Jürgen Heinrichs

2 – Western Europe's Economic Development and the NIEO*

Publisher Summary This chapter discusses Western Europes economic development and the NIEO. The development of the market economy since the middle of the 1960s, and the corresponding development of the West European economic and social structure, has been characterized by far-reaching changes. The most striking features of these changes are the emergence of a worldwide labor market and a world market for production sites. Both of these are connected with the development of a new international division of labor. These structural changes in the world economy have been triggered by a new set of conditions for investment, the outcome of economic development up to this point. This new set of conditions includes a practically inexhaustible worldwide reservoir of cheap labor, located primarily in the developing countries; new technologies in the areas of transport, organization, and communications; and changes in the production process itself, including the possibility of dividing production into a series of sub-procedures. It is precisely these technological developments that have rendered the reservoir of cheap labor usable.