The new global market is not limited to trade in financial instruments. Indeed the world can no longer be understood as a collection of national economies. The electronic infrastructure that now ties the world together, as well as great advances in the efficiency of conventional transportation, are creating a single global economy.

The very phrase "international trade" has begun to sound obsolete. Commerce and production are increasingly transnational. More and more products have value added in several different countries. The dress a customer purchases in New York may have originated with cloth woven in Korea, finished in Taiwan, and cut and sewed in India according to an American design. Of course a brief stop in Milan to pick up a "Made in Italy" label and to leave off a substantial licensing fee is de rigeur before the final journey to New York.

Whatever the correct word for these phenomena, "trade" certainly seems an inadequate description. How does one account in the monthly trade figures for products whose "exact country of origin is unknown?" How are national governments to regulate the complexities of transnational production with anything like the firmness with which they once regulated international trade? How are politicians to whip up nationalist fervor against foreign goods when American car companies build cars in Mexico for export to Africa and pay the profits to pensioners in Chicago, and the Japanese build cars in Tennessee for export to Europe and use the income to refinance real estate in Texas?

The information revolution not only makes the microeconomy more difficult to regulate, it makes the macroeconomy harder to measure and therefore harder to control. Many of the terms we use today to describe the economy no longer reflect reality. Everyone knows, for example, that all the lights would go out, all the airplanes would stop flying, and all the financial institutions and many of the factories would shut down if the computer software that runs their systems suddenly disappeared. Yet these crucial intellectual assets do not appear in any substantial way on the balance sheets of the world. Those balance sheets, however, are chock full of what in the industrial age were called tangible assets--buildings and machinery--things that can be seen and touched.

How does a national government measure capital formation when much new capital is intellectual? How does it measure the productivity of knowledge workers whose product cannot be counted on our fingers? If it cannot do that, how can it track productivity growth? How does it track or control the money supply when the financial markets create new financial instruments faster than the regulators can keep track of them? And if it cannot do any of these things with the relative precision of simpler times, what becomes of the great mission of modern governments: controlling and manipulating the national economy? Even if some of these measurement problems are solved, as some surely will be, the phenomena they measure will be far more complex and difficult to manipulate than industrial economies of old.