United States Economic Conditions

General framework. The USA is the world’s leading economic power. Compared to other countries with larger geographical dimensions, they have some indisputable advantages: the size of the arable area is greater than that of Canada, China and Russia; the mineral resources are enormous. In addition, the large companies that extract minerals in the rest of the world are often from the United States. Also in the manufacturing sector, the USA gave rise to the first episodes of decentralization, moving production plants from NE cities towards peripheral walls, then towards urban centers of the West, then in Third World countries . (or in Mexico, especially after the entry into force of NAFTA).

● Characteristic of the US system is its high capitalization, a consequence of the direct access of small savers to the financial market (through instruments such as investment funds), which guarantees companies sufficient liquidity to allow for significant investments. Moreover, the formation of international competition has often led industries to ask the federal government for support and protection measures.

● The conditions of social inequality are marked: in the past it was mainly minorities who suffered, but today the problem is more widely distributed. However, only 12% of the population is classified below the ‘poverty line’ (2008), while the per capita income is $ 46,400 (2009 estimate). after a couple of decades of almost constant increases: it is the highest value among the large industrialized countries, despite the recession that started in 2000, the crisis of confidence following the terrorist attacks of 11 September 2001, the decline in industrial production, the recovery unemployment, stock market fluctuations and finally the financial crash that exploded in 2008. The reasons for concern are the scarcity of infrastructure investments, low household consumption, the increase in social spending caused by the aging of the population, the huge trade deficit and of the public budget.

● The euro could erode the role of the dollar as an international currency, with heavy repercussions on public debt, in fact largely subsidized by invisible items generated by the enormous volume of dollars circulating around the world. 3.2 Agricultural activities. The US world record in agriculture is overwhelming, thanks to an enormous use of mechanical means, fertilizers and fungicides and thanks to state investment in research, whereby farmers are informed about the crops best suited to their land. The size of the approximately 2 million farms increases sharply towards the West, but is also notable in the Atlantic region. Various measures have tended to favor direct management, even if in many cases agriculture is practiced part-time; clandestine immigration of laborers from Mexico is very strong in fruit and vegetable areas with a strong seasonal demand for labor, in particular in California and the SO. 0.6% of the active population cultivates almost 20% of the country’s area, to which must be added about 26% of meadows and pastures as well as 33% of forest areas.

● The largest cultivated area is used for maize, with almost 30 million ha (in the central-northern regions); production reaches 270 million tonnes per year and is largely used for fodder. Wheat is grown in almost the entire Mississippi basin, on over 20 million ha, with a production of 57 million tonnes. There is also a strong production of other cereals, especially rice (almost 9 million tonnes in 2006). Some productions, such as potatoes (almost 20 million tonnes), sugar beets, sunflowers and rapeseed, are present almost everywhere; notable are the subtropical crops in the SE states, California and, for a shorter time, Arizona, New Mexico, Texas, Florida: citrus fruits, peanuts, tobacco, cotton, in addition to soy (88 million tons), and pineapple in Hawaii. In the irrigated areas of California, world records are obtained in citrus production (and fruit and vegetables in general); for wine production the USA closely follows the Mediterranean countries.

● The forests used are mainly those of the western mountainous region: almost half a billion m3 of timber are obtained (2006) as well as significant quantities of pulp and paper.

● The livestock sector counts on a bovine herd of nearly 100 million heads, reared in stables in the Eastern States and in the wild in the Great Plains and in the mountainous region; over 60 million are pigs in the Great Lakes area; much more modest, but still not negligible (despite the significant decrease) is the number of sheep (6 million) and the number of birds is conspicuous. To all this must be added over 5.7 million tonnes of fishery products.

● Agriculture is connected with a complex of industrial productions upstream, for the supply of machinery, fertilizers, etc., and downstream, for the processing and trade of products, constituting a true agro-industrial system. In the mid-20th century some specialized agricultural belts (belts) were distinguished, according to the Megalopolis of the NE: the dairy belt developed in the vicinity, with dairy activities; further out, the corn belt, with corn, today largely flanked by soybeans; still outside was the wheat belt, destined for wheat; further on, in the Great Plains and in the mountainous areas, there was the area of ​​wild cattle breeding. In the Southern States there was the cotton belt, the only one determined by the climate (once with cotton, today with tobacco, sugar cane, peanuts). Since the market has become truly global, the US has been concerned about the level of international prices to the point that, in order to keep them high, the reduction of some productions is planned, as in the past they proceeded with the destruction of surpluses. Despite everything, however, agricultural production is insufficient for the internal needs of the market. 3.3 Mineral and energy resources. The USA is among the world’s largest producers of minerals, although the needs of the industrial apparatus also make it the largest importer of raw materials (fig. 2). In the energy sector, the great availability of coal (Western Appalachians, Rocky Mountains) was one of the conditions that allowed the industrial take-off of the USA, even if the replacement of coal with oil was early, in the years of the Second World War. Coal has become competitive again with rising oil prices and more than one billion tonnes of coal are produced annually (2006). US oil (Texas, Alaska, Louisiana, California) has seen a resumption of extraction after rising prices, while it had experienced a serious decline, due both to the high costs of extraction and processing, and to the desire to preserve national reserves. Today the USA is the third largest producer in the world, with over 250 million tons, but it is also the first importer and covers about two thirds of domestic consumption with imported oil. Research in the ocean floor and experimentation on various bituminous rock formations are very active. A network of oil pipelines of nearly 300,000 km, unparalleled in the world, distributes crude oil to refineries, which total a refining capacity equal to about 20% of the world total. The natural gas of the USA (second producer, with over 500 billion m3) is extracted mainly in Texas, Louisiana and Oklahoma ; the pipeline network measures more than 300,000 km. Electricity production (4,000 billion kWh in 2005, a quarter of world production) is guaranteed by conventional thermal power plants for about 71%, thermonuclear power plants for about 20% (with a production that assigns the USA world primacy), hydroelectric for 7%; in addition, a large amount of electricity is imported from Canada. However, the US is among the countries most committed to experimenting with alternative ways of producing energy.

● The largest iron deposits are those of Lake Superior and, with many others, they produce approximately 52 million tonnes of metal (2007). Copper production (Utah and other Rocky Mountain states), with about 1.2 million tons per year, ranks third in the world; likewise that of lead (430,000 t) mainly mined, often together with zinc (740,000 t, fourth producer), in Missouri, Idaho, Montana. Among the first in the world are also the quantities extracted of gold (240 t) and silver (1200 t), from Alaska and the Rocky Mountains, as well as sulfur, phosphates, bentonite, molybdenum, barite and other minerals. 3.4 Industrial activities. The industrial sector now accounts for less than 20% of GDP and for less than 23% of employment (Figure 2). Despite the contraction of almost all sectors with low technological content and low added value (for which products are imported), US productions continue to have a global significance in all sectors. The composition of exports, however, sees about half represented by intermediate goods (mechanics, electrical engineering, electronics) and only about 15% by consumer goods (mechanics, fine chemicals), which instead account for about a third of imports. The steel production, which was once very huge, characterized entire regions and determined the world economic course, has been greatly reduced and has increasingly oriented towards steels, maintaining in this the third place in the world, albeit with a large detachment from China and Japan. The metallurgical sector remains important even for metals of which there is no internal availability, such as aluminum.

● The highest concentration of industrial plants in the country is always in the manufacturing belt, between the North Atlantic coast and the upper Mississippi, and between the Great Lakes and the Ohio Basin in the S: since its origins this has been the most industrialized part of the country, both for the presence of coal and iron deposits, for the availability of water and then hydroelectric energy, and for the possibility of using water transport – the Great Lakes-San Lorenzo waterway is the most important in the world and is connected to others to the south. It is in this area that Detroit is located, already the world heart of motor vehicle production, and where a large part of the production of cars, commercial vehicles and tires is still carried out. For mechanical products, including vehicles, the country it is by far the largest producer in the world. The chemical industry is also concentrated in this area, which produces between one fifth and one quarter of US exports, and which is at the top of the world rankings for the sector even though it is now invested by Chinese competition. There is certainly no shortage of light industries in the area, with the exception of textiles (cotton), traditionally strong in the S of the USA. Despite the recent relocation to Mexico and other Latin American countries and despite competition from Japan and China, the US textile sector still ranks first in the world, as is the food sector.

● The oil refining activity obviously concentrated in the states on the Gulf of Mexico (the USA refines almost half of the gasoline produced in the world) and subsequently the production of synthetic fibers developed, given the availability of raw materials.

● Industrial activities are widespread throughout the country, but the large area of ​​the Mississippi Basin and that of the Rocky Mountains are undoubtedly not very industrialized. The Pacific coasts have instead recorded great development: first as a consequence of the Second World War and the Korean War, but then and above all due to the growing concentration of study and research activities, and therefore of advanced technologies, of new materials (special alloys, polymers, advanced ceramics, composite materials, optical fibers, miniaturization techniques) and so on. Silicon Valley (➔ # 10132;), California, considered the cradle of information technology. Dozens of ‘technology parks’ have developed on his example: for example, Technology Square or Route 128 in Boston, with the support of the Massachusetts Institute of Technology, or the Technological Triangle near Raleigh, the capital of North Carolina. The results of ‘pure’ scientific research are being applied in ever shorter times and the USA invests more in research than any other country in the world, through both the administration and businesses, favored by tax legislation.

● The use of technology and continuous technological innovation is a constant in the USA: from when, in the 19th century, mechanization had to make up for the shortage of manpower, to when the war innovations aimed not only at guaranteeing superiority in the field, but above all at minimizing American human losses. The military-industrial complex continues to be at the forefront of innovation in the field of new materials, remote communications, electronics, etc., even if the civil consequences are increasingly rapid and numerous. Many US industrial companies have thus consolidated a position of essential world pre-eminence: for example, in the computer sector IBM, Apple, Univac and Honeywell; General Electric dominates the electromechanical sector, Westinghouse the nuclear research, ITT, Bell and ATT the telecommunications, other companies are giant in the chemical, pharmaceutical, beverage sector and so on.

● However, it should not be forgotten that more than half of US GDP is now guaranteed by small and medium-sized enterprises; that, increasingly at the margins of the system, activities that are no longer competitive survive; and that very serious problems of reconversion affect traditionally important sectors, such as the automotive sector. 3.5 Services and communications. Almost 80% of the active population is employed in the service sector, which produces an equal share of GDP and which is almost totally based, in every sector, on private organization. It was the private initiative that structured the railway communications network, for example, which in the space of twenty years caused the birth of an unprecedented steel industry, the colonization of the Great Plains, the definitive defeat of the last Amerindians, the mining exploitation of the Rocky Mountains, the formation of a unitary market of continental size. The overall railway network, entirely private, is the longest in the world, with approximately 229,000 km (2005), electrified for only a few hundred km. In 1916 the network even measured 420,000 km, with 5 trans; continental lines, before being subjected to competition from 6,544,000 km of roads, about two thirds of which were paved. The toll motorways extend over 90,000 km. There are 137 million cars in circulation, 105 million commercial vehicles. Since the 1970s, the transport of people is increasingly oriented towards the air vehicle, a process accelerated in the 1980s (deregulation), when prices fell. In 2005, 725 million passengers were transported, thanks to over 7,000 airports: the New York airport system has a huge overall movement but, for each airport, the largest traffic is that of Atlanta (90 million passengers), followed by Chicago -O’Hare, then from Los Angeles, Dallas-Forth Worth, Denver. The busiest port system is now the one headed by New Orleans (208 million tonnes in 2007), followed by Houston (200 million, despite being a river port) and then by New York (143). For containers, however, the first port is Los Angeles, followed by Long Beach and from New York.

● The remote communications sector is highly developed: telephony, radio and television, and more recently the Internet, with over 700 connections per 1000 residents. The dissemination of information printing is always widespread and the postal service is very efficient, which among other things guarantees the forwarding of the large volume of mail order sales. The retail trade is almost monopolized by the large distribution networks, having almost eliminated traditional commercial establishments; the spread of the use of frozen foods and the use of fast food restaurants have led to the development of huge catering chains.

● In international trade, the US appears (2007) as the third world exporter, after Germany and Japan, and as the first importer, before Germany and China.

United States Economic Conditions 2