ABSTRACT
From one point of view the 1960s marked, as we saw in Chapter 2, the begin-ning of a new, more interdependent world economy. In particular, many firmsoperating in western Europe and the United States, and some elsewhere, began to reorganize their operations and thus improve their profitability by subcontracting some of their activities and internationalizing their production facilities. But from another viewpoint there was already a world economy in existence that was simply undergoing a process of ‘globalization’. Beginning in the 16th century, but undergoing its greatest expansion and intensification in the 19th and 20th centuries, a world economy had evolved out of more localized economic systems. As it has become progressively more integrated, covering ever wider geographical areas and more and more economic activities (resource extraction, capital investment, trade in manufactures, services, etc.), it has undergone shifts in its mode of operation, as well as shifts in the relative importance of different world regions (Figure 3.1). Viewed in this larger historical context, the changes beginning in the late 1960s are the most recent manifestation of this evolutionary process.
