An examination of the technological gap between the United States and Europe in the context of its historical perspective and postwar developments. The "gap" is not new but has existed since the nineteenth century. It has been erroneously viewed by some as a single phenomenon created by increased world trade, increased U.S. direct investment in Europe, growing U.S. power in science, and U.S. military dominance. Analysis shows that the military and general economic consequences of the gap are separable, and that the technological spillover from massive military R&D is negligible. Although universal education and large markets are important, competition is a most important factor in fostering overall technological progress. 34 pp.
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