HOW THE US BECAME THE WORLDS LARGEST ECONOMY Large national territory* & population made the largest geographic market in world (economies of scale through mass production) A common language facilitated interregional commerce Nearly continuous labor shortages, relative to Europe, kept wages higher Higher wages induced more labor-saving technologies, raising per hour productivity and thus worker wages, until 1970s. Norms of innovation and invention, research supported by public & private funding Abundant natural resources Cheap timber for low cost housing, factory buildings Cheap iron ore (Mesabi Range) helped US steel industry to become lowest cost in world (til ~40 yrs. ago) Abundant rich farmland facilitated low cost food supply Possession of world’s largest oil reserves, abundant coal Pacific & Atlantic isolated US from chronic warfare and enemies Post-WWII: did not need to rebuild, so was able to dominate mfg. goods *SW U.S. taken from Mexico mostly through conquest-induced purchases