From the ashes of World War II, the US rose as the undisputed global

economic superpower. It was able to possess so much dominance in the global

economy due to it having the capacity to exercise hegemony over the global
economy and its desire to reconstruct the post-war economic order. On the other
hand, others posit Cold War considerations caused the US to impose its dominance
to resist the spread of communism and display its dominance by exercising indirect
control through US multinational corporations. Ultimately, Cold War considerations
are the paramount reason for its dominance in the global economy, given they
catalysed the US willingness to exercise control in the global economic order.

Indeed, US dominance in the global economy can be attributed to its

capacity to exercise hegemony over the global economy following World War
II. The US gained tremendously from the War and was placed in a favourable
position since it was untouched by the war. The US benefitted immensely from the
ammunition and manufacturing industry, to the extent it had become the worlds
leading economy by 1945. The US sheer dominance can be illustrated through its
agricultural productivity where it produced almost half the worlds total in 1946, and
its mercantile marine rose from 17% in 1939 to 53% in 1947 of the worlds tonnage.
Also, US GNP increased from $81.6 billion to $135 billion from 1939 to 1945 and its
gold reserves accounted for two-thirds of the worlds gold reserves, with its industrial
output being half of the worlds total. Hence, its mammoth capacity to exercise
hegemony over the global economy accounts for its dominance.

Also, the US desire to reconstruct the post-war economic order led to

its dominance in the global economy. Having the benefit of hindsight, it realised
its World War II policy of isolationism was futile and the post-war US administration
was convinced the lack of firm US leadership in the global community led to the
economic and political disasters of pre-World War II. Thus, the US laid plans for an
open system of free trade. This referred to the Bretton Woods system which
established a fixed exchange rate system where exchange rates were only able to
fluctuate within a narrow band +/- 1% parity. The US also pegged the price of 1oz of
gold to a fixed price of US$35. This was made possible due to the large amount of
gold reserves the US had. When the US gold reserves dropped to $10 billion worth,
lesser than the US$80 billion currency they had floating in the market, the Bretton
Woods system failed and fixed exchange rates ceased. This highlights the
importance of the US role in ensuring stability in the global economic order. The US
also established the IMF and World Bank to disburse loans for capital investment
purposes and consumption purposes respectively. The US exercised dominance of
the global economy through IMF since it is the largest contributor, it has 17% of
votes which is significant considering 85% of all votes is needed for a motion to be
passed. In addition, the US liberalized the trading regime through its support of the
GATT, where US leadership negotiated for reduction and removal of major tariffs
through GATT rounds, and the US saw to 73% of all non-agricultural tariffs by the

mid-1960s. However, it is important to note that as the economic prowess of the US

waned, it was unable to sustain its support for global financial institutions, as noted in
the US facing its first run on the dollar in 1960, and this proved to be the harbinger of
things to come as it no longer had enough gold to trade for the US dollar in the
hands of other countries by 1971.

Furthermore, the Cold War climate following World War II conditioned

the US to factor in Cold War considerations into its decisions, such as the
desire to impose economic prowess globally to inhibit the spread of
communism. Following the fall of Czechoslovakia to communism in 1946, it led to
the Truman administration believing communism was an ideology only capable of
flourishing in conditions of poverty, and wanted to circumvent the spread through
taking the initiative to bring about global economic prosperity. Hence, the launch of
the Marshall Plan in 1948 by the US Senate and House of Representatives saw the
injection of $11.8 billion into Western Europe between 1948 and 1952, and included
$20 billion more into investments and similarly with Japan to prevent communism
from spreading into Western Europe and the Far East, such that the two nations
were put back on their feet by 1952. US also encouraged deficits in its own balance
of payments to provide international liquidity in the form of dollars, in light of Cold
War considerations. However, it is crucial to note that while such considerations
allowed US to exercise its dominant role, the US was overstretched as it had too
many commitments at containment such as supporting the Vietnam War.

Last but not least, the US was able to exercise indirect control over the
global economic order through its multinational corporations which displays
the massive extent of its dominance. The growing trend of expanding US multinational corporations was reflective of US immense and growing economic influence
in the global economic order. This is highlighted through US MNCs having expanded
the fastest, and by 1966 there were nearly 9000 US MNCs in Western Europe alone.
The book value of accumulated US direct investment abroad rose from only $11.8
billion in 1950 to a stunning approximate $233.4 billion by 1984. The vast dominance
the US had can also be seen by how US MNCs alone produced approximately $140
billion worth of goods by 1969 and many of their largest corporations had placed
more than half their total assets abroad, and more than half their total earnings came
from overseas.