Free soup again

"Through the early 1900s, the United States played a role in the world economy suprisingly similar to China's in recent years. Until the start of the Wolrd War I, the United States had long been a "net debtor" country. It had relied on foreign loans and investments to build the factories and lay the railroads that ultimately made it an industrial titan. By the end of the World War I, it had become a "net creditor", as its undamaged industrial base supplied European combatants and the former costumers of ruined european companies.

Until the 1920s, its farms and industries made America the workshop of the world. It ran trade surplusses with most other economies, which meant that a disproportionate share of the world's jobs were in America (it was doing work that other people consumed), and a disproportiante share of what it made went for other people's use. Foreigners paid the difference by transferring gold reserves or taking on loans and investments from Americans. So far, this is like China's story. And so far, so good.

This very role as global exporter made the United States unusually vulnerable when global demand collapsed in the 1930s. Haing had more than its 'fair' share of the world's jovs to begin with, America had more of them to lose. This doesn't mean that Americans suffered more deeply than Europeans. We got Franklin Roosvelt; they got Hitler, Stalin, Franco and Mussolini."

James Fallows, China's Way Forward, on The Athlantic Monthly.