The US economy

The American economy is a dynamic system that is constantly evolving out of the choices and decisions made by millions of citizens who play multiply, often overlapping roles as consumers, producers, investors and voters. By any standard, the American economy has been immensely successful. With less than 5 percent of the world's population, the United States in the early 1990s produced about 25 percent of the world's output. The U.S. economy is more than twice as large as the next largest economy, that of Japan. By conventional measures, U.S. productivity and standard of living remain among the highest in the industrial world.

Although the American economy has transformed itself over the years, certain issues persisted since the early days of the republic. One is the continuing debate over the proper role for government in what is basically

a market economy. Another recurrent theme has been the transformation of the U.S. economy by emerging technologies. Beginning in 1870 and lasting for around a century, the United Stated became the world's manufacturing power-house — leading the world in the production of steel, automobiles and other products. Since the 1960s, another transformation has been taken place, as new service-based and information-processing industries gradually replace some of the old stalwarts of the traditional industrial base. By the 2000s, advances made in such fields as chemistry, electronics and biotechnology were producing goods and services ranging from semiconductor circuits to laser surgery. Similarly, new farming technology has transformed the American agricultural sector, allowing more food and fiber to be produced by a constantly dwindling number of farmers.

The third theme has been the continuous debate over international trade policy and, thus, over the degree of the United States integration into the world economy. Each of these themes underscores certain fundamental characteristics of the American economy. First, it is changing continuously, as citizens freely express their economic preferences directly in the marketplace and indirectly in the voting booth. At the same time, the Americans accept an important role for government to help create an environment with the widest possible opportunities for individual opportunity, and economic growth and progress.

The UK economy

Great Britain has an open economy, in which foreign trade plays a vital part. About one-quarter of its gross domestic product comes from the export of goods and services, a high share among major economies. Private enterprise accounts for three-quarters of gross domestic product and over two-thirds of total employment. Services now account for 60 percent of gross domestic product and manufacturing for about 25 percent. Britain is among the largest exporters of steel, chemicals, aircraft and satellites, textiles and clothing, financial, business and other services.

The keynote of government industrial policy is to encourage enterprise. Competition policy seeks to promote market efficiency where this is not achieved solely by market forces. A substantial privatization program has encouraged share ownership. It has also involved the privatization of a number of major businesses including British Airways, British Gas, British Telecom, and the water supply industry.