How America Became So Rich?

How America Became So Rich

America is not only militarily powerful, but it also has a GDP of 20 trillion dollars. Free market capitalism, innovation, and technical development are the foundational pillars of the US economy. Apart from that, the US has massive land control areas and natural resources that are incorporated into its economy. All these indicators are not enough to explain how the US became an economic powerhouse. There are some other crucial steps that the US took that led it to where it is today.

The Resilient Political System of the USA

 The USA got independence from Britain on 4 July 1776 and established itself as an independent and sovereign state. A robust political system establishes a robust economic system. A robust political system established by the founding fathers of the US played an important role in the economic growth of the country. The US founding fathers assured the prevention of civil war, military coups, and dictatorship. Adopting a presidential system made its decision-making system faster. Moreover, unlike the European hierarchical system, American society was composed of an educated middle class composed primarily of traders and settlers from different backgrounds. Therefore, democratic values were deeply infused in Americans.

Westward Expansion of America

The next secret of the US’s powerful economy is its territorial expansion, which helped it access minerals and strategic advantages. Initially, the US had only 13 states. After the purchase of “Louisiana” for 15 million dollars by Thomas Jefferson in 1803, the US territory expanded westward. As the US territory expanded, the “Manifest Destiny” idea paved the way for further global influence by the US. The annexation of Texas in 1845 led to the Mexico-American War, in which the US emerged victorious. Under the “Treaty of Guadalupe Hidalgo,” Mexico ceded almost half of its territory to the US, which also included Texas, California, New Mexico, Arizona, Nevada, Utah, etcetera. In 1867, it purchased Alaska from the Russian Empire. After the US victory in the Spanish-American War, the US increased its influence in Pacific and Central America and took control over Guam, Puerto Rico, and the Philippines. In 1902, the US purchased the construction rights to the Panama Canal from a French company. In 1903, the US President, Theodore Roosevelt, intervened in Panama and made it an independent country. Pursuing an “open-door policy” with China in the Pacific, the US expanded trade rapidly in the region.

The California Gold Rush

In 1848, James Marshall discovered major gold reserves in California, which made it the center of economic activity. Massive immigration took place in California, which is why it is called the California Gold Rush. The discovery of this gold boosted the American economy so much. In addition, the world’s largest gold mine, Carlin Unconformity, was discovered in America. Gold reserves were also found in Alaska. America now has the most gold in its foreign exchange reserves, with 800 tons.  

Discovery of Black Gold in AMERICA

In 1859, Edwin Drake discovered a new technique to extract oil from wells in Pennsylvania. It helped the US emerge as one of the major oil producers in the world. The US also benefited from the advancement of transportation technology in the 20th century. The US-based company discovered oil reserves in Iran and took advantage of them. Additionally, the US helped Saudi Arabia discover its major oil reserves. During World War II, the US and Saudi Arabia reached an agreement under which Saudi Arabia allowed the US access to its oil supplies while the US guaranteed the security of Saudi Arabia.

World War and Arm Sales

The United States avoided active participation in World Wars. The US was the major arms supplier of the Allied Powers in the Second World War, which benefited the US economy and its military industry. President Roosevelt set up a “War Production Board” and increased the defense expenditure from 1% of GDP to 40% of GDP.


The strategic steps taken by the United States, as well as its isolation from Europe, benefited it greatly. The World Wars weakened European countries, and the US gained power during these wars. In totality, other than historical factors, political strategies, oil resources, gold reserves, strategic advantages of strategic locations, weapon sales, and neo-colonialism also helped the US become a world power.

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