(1) When evaluating the ties of interdependence from the standpoint afforded by two concepts of economics, the division of labor (exchange) and distribution, we may identify certain shifts in policies and attitudes in the industrialized and developing counties alike. The industrialized nations have become more dependent on one another through the division of work so far. As their horizontal division of work advances, however, attention is increasingly turned to the questions of distribution of production, employment and profit. The proliferating “trade frictions” and protectionism mirror the aspiration to protect national production and employment. But they also represent a demand for justice in distribution. On the other hand, the developing countries are drawn into the relationship of interdependence primarily in the form of receiving economic assistance from the industrialized nations, or part of the fruits of the latter's economic activities, and using such assistance as input for economic development. The gradual growth of light industries in the developing countries, however, has led them to claim more benefits from the division of work (exchange) with the industrialized countries. Here is the beginning of the adjustment problem for industries in the industrialized countries. What is under way is, therefore, a shift in the industrialized nations from the division of labor (exchange) to distribution, on the one hand, and a shift in the developing countries away from distribution toward the division of work (exchange), on the other.
(2) Admittedly, these shifts are not yet complete. The division of labor among the industrialized countries (exchange) does not diminish in importance. Nor does the distribution from them to the developing countries (economic assistance). The cross influences coming from the shifts between the division of labor (exchange) and distribution in the industrialized and developing worlds form the background of intervention of “politics” into the economic relations of interdependence. Particularly after the late 1960s, natural resources supply was no longer regarded as a mere external data as it had used to be, but the “resources problem” assumed decisive importance to the fate of the world economy affecting the principles that once supported the world economic order. In the previous postwar decades, that order was sustained by the power principle; the most powerful country imposes an economic order and is strong enough to pay the cost of preserving it. Specifically, this means that the U. S. had managed the free world, and its institutional under-pinnings were the IMF and GATT. The developing nations, however, have now come to assert the principle of sovereignty, using the leverage of United Nations-passed resolutions and the resources problem. The previous balance of costs and benefits concerning the maintenance of world economic order has been lost. Further, demands for fairness and justice are implicit in the assertion of the sovereignty principle, but there is practically no hope for adjusting them with a unified international criterion. Some industrialized countries have become less competitive in the course of trade liberalization. In certain instances, they assert the sovereignty principle or its variants with respect to trade among themselves. This is the case of trade frictions between industrialized countries.
(3) The sovereignty principle is not always a source of conflict in the economic relations of interdependence. As long as it is accepted, however, it would be impossible to prevent totally the incidence of “trade frictions” and protectionism. In this sense, when the sovereignty principle is involed more strongly, the scope of international cooperation is restricted by that much. In other words, if we emphasize the sovereignty principle and discount economic rationalism or put politics forward economic rationality, we could obtain o
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