Jihad vs. McWorld (11 page)

In the moderate-risk group, non-Arab nations account for about 21 million barrels a day (better than a third of global production), while the Middle East tinderbox (not including high-risk-category Iraq and Iran) accounts for nearly 13 million more barrels a day, or another fifth of world production. Add it up: better than three-fifths of the world’s current oil production (and almost 93 percent of its potential production reserves) are controlled by the nations least likely to be at home in McWorld and most likely to be afflicted with political, social, and thus economic instability.
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The results are equally disconcerting when we rate energy exporters in the high-and moderate-risk categories on a democracy scale. Since democracy is correlated with continuity of government and thus stability and since democratic nations are less likely to make war on other democracies than nondemocratic nations, oil-producing democracies make safer partners in McWorld’s trade relations. Yet the Western powers were content to return Kuwait to oil production without inducing it to become more democratic.

The most rigorous standards would put the Latin American group and India on the democratic margin, at best, giving them only 7 of the 42 million barrels produced by nations in the high-and moderate-risk group, and leaving over four-fifths of production in these two groups in non-democratic hands. If all of the oil-producing ex-USSR republics actually become democratic, another 10 million barrels will be “safe,” but nearly one-half of world production will still remain at risk. Indeed, the subdivision of once-extensive federations like Yugoslavia and the Soviet Union into smaller fragments has turned once-producing exporters into net importers. As part of the Soviet Union, the Ukraine could think of itself as part of a powerful fossil-fuel and lumber producer. But though it has now acquired the illusion of independence, it has become a needy importer desperately negotiating with Russia for oil, gas, and wood. Yuri Byelomestnov, director of the Ukraine’s October Mine, says bitterly: “Ukrainian independence, it’s a mistake…. [N]ationalism blinds intelligence. We used to get 8,000 pieces of equipment—conveyor belts, lumber—from Russia a month. Now we can’t get them.”
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The logic is spare and fearful: both Jihad and McWorld weaken nations. Jihad splinters them but increases their dependency on McWorld; McWorld draws nations out of their isolation and autarky,
but in making them dependent, reduces their power. Democracy suffers either way, especially if, as I will argue below, democracy historically has rooted its liberties in nation-state institutions. Even as we secure the macropeace through trade, treaties, law, cooperation, and common force, the microwars occasioned by Jihad’s fractious parochialisms become of ever greater global significance. Interdependence makes boundaries permeable not just for the good but for the bad, for Jihad no less than for McWorld.

H
OW DIFFERENT IS
the story when we move from the domain of raw resources to manufactured goods—supposedly the foundation of any national economy? Manufactured durable goods constitute the traditional industrial sector by which the rise of capitalism has generally been measured. Until recently this sector has been regarded as the engine of all developed economies. The decline of American manufacturing in traditional domains like steel and automobiles has thus been closely associated with a putative erosion in world economic leadership. America’s “rust belt” has turned America into a vast rust bucket. The “American Century” celebrated by
Life’s
Henry Luce in 1941 ended without ceremony sometime in the 1970s when America crossed the midway point on its sad journey from being the world’s largest creditor nation to being its largest debtor nation and when Europe and Japan, well recovered from the war, began to eat away at America’s leadership in automobile, home appliance, electronics, and computer manufacturing. Paul Kennedy, David Calleo, and other pessimists have concluded that the American epoch, scarcely half a century long, is over.
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By the same logic, the emerging economic powers to whom the future supposedly will belong have been identified in recent decades by their emerging industrial manufacturing potential. The multiplying “tigers” on the Asian side of the Pacific Rim like Japan, the Koreas, Taiwan, Singapore, and China (with Hong Kong) have thus caught up to and even surpassed European powers like Germany and France as major economic players. Smaller and less noticed specialists in manufacturing like Israel, Iraq, Cuba (before the demise of their Communist patrons), Botswana, Kuwait, and Libya have also come to exercise an economic influence disproportionate to their size while Chile, Turkey, and even Mexico may yet achieve extraordinary rates of growth in this decade.
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All of the above countries devote over half of their GDP to industry.
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Yet these trends prove little. Projections based on manufacturing capacity are fundamentally flawed because they miss the direction in which the evolving economy is moving. Economic strength in the era of McWorld has passed to the domain of services, and here new and distinctive measures of leadership have emerged quite separate from the traditional industrial sector.

Joseph Nye has written persuasively about the shift from the kind of “hard power” that is rooted in the coerciveness of command structures—military and machine power—to a novel form of “soft power” that leads by consent and is rooted in “the universalism of a country’s culture and its ability to establish a set of favorable rules and institutions that govern areas of international activity.”
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He suggests that politically soft power is supplanting hard in the modern world, and I will argue that there has been a parallel evolution in the economy from the hard manufacturing to the soft service (information and communication) sector, and that economic power is likely to follow this evolution in the coming decades, upsetting the grim predictions of the declinists about the United States.
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The United States, no longer the dominant manufacturing entity it once was, nonetheless has a sure command of the softer powers that are forging McWorld, which positions it to recapture global leadership. What this suggests is that the story of America’s rise and decline as a manufacturing power is only part of a larger, not yet finished, journey.

In 1950 not long after the end of World War II and before the burgeoning Cold War began to challenge American strength and divert
its attention from rebuilding a demobilized peacetime economy to restarting a cold wartime economy, the United States had already overtaken England and Germany as
the
global power. Military and political factors seemed primary, but underlying them was demonstrated economic power. This unprecedented strategic hegemony rested almost entirely on the American industrial economy as it emerged from World War II—an economy that was driven by the largest and most productive manufacturing and banking companies in the world.
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In that postwar moment when America dominated the world economically, the world it dominated was a far more diversified place culturally. While America exercised hard power hegemony, soft power was scattered and insubstantial, a matter of many different insular local cultures. Semiotic systems were fragmented, while cultural symbols were the possessions of parochial peoples with colorfully distinctive self-images. In the fifties and sixties, there was no “Europe” in Europe. In the world before McWorld, the Swedes drove, ate, and consumed Swedish; the English drove, ate, and consumed English, and the rest of the world’s inhabitants either mirrored their colonial masters or developed domestic consumption economies around native products and native cultures. In France one ate nonpasteurized Brie and drank vin de Provence in cafés and brasseries that were archetypically French; one listened to Edith Piaf and Jacqueline Françoise on French national radio stations and drove 2CV Citroëns and Renault sedans without ever leaving French roadways—two-lane, tree-cordoned affairs that took you through half the villages in France on the way from, say, Paris to Marseille. An American in Paris crossed the waters to get away from Tastee-Freez, White Castle, and Chevrolet pickup trucks and once in France could be certain they would vanish. A German studied in Italy to imbibe Mediterranean, not Atlantic, culture. Americans dominated the economic world in the abstract, but the French dominated France, the English England, and the Italians Italy.

Yet two rival worlds of industrial power evolved inside and outside of the Cold War. While the United States and the Soviet Union focused their energies on defense-and aerospace-related heavy industry, Germany and Japan homed in on consumer products where, ironically, the ideal American mobile, autonomous, choosing consumer
who would define the future economy was the natural target. Where defense and aerospace industry were closely associated with hard power and state command structures, the new consumer economies privileged the private sector and pointed toward soft power.

America’s postwar economic hegemony was reinforced by its decision to focus on automobiles. The choice of roadway over railway and the construction of the huge interstate highway system meant that the industries on which automobiles depended (steel, aluminum, chrome, petroleum, rubber, concrete, asphalt, and electronics) would be continually nurtured not just for public sector defense spending but for private sector consumer spending. Automobiles facilitated the suburbanization of America and thus had a vital impact on the housing and construction industry as well. Suburbanization required improved communications and home entertainment and gave television a new role as the national medium. This domestic productivity combined with heavy industrial production in the defense sector sent the economy surging and secured America’s global economic leadership. The arms race allowed (forced) the Soviet Union and suppliers like East Germany to build powerfully competitive industrial economies as well, but it was to those nations that could concentrate on consumer goods that the future really belonged. The United States and the Soviet Union were in effect arms-racing themselves right out of the leadership. The USSR would eventually bankrupt itself in the competition, and America would survive economically only by securing an elephantine national debt, a wrenching trade deficit, and the unwanted status of the world’s largest debtor nation, uneasy in the 1990s with the McWorld its postwar economy has created.

Innovations in electronic and computer technology that had originated in American defense research facilitated developments in consumer goods that the new manufacturing powers in Europe and the Pacific Rim could take advantage of. The smaller throw capacity of America’s underpowered rockets spurred miniaturization, while the demands of high-tech weaponry induced advances in electronics and computers that were quickly translated into consumer technology. Radios, cameras, telephones, video equipment, kitchen and household appliances, as well as home computers—all the things needed to fill up America’s multiplying private cars and private
homes—were the new frontier of manufacturing. Despite America’s leadership in research and development, it quickly lost its competitive edge to the nations it had defeated in the war.
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Yet despite attrition, the United States remained a formidable industrial power, gradually building a base for its new ventures in the service economy. Its GDP approached $5 trillion in 1993—better than one-fifth of gross world product, produced by only one-twentieth of its population. Of the world’s 500 leading industrial corporations in 1992, 161 were still American, including five of the top nine and all of the top three (General Motors, Exxon, and Ford).
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But a surprising number of the nation’s leading corporations are newcomers. Founded in 1968, Intel Corporation had sales of $8.8 billion and thirty thousand employees in 1993. Nike was born in 1972, Microsoft in 1975, Apple Computer and Gene Tech in 1976. These corporations are not only new, they represent a new form of economic power.