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US financial power: a bang and a whimper

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As a result, the US is the world's biggest "debtor nation." Foreigners own far more of its direct investments (plants, equipment, office buildings) and financial assets than Americans own in other nations. That fact was noted last week in an IMF report warning that the voracious appetite of the US for borrowing money could push up world interest rates.

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Not surprisingly, most US analysts see America using its economic might relatively benevolently, even absent-mindedly. American MNCs and government representatives are "very haphazard" and "not terribly organized" in employing US economic and political power to protect US interests, says John Walsh, director of the Group of Thirty, an international body of experts in international economics. It's less organized than European nations or Canada, he adds.

The view that MNCs are "instruments of US imperialism is fundamentally mistaken," says Michael Mussa, a former top economist at the IMF. Unlike the British East India Co., which ran India for about 150 years in cooperation with the British government, today's American MNCs have as their prime goal making money for stockholders, says Mr. Mussa, now at the Institute for International Economics, a Washington think tank.

American dominance

Not everyone agrees the US is so disorganized or benevolent, especially when it comes to oil. "A core concern of US foreign policy since World War II has been to control Middle East oil - control, not use," says Noam Chomsky, author of "Hegemony or Survival: America's Quest for Global Dominance."

Even in the 1920s, the US maneuvered "to weaken the British imperial system and take over some of its international role," he charges, with its "capitalist institutions" emerging after World War II with "overwhelming influence."

Few analysts believe President Bush went into Iraq to take over its giant oil reserves. Nonetheless, "the US is looking for reliable sources" and would like to see a "friendly government" in Iraq, Mr. Walsh says. "Oil companies and the government work hand in hand."

Prestowitz, in an interview, says: "Through military might, unequal treaties [with other nations such as South Korea and Japan], intellectual excellence, entrepreneurial reward, and friendly persuasion, America has established unprecedented condominium over the globe."

Its condominium, or joint rule, is "not malevolent in a sinister sense," he adds. Rather, it is ideological, aiming to spread democracy and freedom to other nations.

How does the United States hegemony compare with the famed British Empire of the 19th and early 20th century?

Niall Ferguson, a British historian now teaching at New York University's Stern School of Business, finds both similarities and differences:

• At its peak, when the sun literally did not set on its empire, Britain accounted for 10 percent of total world output of goods and services. The US now produces 25 percent of world GDP.

• Militarily, British imperial power never dominated the world like that of the US military today.

• In 1881, about 220,000 British troops were stationed overseas. Today, the US has somewhat more than 250,000 military personnel abroad.

• Britain was a net exporter of capital to its empire, acting as a "world banker" channeling funds to relatively poor countries. In contrast, the US is a massive importer of foreign money. A new IMF report suggests US foreign indebtedness will soon reach a level equivalent to 40 percent of its GDP.

• The US empire is one without colonists or settlers. US service personnel tend to regard foreign postings as "rare and unpleasant duties." About 4 million Americans live abroad, but mostly in Canada, Mexico, and Europe. The British Empire deployed its military, civil service, and businessmen abroad for long periods of time. More than 15 million British subjects were settled in the temperate zones of its empire a century ago.

Mr. Ferguson sees the US as managing an "empire in denial" with an "attention-deficit disorder," unable to maintain for long a public commitment to foreign intervention.