Page 23 - Global Political Economy_Understanding The International Economic Order

CHA PTER O NE
sive, extensive, or significant as many would have us believe. Most
national economies are still mainly self-contained rather than global-
ized; globalization is also restricted to a limited, albeit rapidly increas-
ing, number of economic sectors. Moreover, globalization is largely
restricted to the triad of industrialized countries—the United States,
Western Europe, and, to a much lesser extent, Japan—and to the
emerging markets of East Asia. Most importantly, many of the at-
tacks on globalization by its critics are misplaced; many, if not most,
of its “evils” are really due to changes that have little or nothing to
do with globalization.
The end of the Cold War and the growth of economic globalization
coincided with a new industrial revolution based on the computer
and the rise of the information or Internet economy. Technological
developments are transformingalmost every aspect of economic, po-
litical, and social affairs as computingpower provides an impetus to
the world economy that may prove as significant as those previously
produced by steam power, electric power, and oil power. The eco-
nomics profession, however, has been deeply divided about whether
or not computingpower represents a technological revolution on the
same scale as these earlier advances. Although the computer appears
to have accelerated the rate of economic and productivity growth, it
is still too early to know whether or not its ultimate impact will affect
the overall economy on a scale at all equivalent to that produced by
the dynamo. A growing number of economists, however, believe that
computers have an important impact not only on productivity but
also on economic affairs in general. For example, some economists
believe that the organization of and the ways in which national econ-
omies function are experiencingmajor changes in response to the
computer and the Internet. Although it is still much too early to gauge
the full impact of the computer on the economy, it is certain that
the computer and the information economy are significantly changing
many aspects of economic affairs. Most importantly, in the industrial-
ized countries, they have accelerated the shift from manufacturingto
services (financial, software, retailing, etc.). This pervasive economic
restructuringof the industrialized economies is economically costly
and politically difficult.
Duringthe last decades of the twentieth century, there was a sig-
nificant shift in the distribution of world industry away from the
older industrial economies—the United States, Western Europe, and
Japan—toward Pacific Asia, Latin America, and other rapidly indus-
trializingeconomies. Although the United States and the other indus-
trialized economies still possess a preponderant share of global wealth
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