By William R. Nester (auth.)
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Additional resources for American Power, the New World Order and the Japanese Challenge
It has also been the consequence of the more or less efficient utilization of the state's productive economic resources in wartime, and . . " 7 In the 15th century, China not only had the world's largest population and territory, but it possessed such technologies as a printing press, gunpowder and ships capable of navigating the world. Yet, C h i n a remained isolated and backward while the smaller Western powers created an ever growing world economy based on trade and colonialism which eventually engulfed China itself.
In their book, Politics and Productivity: the Real Story of Why Japan's Economy Works, Johnson, Zysman and Tyson present a systematic, devastating attack on liberal theory, and its "new t r a d e " variant. 1 T h e authors argue that although markets may reflect present efficiencies, they are unable to predict future products and industries, let alone which will be most profitable and dynamic. Of course, no one can predict the future with certainty, but it is obvious which future industries and products will he dynamic cores of an increasingly complex economy.
2 2 If the assumptions on which liberal theory is based are not valid, the theory itself is questionable at best. Neomercantilism is not an abstract theory, it is a very real strategy for achieving economic development and political power. T h e strategy assumes that comparative advantage can be created and does not have to be fatalistically inherited as liberal theory maintains. Trade is a zerosum game in which one state's gains are another's loss - states accumulate wealth by r u n n i n g continual trade surpluses.
American Power, the New World Order and the Japanese Challenge by William R. Nester (auth.)