Page 151 - Global Political Economy_Understanding The International Economic Order

CHA PTER S IX
larly notable in the rapid advances of the Pacific Asian electronics
industry in the 1980s and early 1990s, where the effects of technolog-
ical developments changed the international division of labor. In the
final decades of the twentieth century, the developed countries, espe-
cially the United States, were becoming service economies, or “postin-
dustrial societies,” based on the creation, processing, and distribution
of information. To speak of the United States as a service economy
does not mean, as many Americans feared during the late 1980s, that
the United States was becoming a nation of hamburger flippers; nor
does it mean that services displace production of consumer and other
types of goods. The advent of the service economy means that such
services as information-based services are a growing input into the
production of hard goods; these inputs make it possible to produce
more and higher quality goods. The nature of manufacturing is
changing and reducing employment in the traditional manufacturing
sector at the same time that the volume of manufacturing output is
increasing. 19 In the late nineteenth century, a similar transition oc-
curred as the agriculture-based society shifted to a manufacturing-
based society and industrialization transformed food production.
At the same time that the advanced industrial countries are becom-
ing service-oriented economies, more traditional manufacturing is
moving to the less developed countries of Pacific Asia and, to a lesser
extent, to other parts of the world previously known as the Third
World. Many developing nations shifted by the end of the century
from being primarily commodity exporters to becoming exporters of
manufactured goods. Unfortunately, however, this development was
accompanied by increasing polarization between those rapidly indus-
trializing economies that could take advantage of ongoing technologi-
cal changes and the large majority of less developed countries that,
for one reason or another, were unable to adjust to the technological
revolution.

Restricted Access to Leading Technology
The new theories differ from neoclassical theory in the extent to
which they assume that technological innovation can be appropriated
or monopolized by an innovator. Neoclassical economics assumes
that technology is a public good equally available to all firms; that is,
that technical knowledge cannot easily be monopolized. Every firm

19
Geza Feketskuty, International Trade in Services: An Overview and Blueprint for
Negotiations (Cambridge, Mass.: An American Enterprise Institute/Ballinger Publica-
tion, 1988).
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