Page 196 - Global Political Economy_Understanding The International Economic Order

SYS TEMS O F POLI TICAL ECONO MY
the most attractive locations in the global economy. 53 Moreover, it
recognizes that governments cannot pick winners and that the choice
of technologies must be left upto the private sector. According to
this concept, however, governments should be active and should not
leave matters to the market alone. As Vincent Cable has pointed out,
a “competing nation” attempts to strengthen the position of its firms
in the global economy and attract foreign investment through cre-
ation of a pool of highly educated, flexible workers, an efficient physi-
cal infrastructure, sound economic policies, and an attractive quality
54
of life. Such a competition strategy has been employed effectively by
Singapore and has been adopted by Britain, Ireland, and other coun-
tries; Germany is also moving in this direction. However, another
significant example of a successful competitive state is the United
States. In 1980, for example, responding to fears of deindustrializa-
tion, the Congress passed the Bayh-Dole Act that, for the first time,
permitted universities to patent the results of federally funded re-
55
search and to license those results to private firms. Subsequent legis-
lation has strengthened this corporate-university alliance as a key ele-
ment in America’s competitive strategy in the area of high-tech
industries. Many observers, however, do fear this could prove harm-
ful to the universities over the long term.

Convergence, Harmonization,
or Mutual Recognition?
There are several possible solutions to problems engendered by na-
tional differences that have created obstacles to the smooth function-
ing and full development of the global economy. Differences could be
eradicated or moderated either through the functioning of the market,
as neoclassical convergence theory suggests, or through political ne-
gotiations to achieve harmonization of national practices. The con-
vergence position requires patience, as it posits that national systems
will converge through the operation of markets in which, over time,
economic forces will cause nations to modify their economic struc-
tures and business practices. Harmonization, on the other hand, is
based on international negotiations and reciprocity leading to elimi-

53
The implications of this fact are developed by Robert Reich, The Work of Nations:
Preparing Ourselves for 21st Century Capitalism (New York: Knopf, 1991).
54
Vincent Cable, “The Diminished Nation-State: A Study in the Loss of Economic
Power,” in What Future for the State? Daedalus 124, no. 2 (spring 1995): 48–50.
55
This development and its potential dangers is discussed by Eyal Press and Jennifer
Washburn, “The Kept University,” Atlantic Monthly 285, no. 3 (March 2000): 39–54.
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