[geoka9]

> If you look at the fifth chart, the large european economies also seemed to have grown slightly faster after the war than before it. So I’m not sure how much the U.S. is benefitting from being the hegemon.

Nobody's denying that the US-created world order has been good for its partners but that doesn't mean the benefit was at the US's expense. International trade is not a zero-sum game - the lifting tide and all that.

[rayiner]

The post I was responding to implied that the U.S. enjoyed a special benefit from being the one maintaining the hegemonic world order: “The US's expenditure on its military was never to protect anyone from the Soviets but to impose its own world order against the Soviets, it's been always self-serving.”

If the U.S. obtained such a special benefit, it should have grown faster than western europe from 1950 to 1990, but it didn’t. If that growth comes from peace, not being the hegemon—as you put it, a rising tide lifts all boats—then the U.S. is disproportionately bankrolled a peace that western europe equally benefitted from.

Part of the story here is that international trade just isn’t that important to the U.S. 90% of U.S. GDP is domestic. Just 1.1% is exports to Europe.

[geoka9]

> If the U.S. obtained such a special benefit, it should have grown faster than western europe from 1950 to 1990

Not necessarily; the US could have extracted that benefit by staying ahead of the rest of the world in terms of its citizens' wealth, with all the benefits this entails.

We can't know the "what-if" (would the US have become even richer by being an isolationist MAGA dreamland), but we know for a fact that the world order was created and maintained by the US, so it must have had its benefits all this time.

[rayiner]

That’s possible, but it’s a much more uncertain claim than the one being made above. The US became 50% richer than western europe by being an “isolationist MAGA wonderland” before reengaging with the world during the wars.

Did hegemony help the U.S. maintain that edge? Maybe! But I think that’s a harder claim to prove than suggested by OP. I think the direct cause of America keeping its edge in the second half of the 20th century is we have Silicon Valley. I can think of a mechanism how reserve currency status is an indirect cause: reserve currency status means the world invests in American banks, and banks then use that money to fund tech startups. But is that really what’s happening? As I said above, I’m unsure.

[geoka9]

Reserve currency status makes increasing money supply easier (the US has run large deficits and monetary expansions with less inflation than peers). "Petrodollars" create persistent demand for USD, independent of US domestic conditions - countries that import oil must earn USD (via exports, borrowing, or reserves) or hold US reserves in advance. Oil exporters, on the other hand, invest surplus dollars into US treasuries. This process absorbs US money creation and lowers US borrowing costs. This is an enormous advantage that the US is likely to lose if it continues on its isolationist course.