spreading capitalism throughout the world. The United States of America has had a key role in shaping the modern global economy. They also played great part in the creation of the World Trade Organization (WTO). One of the main ways that the United States spread capitalism was their trade policies. The U.S constantly pushed for free and open trade on a global scale. This helped forge a more open global market, which then led to many American countries expanding their operations internationally. Another way that the U.S. has played a pivotal role in globalization and the spreading of capitalism is through their economic policies. These policies focused on creating jobs and wealth through private enterprise. They have pushed these ideas out on a global scale with their strong economic influence all over the globe. Their trade policies have established a strong proponent in intellectual property rights, which has spread American

Brainard2 culture and technology all around the world. Overall, the American economic agendas have been key in shaping globalization and spreading capitalism all throughout the world. The American financial system has played a critical role in the spreading of capitalism on a global scale. The New York Stock Exchange (NYSE) is the largest stock exchange in the world and Wall Street is home to some of the largest investment banks and hedge funds in the world. The Dow Jones and NASDAQ indexes are major indications of global market trends. A major thing the American financial system has been able to do, is provide capital to businesses around the world. This is a crucial part of the system as it allows businesses to expand and grow through financing. “ Stock market liquidity and banking development are positively and robustly correlated with current and future rates of economic growth even after controlling for many other factors associated with economic growth ” (Zervos, 539) America has also played a vital role in the cultivation of financial markets internationally. They have been a model for other financial systems around the world. Another mark of influence has been the Dow Jones and NASDAQ indexes setting the pace for the market, as this is something closely watched by investors all over the world. In general, the American financial system has been pivotal in the spreading of capitalism by being role models for other financial markets around the world. American companies have played a monumental role in the spreading of capitalism throughout the world. This has been done by the international expansion of American companies into foreign countries, allowing them to have global influence. When they extend operations into foreign countries they normally bring changes to the local business environment and economy of that foreign country. The companies would integrate their technology into these countries for a stronger foothold. These companies being established also provided employment opportunities in

Brainard3 the countries that they are operating in. This is also another way for America to spread their culture throughout the world. The expansion of American corporations into foreign countries has greatly influenced the global spread of capitalism. The establishment of the U.S. dollar has had a profound effect on world trade. It sets the standard for foreign exchange rates around the world. “It is the most commonly held reserve currency and the most widely used currency for international trade and other transactions around the world.” (Siripurapu, 2) With the dollar being the most widely used currency in the world, it shows how influential America’s capitalistic methods have spread throughout the world promoting quality and effective business. The noticeable dominance of the American dollar as a international currency is directly correlated to the spread of capitalism throughout the world. This allows the U.S. to have significant power over the global economy. Although capitalism may seem like it is successful all the time, there has been some failures in the idea “American Capitalism”. A well-known scandal was the Enron scandal in 2001. Enron was an American energy company that was highly profitable until their accounting fraud scheme was uncovered. This showed how capitalism can make some people too greedy. Another time “American Capitalism” failed was in 2008, when the housing market crashed. This was the most recent financial disaster in the American economy. Mismanagement of sub-prime mortgages were the cause of this crash that would lead to a global recession shortly after. High levels of unemployment followed as America had to dig itself out of the recession. America’s economy has a great pressure to do well as it contributes to the global economy in such a massive way.

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Brainard4 There are many reasons why “American Capitalism” has faced criticism throughout its history. One of the big criticisms is the effect it has had on income inequality in America. A good portion of people realize the wealth all remains at the top, where people are garnering too much wealth and power. Another point of criticism is that big corporations have too much power and influence over governmental regulations and policies. Corporations will make decisions at the expense of their workers and customers and face zero repercussions. A similar tune can be sung when talking about the environmental impact of big corporations in the United States. They have contributed greatly to the pollution and climate change occurring in the world today; this is why there has been a big shift towards eco-friendly methods and technology. These are just some of main criticisms that “American Capitalism” has received since it has had such an impression on the global economy.

Brainard5 Bibliography Bakshi, Gurdip S., and Zhiwu Chen. “The Spirit of Capitalism and Stock-Market Prices.” The American Economic Review 86, no. 1 (1996): 133–57. http://www.jstor.org/stable/2118259 . Levine, Ross, and Sara Zervos. “Stock Markets, Banks, and Economic Growth.” The American Economic Review 88, no. 3 (1998): 537–58. http://www.jstor.org/stable/116848. History. Accessed April 22, 2023. https://history.uchicago.edu/news/boston-review-review-ages- american-capitalism-jon-levy.