Russia tends to rely on products of land, so that in Rosecrance's model it remains vulnerable to conflict over territory. However, he believes by drawing Russia into an encompassing coalition with Europe and other powers, the chance of conflict will be diminished. .
China, with a trained labor force can attract foreign investment in production. In Rosecrance's view "China may become the production plant for the world, but China's industries would only attain completeness when mated to research, development, product design, marketing, and financing provided by other nations."" (171) The developing world continues to rely on the products of land, and thus remains the least stable set of nations. However, to the extent China and the developing world will be willing to join in production interdependence, the less likely they are to become involved in unproductive, violent conflict.
The world has been undergoing a revolutionary change in moving from reliance on land to reliance on mobile capital and information. Intangibles are becoming relatively more important than manufactured products. If this trend continues, Rosecrance believes human capital will become even more important "if the corporate and legal systems can be reformed to properly handle the creative output of that human capital.
Part II and Part III of The Rise of the Virtual State, explores the special place of the.
multinational enterprise in the contemporary global economy. Rosecrance reviews the types and magnitude of operations of multinational firms around the world, and investigates the national and international political conditions that facilitate or restrict the growth of such operations. Rosecrance's arguments throughout this section of the book addresses the questions of whether multinational enterprises are autonomous political-economic actors, how they may contribute to the development of emerging host-economies, how they might influence the politics and societies of advanced countries, and if they might contribute to more peaceful relationships among nations.
