Post Cold War Economic Competition

The end of the Cold War left the United States as the world's only military superpower. But without a pause, the contest for world power has shifted from a military contest to an economic contest among the United States, Japan and Europe. This new economic contest is unlike rivalries of the past. Until recently, trade between nations was a win-win situation: America's agricultural exports did not threaten jobs in West Germany and Japan, and imports from those countries generally did not compete with commodities produced in the United States. Eventually, however, this "niche competition" gave way to "head to head competition" (Thurow, 1992, pp. 28-29). Today's head to head competition is the result of a changing global economy in which developed countries have a nearly identical list of industries necessary to give their citizens a world-class standard of living: microelectronics, biotechnology, telecommunications, civilian aviation, robotics, and computer technology and computer software. Unlike the earlier niche competition in the global economy, the head to head

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mmunitarian capitalism" (Thurow, 1992, p. 32). Anglo-Saxon capitalism rests on the faith that industrial society actually works the way elementary economics textbooks say it does. People are free agents, moving from job to job and place to place in search of the best opportunities. Businesses exist to maximize profits and the return to shareholders. When companies cease to provide a maximum profit, the shareholders invest elsewhere into something more profitable and productive, weaning the inefficient out of the economy and supplanting it with efficient enterprises. Government intervention is almost always destructive for it tarnishes the free market. Communitarian capitalism, on the other hand, acknowledges additional factors in economic theory beyond the individual and the market. Thurow, of course, never shuns the market mechanism; he recognizes that the market is the most efficient means to determine the allocation of goods and services. However, the functioning of an economy is not just about efficiency. There are other social benefits and purposes behind an economy. A clear illustration of these other social benefits involves leveraged buyouts and corporate takeovers. Leveraged buyouts will occur only if investors
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Approximate Word count = 1488
Approximate Pages = 6 (250 words per page)