Western and Japanese Dominance Decline

Western and Japanese Dominance Decline

Instructions:

Western and Japanese Dominance Decline

Discussion 12

Over the last couple of weeks, we’ve looked at significant changes in the international political economy with the traditional centers of industry and power, North America, Europe, and Japan having to compete and contend with emerging markets, e.g., China, India, and Brazil. In terms of the future of economic leadership, what are your predictions? Do you see continued Western (and Japanese) dominance or will we shift to a new global balance?

QUIZ FROM THE READINGS

Although the post-World War II era witnessed increased industrialization and prosperity for some parts of the world, i.e., North America, Europe, Japan, and parts of the Pacific Rim, much of the world remained poor and underdeveloped. The relationship between the so-called global North and global South (or First World and Third World) was and continues to be complex and in many ways exploitative. Describe some aspects of this relationship and its consequences, especially for the developing world (see Stearns Chapter 13).

By the 1970s both the United States and the Soviet Union (along with its East European satellites) were experiencing severe economic challenges, but for different reasons. Outline these respective reasons and the outcomes, i.e., what changes occurred in the US and in the Soviet Union and Eastern Europe in the 1980s (See Stearns Chapter 14)?

FROM THE LECTURE

What are some factors that explain why some countries are rich and what are some factors that explain why some countries are poor?

Compare and contrast two theories of development.

chapter 13

Economic development experts (including both modernization and dependency theorists), politicians, and large segments of the general public became accustomed after 1950 to thinking of a world economically divided in two: there were industrialized societies, and there were others—underdeveloped or developing. A society either had it or did not. Other terms came into play. Third World was initially a Cold War concept that identified societies that were permanently aligned neither with the West (capitalist democracy) nor with the Soviet bloc (communism). But because most Third World countries were also not completely industrialized, the term survived the Cold War and came to mean simply “underdeveloped.” In the 1980s the North-South dualism became popular: North meant industrial, and South meant mainly the nonindustrial Southern Hemisphere, but also Northern Hemisphere nations where great poverty persisted and industrialization seemed to lag, such as those on the Indian subcontinent.

The dualistic distinction accurately described one definable gap: some parts of the world had experienced an industrial revolution or, like South Korea, were clearly in the process of experiencing one, and some parts had not. Industrialized countries had, by definition, more manufacturing, more advanced technology, and (except for Eastern Europe) higher living standards on average than less industrial ones. Beyond this real but rather gross distinction, however, the Third World label was almost completely misleading in implying some uniform, barely changing condition for the world’s population that lived in so-called nonindustrial economies.

After 1950 there were, in fact, two major trends operating in many parts of the world in which a full industrial revolution had not occurred. The first trend continued a theme that had been present from the onset of the industrial revolution in Britain: significant economic change occurred on the basis of economic penetration by industrialized areas in search of resources, markets, and labor. Increasingly, penetration now involved the operations of multinational corporations seeking not only raw materials but also low labor costs and soft environmental regulations.

The second trend, however, involved the ability of many nations to regain some control over their economies, sometimes including the development of a more vigorous industrial sector. A number of regions combined elements of both trends: that is, they were still open to exploitation but they also undertook significant new initiatives. Changes in status added to complexity. By the late twentieth century a few African countries, such as Uganda and Botswana, were achieving substantial manufacturing growth, without, as yet, clearly moving to a full industrialization process. The boundary lines between types of economies were both complex and fluid.

The Long Reach of the Industrial Powers

In 1992 the U.S. Department of Labor charged several American clothing manufacturers with major abuses of factory workers on the Mariana Islands, an American protectorate in the western Pacific 1,500 miles from the Philippines. Subcontractors producing men’s clothing for some stylish American brands had for years been importing workers from China and the Philippines, putting them to work in sweatshops with sewing machines but few amenities. The workers were compelled to labor eleven hours a day, seven days a week, for a salary of $1.50 an hour. Any hint of discontent or lack of discipline was controlled by the threat of sending the worker’s home.

Effectively, forced labor had long been a concomitant of the industrial revolution. In the first phase, it had been a feature in the West—the orphan gangs recruited in Britain, for example. Later, new systems of forced labor spread to other parts of the world where, even after the abolition of formal slavery, cheap workers seemed essential for producing volumes of low-cost goods. Here, the system had initially been applied mainly to foods and minerals, but even by 1900 it was extending to factory industries in which the equipment was relatively simple, as in rope making on the Yucatán peninsula of Mexico. Clearly, this type of extension was alive and well in some parts of the world in the late twentieth century, as mechanization was combined with abusive labor controls to keep costs down.

Exploitation of nonindustrial areas to serve needs in the industrialized societies persisted in the late twentieth century, although its dimensions changed somewhat. On the one hand, exploitation was encouraged by the sheer growth of the industrial sector in Western Europe, the United States, Japan, China, and the Pacific Rim. Industries needed more raw materials than ever before.

The search for cheap labor was intensified by improving wages at home, by government-enforced welfare programs that increased the cost of domestic labor still further, and by the slowing rate of population growth in most of the industrial world, which inevitably increased competition for workers. At the same time, population explosions in much of Asia, Africa, and Latin America extended the possibility of finding workers whose desperation would drive them to accept abusive conditions. The workers recruited for the Marianas sweatshops resisted being sent home because finding jobs in the Philippines amid rapid population growth was so difficult. It was small wonder that many of the unequal relationships between industrial and nonindustrial economies endured or even expanded after 1950.

On the other hand, there were two new constraints, at least in certain areas, that complicated the simplest kind of exploitative relationship. First, political independence—resulting from decolonization and, in the case of Latin America, increasingly effective governments in nations that had long been nominally independent—enabled many regions to drive back foreign economic intervention by force of law, or at least to regulate it. Governments in several Latin American countries, including Chile and Cuba, were able to take over foreign concerns (such as American-owned mines and plantations), encouraging local management and in certain cases improving the conditions of labor.

Second, in some of these same areas considerable local industry, building on the more halting expansion of manufacturing developed before 1950, reduced the need for massive imports of standard manufactured items from the West or Japan. Even in this area there was significant change. Some high-technology imports now came from places such as Brazil, which specialized in producing computers that could operate amid frequent disruptions to electrical power. But also new competition came from countries such as China, where rapid industrialization and low prices cut into manufacturing possibilities in many other parts of the world, sometimes exacerbating high rates of unemployment.

More than in the previous two periods of the world’s industrial history, then, relationships between industrial and nonindustrial regions varied greatly. Many areas, though still lagging behind in outright industrialization, pulled away from the starkest kind of inequality; others seemed locked into the more familiar dependency and even faced growing poverty.

Resource Producers: Some New Bargaining Power

Fortune clearly turned in favor of the oil-producing regions of the Middle East and North Africa after 1950. Industrial needs for oil expanded steadily. Western Europe and Japan depended heavily on Middle Eastern oil; the United States also came to rely on Middle Eastern imports for a growing percentage of its petroleum needs. At the same time, Middle Eastern nations won new political independence.

There were attendant problems. Internal strife made considerable foreign manipulation still possible. For example, an Iranian effort in the 1950s to seize Western oil companies was thwarted by an American-engineered political coup. Further, intense national rivalries complicated decisions about oil in the region. By increasing reliance on the industrial nations for arms supplies, military buildups led to a new version of economic dependency. Nevertheless, the Middle East oil states steadily amassed gigantic revenues and simultaneously gained increasing control over their national oil policies. Many Western companies were nationalized; others were heavily regulated.

In 1961 Iran, Iraq, and Saudi Arabia took the lead in forming the Organization of Petroleum Exporting Countries (OPEC) to improve their coordination of price and production policies and to reduce the market voice of the industrial importers. OPEC included members from other regions, notably Venezuela, Nigeria, and Indonesia, but it was primarily a Middle Eastern/North African entity. Finally, because decades of experience had produced not only increasing political acumen in dealing with the West but also a growing body of technical expertise, Arabs and Iranians could, with at most modest advice from Western technicians, run the oil fields themselves.

The altered relationship between the Middle East and the industrial regions was illustrated dramatically by the two oil crises of the 1970s. In 1973 OPEC cut oil production in order to force a substantial price increase. Western economies suffered as the vital fluid of modern industry drained away; huge gasoline lines formed at service stations in the United States and Western Europe. Oil prices rose in response, and OPEC won a signal victory. A second, less deliberate oil crisis occurred in 1979, as revolution in Iran and then warfare between Iran and Iraq reduced the oil flow again.

The leading oil producers also developed a version of an industrial economy based on oil while investing some of their growing earnings in other parts of the world. Saudi Arabia and the small states of the Persian Gulf expanded their major cities, building huge refinery centers that combined advanced technology with hundreds of thousands of workers imported from other parts of the Middle East and Pakistan (up to 80 percent of the labor force in some instances).

Modern transportation and communications facilities developed, along with technical universities. By 1980 the annual development budget of Saudi Arabia had reached $70 billion. Industry continued to focus on petroleum refining, and it remained uncertain whether a wider industrial base would emerge; many Gulf states continued to have less than 10 percent of their labor force in manufacturing, the bulk being in service sectors (including finance) and construction. Nevertheless, with most of the population living in cities and a substantial foreign labor contingent, the oil-producing states of the Gulf had parlayed their special wealth in a vital resource into a version of an industrial economy. Unusually abundant resources and use of advanced technology assured other resource exporting regions of considerable economic bargaining power, even outside the oil-producing areas.

Australia maintained an essentially industrial standard of living on the basis of agricultural and mineral exports and substantial local industry; it had become Japan’s largest resource supplier, turning increasingly to China by the early twenty-first century. As in the Gulf states, efficient production of resources made possible substantial earnings from industrial importers. Dependence on resource exploitation by no means uniformly meant poverty and constraint.

Other combinations could succeed without full industrialization. Chile became one of Latin America’s most successful economies, with some factory industry but also substantial reliance on mineral and agricultural exports. The country used its Southern Hemisphere growing cycle to produce vegetables and fruits for places such as the United States and Japan during their winters. It also developed a massive salmon-farming program, making it the world’s second-largest exporter in this category. All of this reflected substantial change, but it also showed again that there was no single path in global industrial economy.

Patterns of Dependency

Yet benign relationships were not the whole story. A number of parts of Africa and some in Latin America continued to depend so heavily on Western purchases of raw materials that they imposed few effective controls. Even after independence from Belgium, for example, Zaire (the former Belgian Congo) continued to be dominated by Western mining concerns.

The most abusive labor practices were modified, but African miners still received low pay amid rigorous working conditions. Expanding the exploitation of copper and uranium brought profits to the Western companies and some wealth for local businesses and politicians, but little improvement in living standards or funding for a larger program of industrial development. Several Caribbean and Central American countries continued to find it difficult to shake loose from cash-crop dependency, supplemented in some instances by foreign tourism. Efforts to diversify sugar economies, even in revolutionary Cuba, won scant success. Sugar was overproduced on the world market; overproduction led to declining prices and continued economic marginality for many of the sugar-growing regions.

A few dependent areas sought to diversify their exports to the industrial West by growing illicit drugs, in what was, in fact, a variant of the classic cash-crop export. Impoverished Bolivian and Ecuadoran peasants produced opium, which was then handled by a small number of high-living local merchants, whose profits soared without much wider impact on the regional economy. Dependency also showed in the growth of child labor in southern and southeastern Asia, where 6 to 8 million child workers were added between 1980 and 2005. Even when rates began to drop in this region, many children were still exploited for their low costs in traditional industries facing global competition, or even sold into sex-trafficking networks. Dependency showed, finally, in the rapidly growing rates of unemployment and underemployment, particularly for younger workers, in many parts of Africa and the Middle East, especially the regions that lacked substantial oil reserves. As the industrial demand for resources and tropical crops continued, expanding the need for low-paid wage labor in many parts of Africa and Latin America, these same regions continued to rely heavily on the import of industrial goods from other areas. Even some oil exporters like Nigeria, once prices stabilized again in the 1980s, found that their need for equipment imports exceeded their capacity to pay—an imbalance that created heavy foreign debts that further constrained the national economy.

Thus, elements of the industrialized world’s advantage over many resource-producing areas endured in a pattern that had been sketched in the early decades of Europe’s industrial revolution. The greatest innovation in this relationship after 1950 involved the increasing quest by American, Japanese, and European firms for cheap labor in factory industry. Appliance manufacturers, electronics firms, and other businesses established branch factories in many parts of the world with the primary objective of re-exporting products back to the industrial regions.

In a few instances, assembly plants also issued goods for local consumption and thus reduced the transport and tariff costs of shipments from the industrialized world. More commonly, however, the expansion factories looked for cheap labor (much of it female) in regions where population growth had generated endemic underemployment and scant bargaining power.

These companies prized inexpensive or nonexistent benefit programs and, in some instances, loose environmental regulations. They thus sought a basket of advantages that would enable them to undercut the costs of production in the United States, Europe, or Japan. They expanded the geographic range of modern technology and the factory system in the process (major change was involved in the receiving areas) but not necessarily with any intent to generate a full range of industrialization.

A variety of areas were drawn into factory industry on this basis, including parts of North Africa, the Caribbean, Indonesia, Vietnam, and Pacific Oceania. One of the most striking examples was along Mexico’s border with the United States, where a maquiladora industry (the term refers to fees millers charged for processing grain into flour) expanded dramatically from the 1980s onward. Hundreds of foreign firms, mostly from the United States, set up assembly factories in northern Mexico, transforming regions around cities like Juarez (the border town next to El Paso, Texas) in a fashion reminiscent of a true industrial revolution. Thousands of workers were drawn in, 85 percent of them young women between the ages of fifteen and twenty-four. Industrial refuse was in many cases released without precaution and created barren wastelands behind many factories and amid worker housing.

As in earlier interactions between industrial economies and other regions, an exploitative relationship brought some benefits in its wake. A growing number of Mexicans learned factory skills, extending Mexico’s own growing industrialization. Wages, though low, brought vital relief to some families amid massive underemployment. At the same time, the spread of industrial operations under foreign control spelled only limited benefits for the host countries. Most of the profits were often exported rather than reinvested locally, and the larger impact of the search for additional labor outside the industrialized world itself was extremely difficult to calculate.

As in the early days of industrialization elsewhere, many employers blatantly intimidated workers, encouraging the government to arrest potential union leaders and firing dissidents. Overall, only 15 percent of maquiladora workers were unionized. Observers in Mexico and elsewhere debated the long-run consequences of this new industrial growth, which some claimed simply institutionalized poverty. What was clear was the transformative impact industrialization could still bring to bear, changing the lives of thousands of families and the physical face of whole regions when it was exported to new locales.

Variety and Inequality

Very few countries failed to generate some growth in factory industry after 1950, even if they remained very poor because of extensive foreign commercial penetration and/or extensive sectors still rooted in a traditional economy. Newly independent African nations such as Ghana and Nigeria embarked on a process that they called “indigenization,” in which foreign ownership was discouraged in favor of local business interests.

This process had some results similar to those generated by the earlier policy of import substitution in places such as Iran and Brazil, spurring some factory industry to produce consumer goods for the national market and thus replace the import of foreign textiles, metal products, construction goods, and the like. Most African economies continued to depend on the import of more complex equipment. Correspondingly, most also promoted the export of cash crops and natural resources, including oil in the case of Nigeria. Finally, most included pockets of traditional village agriculture fairly remote from world commerce and modern technology, save for a few bicycles, an occasional truck, and some radios. A few African nations that were resource-poor actually reduced their commitment to a commercial economy. Most, however, including leaders such as Nigeria and Kenya, displayed the typical elements: growing local manufacturing that featured power technology and fairly typical factory conditions; encouragement to produce exports, in search of the vital foreign exchange needed because of continued dependence on foreign technology; and important traditionalist remnants. By the 1990s a few countries, such as Uganda, were generating more rapid expansion in the factory sector.

14

The established industrial societies in the 1950s were centered in North America, Western Europe, Australia/New Zealand, Eastern Europe, and Japan. All began to generate explosive further industrial growth during the 1950s. The results followed many of the lines set by the previous industrial revolution: extensions of new technologies, the introduction of new products, more sophisticated organizational forms. But sheer expansion created some novel results. Further, it became increasingly apparent—by the 1960s and 1970s—that more fundamental changes were occurring as a new generation of industrial technologies seized center stage. These, too, had widespread social effects, altering yet again the definition of industrialization’s wider impact.

Amid both growth and change, the balance among the established industrial sectors shifted. Western Europe displayed unexpected new vigor, and Japan surged to the top for the first time. For several decades, the growth of advanced industrial countries outstripped efforts in places such as Brazil and China, causing some experts to bemoan the growing global gap between rich and poor. By the 1990s, however, the tide had turned, and questions now focused on how mature industrial societies would react to the surge of new industrializers that, in many ways, seemed capable of outcompeting them in many sectors.

Growth Rates

Between 1960 and 1990, manufacturing output in the United States more than doubled, growing by 134 percent—the lowest growth rate of any major industrial nation outside the communist bloc. Manufacturing in Canada expanded 137 percent, in Britain 195 percent, in Sweden 200 percent, in Germany 226 percent. Other European countries tripled or quadrupled their output—France by 323 percent, Italy by 375 percent. Japan, in its own league, posted an almost sevenfold increase: 666 percent.

These were astonishing rates by any historical standard. Population increased also, but because output more than outstripped this growth, per capita productivity soared, even in the slightly laggard United States. Several European countries during the 1950s and 1960s saw their gross national product increase by 8 to 10 percent annually; France and Italy, in particular, greatly exceeded their dynamism during the earlier industrial revolution phase. Growth slowed somewhat during the 1970s as a result of two sharp crises induced by a shortage of petroleum from the Middle East, but performances continued to improve overall, and there were no catastrophic depressions like those of the 1870s and 1930s.

Eastern Europe participated strongly in the industrial boom of the 1950s and 1960s. Growth rates in the Soviet Union were reported at 8 to 10 percent per year, about on a par with the most rapidly expanding areas of Western Europe and ahead of the United States. Indeed, a Soviet leader in the 1950s stated to an American audience, “We will bury you”—claiming that the Soviet economy was on the verge of beating the United States at its own industrial game.

This boast turned out to be greatly exaggerated, but the industrial surge was impressive even so. Major technological gains included the world’s first and most successful space program. By the late 1970s Soviet industrial output was about seven times greater than it had been in the late 1940s. Throughout Eastern Europe employment in agriculture dropped as a result of further agricultural modernization; this drops freed additional workers for industry. Strong state investment focused on spurring heavy industry.

Some East European regions that had long lagged behind began now to catch up, completing their industrial revolutions and seeming to move forward beyond the minimal industrialization level. In Bulgaria, for example, per capita manufacturing production increased fivefold between 1950 and 1970. Industrial output in Romania rose 120 percent from 1963 to 1970. These gains did not generate the same levels of prosperity that prevailed in most of Western Europe, and they did not match the Japanese explosion, but nevertheless they were significant.

In Western Europe and the United States, rapid industrial expansion often occurred in regions different from the previous centers of factory industry. Coal mining and textiles continued to decline, leaving troubling industrial backwaters in places like northern England and Appalachia. Even in Japan some previous metallurgical centers suffered. But the decline of older centers was more than balanced by the advance of petrochemicals, electronics, and heavy consumer goods such as automobiles and appliances. Regions that were particularly appropriate for some of these newer industries, such as the Silicon Valley computer cluster near San Francisco and the London region in England, surged forward.

There were several causes of this new round of rapid industrial growth, though of course they varied somewhat from one society to the next. Rising military spending played a role in stimulating armaments industries and aeronautics in the United States and the Soviet Union. In general, further improvements in agricultural methods freed labor for industry while creating new consumer spending in the countryside. Greater use of mechanical equipment, particularly notable in Western Europe, brought a rapid reduction in the size of the rural labor force, along with lower food costs. France’s rural population, for example, declined from 16 percent of the nation’s total in 1950 to 6 percent by the 1980s. French sociologists wrote of a “vanishing peasantry” not only because of its falling numbers but because of its new fascination with maximizing market production and with mechanical efficiency. Although European agriculture remained somewhat more costly than that of North America, the industrial revolution had definitely come to Europe’s countryside.

New government policies stimulated economic growth. The Japanese government resumed its careful planning and coordination, operating in close harmony with business leaders. The state set production and investment goals while lending public revenues to encourage research and capital development projects. The government also reduced the population pressures that had afflicted prewar Japan by actively promoting birth control and abortion; Japan’s population growth slowed to essentially the same levels as in Western society and the Soviet Union.

The government also sponsored technological research in state laboratories and carefully developed foreign trade policies designed to spur exports. By the 1970s Japan was turning out more engineers than many larger nations such as the United States—the result of ongoing government interest in promoting education. Overall, Japan’s orchestration of cooperation between government entities and leading business giants prompted the half-mocking, half-envious label from the West, “Japan, Incorporated.”

Government policies shifted rapidly in Western Europe, though they fell short of Japanese coordination. West European governments late in the 1940s made a fuller turn toward the welfare state, providing state-sponsored health programs or health insurance, payments to families with numerous children, and a host of other benefits such as the construction of low-cost housing. Canada, Australia, and New Zealand also expanded their welfare provisions. Many programs were financed in part from tax revenues, which offered some cushion for those most poorly paid. Not all welfare programs worked well, and some drew protests from various groups. On balance, however, the European welfare state won great popularity. It helped integrate certain groups, notably from the working class, more firmly into the national political structure. It reduced the worst material misery as well, and, by providing some income floors for the poorest groups, stimulated consumer demand. At the same time, many European governments complemented the welfare state with an active planning effort. Various sectors were nationalized outright; most states, for example, took over the railroad system and improved its efficiency.

More generally, planning mechanisms aimed to stimulate industrial growth in backward regions and spur more rapid technological development. France went furthest here, establishing a national planning office, the Commissariat du Plan, in 1946 to steer capital toward economic sectors deemed significant for long-term growth. Private enterprises remained free to run their firms as they saw fit, but the French government used its powers to guide investment and credit. Not all European governments moved quite so far. Germany, for example, emphasized market competition as an alternative to its statist experience under Nazism. All governments undertook planning, however, and the impressive economic growth rates suggested that the initiatives were paying off.

Government planning in Eastern Europe was by far the most extensive because the Soviet system of a command economy, directed by the central government, was spread to the new communist regimes in the region. State planning committees allocated resources, set prices and wages, and determined production goals. After 1968, certain governments, as in Hungary, modified this rigid planning by providing some autonomy to individual enterprises. By this point some suspicion was developing that rigid state planning—effective in mobilizing resources for early industrialization—perhaps was not best suited to further development. Major changes in direction, however, occurred only after the industrial collapse of the region in 1985.

Only the United States did not extend new government measures in any systematic way, though increased military spending involved the government more heavily in economic issues than ever before. Welfare programs did not greatly expand, though there was some growth in the late 1960s. The United States was also unique in having no economic planning office, though the Federal Reserve Board coordinated fiscal policy in the interest of economic growth. The lack of major U.S. policy initiatives seemed irrelevant in the 1950s and 1960s, when economic demand was fueled by rising wages and high consumer expectations. As growth eased in the 1970s, many experts began to urge a shift in the American policy framework, but without major results into the 1990s.

Diplomatic shifts contributed to the industrial surge. The active foreign policy of the United States, including various international gifts and loans, helped stimulate U.S. exports, particularly in the 1950s and 1960s. The United States also participated in a number of international efforts to lower tariff barriers, and trade among the industrial nations increased in part as a result of these initiatives.

The Soviet Union built a separate economic bloc with its East European satellites, which helped coordinate exports and resource allocation within the bloc. In the long run the isolation of the communist economic grouping reduced the flow of technical information necessary for a vigorous economy, but in the short run certain industries were aided by easier access to resources such as the Soviet Union’s vast petroleum supplies.

The greatest shift in market policies occurred in Western Europe with the formation, from 1956 onward, of the European Economic Community, or Common Market. This group, ultimately embracing most of the European nations, progressively reduced trade barriers internally—gradually creating the world’s wealthiest total market. Full economic unity was proclaimed in 1992, but well before then the Common Market (now called the European Union) had helped stimulate internal economic growth.

Rapid industrial growth in the established industrial areas had several major consequences. First, it greatly increased the standard-of-living gap with most of the rest of the world. Even regions that improved their economic performance, such as India, saw themselves falling further behind the material levels of the industrial zones. Only an outright industrial revolution, as in South Korea, enabled a nation to catch up at all.

Within the industrial societies, rapid economic growth paid off in improvements in living standards. Consumer goods remained scarce in Eastern Europe; there were long lines for many items and products were often shoddy. Nevertheless, growth had some impact. Eastern-bloc countries such as Hungary fared particularly well; by the 1980s one family in three had a private car in Hungary, well below Western levels but a thirtyfold increase in the nation since 1960. Many people in the communist nations also enjoyed improved vacation possibilities because of state-organized resorts in such areas as the Black Sea coast.

Japan made a clearer turn toward a real consumer economy, though this evolution was slowed by its lower economic level in the 1950s and by state policies and personal habits that promoted high rates of personal saving over spending. Inflation by the 1980s further limited buying power, even though wages were rising considerably. Basic items such as food and housing remained expensive. Even so, Japan’s standard of living grew close to Western levels by the 1980s. Purchases of a variety of consumer goods, including appliances and automobiles, increased steadily. By the 1980s over half of all families had cars, and 95 percent had washing machines and refrigerators. A joke as early as 1970 described the “three sacred objects” in Japanese society as a color television, a car, and an air conditioner. Huge department stores were by this point providing an immense variety of standardized goods, including cameras, audio equipment, and other delights of a high-tech consumerism in whose production Japanese factories participated strongly.

Western Europe became a consumerist paradise as living standards in some countries, such as Germany and Switzerland, pushed beyond those in the United States. Ownership of automobiles, televisions, and a variety of household appliances became commonplace. Many French homes were filled with gadgets. At the same time, vacation time increased, reaching an average of five weeks a year for many groups. Europeans swarmed to the sunny beaches of Spain and Italy from the 1960s onward, ventured widely into Eastern Europe and parts of the Middle East, and began to visit the United States and Latin America in increasing numbers, as a memorable vacation became one of the hallmarks of the European version of mass culture in an affluent age.

Structural Changes: The Postindustrial Thesis

Sheer growth had an obvious impact, but the advanced industrial economies also introduced some important new features. The United States and Western Europe led the way in these advances, but Japan was quickly engaged as well. The Soviet Union and its satellites lagged, more rooted in an earlier version of the industrial economy.

As always, a series of technological changes lay at the heart of the new economy. The development of automatic circuitry helped reduce the hands-on labor necessary on certain kinds of assembly lines. New materials, such as plastics, could be automatically poured into molds. Supervising automatic processes, workers in many petrochemical plants became more like technicians than workers in the traditional style of factory industry. The creation of computers soon added an even more powerful innovation. A German engineer, Konrad Zuse, had devised an electromagnetic computer before World War II, but American firms, headed by IBM (International Business Machines), led in further development during the 1940s and 1950s. Huge computers began to be installed for information processing. The transistor, a major advance by Bell Laboratories in 1948, greatly improved the reliability of computers and cut their size. Accounting, inventory control, and other procedures began to be computerized. The technology was applied to manufacturing processes as well. The development of robotics, from the 1960s onward, replaced many assembly-line workers with machines that could perform repetitious processes like drilling and assembly. By the 1980s 20 percent of French industry and about 10 percent of American manufacturing depended on robots. Finally, genetic engineering began to have a tangential effect on manufacturing in the 1960s; the emphasis was less on new manufacturing methods than on new products, including new medicinal drugs, but some genetic technology also operated under the supervision of technicians rather than machine-aided manual laborers.

The new technologies lay behind a host of new products, including sophisticated sound equipment. More importantly, they spurred greatly increased productivity that reduced the need for blue-collar labor. The manufacturing labor force reached its peak size in the 1950s in the United States and Western Europe and then began to shrink—a reversal of one of the staple trends of the industrial revolution. Many hardships resulted from the displacement of workers in industries like steel and automobiles; they were the victims of increasingly automated technology as well as, in many cases, heightened foreign competition. But employment in the service sector grew rapidly, and these jobs by the 1950s commanded a full half of the labor force in the West. This trend had begun in the late nineteenth century, but it now reached new proportions.

The typical worker was an employee in insurance, government, a hospital, a school, an office, or a hotel or restaurant. Some of these service jobs were attractive and gave people upward mobility from the working class. A fourth of the traditional French working class moved up to white-collar work during the 1950s. Canada’s labor force included a 46 percent share for service workers by the late 1950s, many of whom had come from farm or working-class backgrounds. But low-level service jobs also were created in fast-food restaurants, custodial services, and security jobs.

Associated with the new technologies were some changes in management. Corporations continued to grow. In 1940, for example, the top 100 companies accounted for 30 percent of all manufacturing in the United States; by the 1950s the figure was nearly 70 percent, as a host of new mergers swallowed smaller competitors and as government purchasers during the war had favored big business. In Western Europe many old-line manufacturing families died out or were displaced because of dubious activities during the Nazi years. The giant Krupp firm, for example, shifted away from tight family control. A new breed of managers from middle-class backgrounds and with substantial technical training came to the fore. These people were friendlier to business–government cooperation and to long-range planning than their predecessors had been, and they worked also to stabilize labor relations. New technologies supported a growing emphasis on abilities to master information and use specialized knowledge; some observers argued that the control of knowledge was replacing the control of property as the cornerstone of the industrial elite. Japanese management changed less than its West European counterpart, but it worked more consistently to foster careful relations with labor than had been the case before the war. Efforts to ensure about 50 percent of the labor force lifetime job security and to consult workers about potential improvements in methods showed a more effective use of Japan’s tradition of group spirit than in the prewar years.

Some authorities contended that new technologies and management forms added up to a decisively new economy; they heralded a postindustrial revolution and argued that it was as sweeping in its implications as the industrial revolution before it. They pointed, of course, to the shift away from manufacturing jobs and from traditional management styles. They also predicted that with robotics and computers the nature of work would shift. Products would become more individualized. Work would be decentralized, even located in the home, and supervision would accordingly lighten. Time constraints would decrease because workers could log on to their computers whenever they desired.

These were interesting visions, but they did not, in the main, accord with reality. Most service jobs became more, not less, routinized. New equipment enabled management to speed up the work of secretaries and bank personnel; work tensions increased in many cases. Supervision could be enhanced by computer checks. And although jobs did move away from center cities and the traditional factory declined in importance, group work settings continued to predominate. New management did not necessarily mean a new freedom from regimen. An American oil company’s recruiting pamphlet noted that “personal views can cause a lot of trouble” and suggested that moderate or conservative ideas were preferred. Airlines trained flight attendants to smile courteously at all times, suppressing their emotions; annoyance, their personnel authorities urged, was bad not only business but also for one’s health. Growing conformity and coordination at work increased for many people, and this new age in many respects constituted an intensification, although in new forms, of work trends that had been associated with the industrial revolution from the outset.

Western and Japanese Dominance Decline

RUBRIC
Excellent Quality 95-100%	Introduction 45-41 points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.		Literature Support 91-84  points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.			Methodology 58-53 points Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met.
Average Score 50-85%	40-38 points More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided.		83-76  points Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration.			52-49  points Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met.
Poor Quality 0-45%	37-1 points The background and/or significance are missing. No search history information is provided.		75-1 points Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration.			48-1 points There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met
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