Nick Denton has an interesting question for neocon imperialists. Why can't they leave well alone and let the world sort itself out? Wouldn't that actually be the right "laissez fair" response?

But a cynic might think that the failure of the US political class to come to the same compelling conclusion is suggestive that the premises are wrong. Nick trusts "in the inexorable advance of liberal capitalism, [and holds] the United States to be the foremost force for good"

But suppose this isn't true. Suppose that the US is just a big country (with a big economy) that got lucky. It was the first big country to get the benefit of the explosive economic growth of industrialization. And the winner-takes-all effect of power laws in scale-free networks (like the capitalist economy), means once it was there, it retained the advantage.


Perhaps it's this mere first mover advantage, and nothing to do with liberal economics, the political system, constitution or entrepreneurial spirit that keeps the US afloat. Why isn't this outrageously heavily indebted nation a basket case like Argentina? Because foreign investors trust it's currency. But that trust doesn't need to reflect a deep faith in America and it's values by the rest of the world. What other currency could you keep your money in?

The dollar only has to be safer than the next most stable currency by an
infinitessimal margin to make investing in theUS the sensible strategy. And from then on, positive feedback kicks. Each investment link of trust makes the currency seem more attractive to the next potential investor.

We know that positive feedback plays a significant role in investment in stocks. It's why we get bubbles and spectactular collapses. We have no real reason to suppose that dealers in currencies are wiser than investors in companies. Both are making short term bets that the
thing they invest in will increase, or at least hold, long enough for their purpose. But they seldom look deep into the black box. Relability is guaged, instead, by observing what everyone else does. In this situation trust in the US system could be as baseless as trust in Enron.

You : Right, yeah! That's why the US economy has been the most dynamic and productive for the last century. Any reason to think that would-be rivals like Japan, Europe with consistently lower growth rates and longer, deeper recessions, have any kind of genuinely better economic system which would prevail if only the US didn't have first mover advantage?

Me : None whatsoever. But how this works, see, is like this. I've just dreamed up a fairly wild alternative conjecture to explain the
success of the US. I don't know if it's true or not, but it might be. Just in case anyone lacked the imagination to see that there could be an alternative explanation.

So now things get messy. The only way to decide between these two rival hypotheses is to start looking for some kind of more detailed descriptions of the claims being made; what kind of empirical evidence is available, and how we should weigh it up etc. I hope you'll debate this by adding comments, suggesting evidence etc.