Jihad vs. McWorld (12 page)

The real story of America’s vicissitudes as
the
global manufacturing nation is in fact not the story of power shifting from one country to another, but of the gradual erosion of the very meaning of national predominance in industries that year by year are becoming ever more transnational in their corporate makeup, multinational in their parts acquisition, international in their job allocation, and global in their consumer marketing strategies. Just look at Nike or Intel or Apple. American manufacturing leadership simply is not any longer American, anymore than Japanese manufacturing leadership is Japanese. Manufacturing corporations have become as global as the markets they ply. This is why Paul Kennedy’s book on the rise and fall of the great powers might more appropriately have been titled “On the Rise and Fall of the Very Idea of a Great Power.”

Of course in speaking of global companies and global markets, the globe encompasses only designated players in the game. The geography of the whole planet is not at issue. Excluding oil and mining concerns, there is not a single African, South American, Middle Eastern, or Indian company among the top five hundred corporations, and the story is not much better with respect to patterns of consumption since the primary producers turn out to be the primary consumers as well. In 1991, for example, the United States exported $85 billion in goods to Canada, $48 billion to Japan, $33.3 billion to
Mexico, $22 billion to the United Kingdom, and $21.3 billion to Germany. These top five export markets comprised almost $210 billion in exports or way over half of America’s 1991 exports globally.
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Of America’s top five supplier countries, four are also top five export markets. Of the top ten importers, eight comprising over 77 percent of America’s total are top export markets.

Americans worry about their trade deficit: the United States runs significant deficits with seven of the ten on the list, all save France, the United Kingdom, and Mexico. Nonetheless, its deficit trading partners are also its export partners. The only non-European, non-Pacific Rim countries among the top twenty-five U.S. export markets are its Latin American neighbors (with whom America also runs trade deficits): Brazil at number 17 and Venezuela at number 20. Nearly half of the world’s exporters or nearly seventy of the world’s nations listed America as the first, second, or third largest destination for their exports in 1987–88. Forty put America first including all of Latin America but also South Korea, Japan, Nigeria, Mozambique, Iraq, Uganda, Pakistan, Sri Lanka, India, and poor Bangladesh.
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In short, America buys from and sells to its rivals, and they do the same with one another when they are not trading with America. Within the club there may be differentials in import/export ratios that stir up domestic passions (as with NAFTA), but belonging to the club is what really counts.
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Third World countries are marginalized coming and going while Terminal World nations fall off the planet. There may be radical
trade deficits among trading partners but only a handful of nations are even part of the calculation. The North/South split overshadows the East/West split. It is reflected in almost every economic report available on central Asia, the Middle East, and—most dauntingly—sub-Saharan Africa, which as a “human and environmental disaster area” totally “peripheral to the rest of the world” can hardly be thought of as occupying “the same historical time.”
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Ironically, global economic forces weaken the nation-state in developed areas where it is most democratic and strengthen it in the Third World where it is least democratic, imperiling liberty in both cases. Democracy loses at both ends of the developmental spectrum. Free societies with expansive economies gradually sever the ties that hold a people to traditional religion and nationhood and corrode the state institutions that make democracy and a free economy possible in the first place. Despotic nations offer no such solvent to nationality and religion, which are strengthened in ways obstructive to modernization and democratization. Not only do the rich get richer and the poor poorer, but the rich get freer while the poor are enslaved.

Of course in the long term, democracy is served by these ironies in neither the First nor the Third Worlds. In the Third World too much state coercion steals liberty from peoples poised potentially for economic takeoff; and in the First World too little state coercion leaves individuals unprotected from market forces over which they have no rational or collective control. Dependency on global markets by virtue of global largesse may be a better deal than dependency by virtue of poverty on local despots, but both constitute a kind of subjugation and neither staves off that common servitude in which disparities are increased as common liberty is diminished.

These manifold ironies, while contributing powerfully to the story of growing global injustice and shrinking the prospects for global democracy, are only footnotes to our primary focus here: the internationalization of markets and the companies that serve them. In the developed world that “counts,” where liberty has (at least in theory) been minimally secured, the erosion of nationality as a significant conditioner of corporate business remains the most important feature of the manufacturing sector. For the decline of democratic control over markets at the level of the nation endangers both justice and social policy
and
the prospects for global democratic control over
the economy. Among the top twenty-five U.S. companies (for 1992) with the largest non-U.S. sales can be found not only energy giants like Exxon (77 percent of sales outside America), Mobil (68 percent), and Texaco (53 percent), and chemical companies like Dow (50 percent) and DuPont (47 percent), but Philip Morris, Coca-Cola, Johnson & Johnson, and Eastman Kodak.
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Dow Chemical earns nearly $4 of every $10 in sales overseas and has nearly twice as many plants abroad as in the United States. Goodyear Tire and Rubber earns 43 percent of its income from abroad and sites more than half of its eighty-three plants outside the United States in twenty-five different foreign countries.

One need knock on only a few doors of corporate entities that carry the name “American” in their company titles to hear how hollow their patriotism rings. Consider American Greetings Corporation (cards and gift items), which earns 14 percent of its sales revenues abroad; American Express, which gets over 20 percent of its earnings beyond America; American Home Products, which earns 24 percent of sales far away from home; the American International Insurance group, which gets 46 percent of its revenue from its international rather than its American side; American Standard (plumbing), which earns 49 percent of revenue on someone else’s currency standard; American Cynamid, which like most American chemical companies earns more than half its revenue (51 percent) abroad; and finally American President (shipping), which derives two thirds of its income from foreign port sailings.
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Twenty or more years ago, many of the American companies now deriving majority revenue abroad were almost exclusively focused on the domestic market. A “French” company like Michelin (tires), with 20 percent of world tire sales, earns only 19 percent of its revenues in France, while Sony earns less than a quarter of its nearly $30 billion in annual income from Japan, deriving over half from the United States and Europe (28 percent of its total sales in each). Smaller countries have also lost even nominal sovereignty over their businesses. Sweden’s cheap furniture retail giant IKEA sells better than four-fifths of its products ($3.2 billion in sales in 1992) beyond Swedish frontiers and founder Anders Moberg (like Wal-Mart’s Sam Walton, a billionaire) recently transferred total ownership of IKEA to a foundation he established in Amsterdam, while company head
quarters went to Denmark (Moberg himself moved to Switzerland).
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With a style called “Danish modern,” how Swedish can IKEA really be?

As manufacturing is internationalized, and traditional industrial powers cede dominion to new markets with cheaper labor, the industrial sector is itself being transformed. The internationalization of companies is only one part of this change; for the goods companies make—the very idea of what a consumer good is—are evolving. From hard to soft goods, from soft goods to services, which are themselves becoming goods. We turn now to that part of the story.

W
HILE MAKING AND
selling goods is still the dominant form of economic activity in the international markets of McWorld, the goods are increasingly associated with or defined by symbolic interactions that belong to the service sector in its postmodern, virtual economy manifestations. The move from heavy defense-related industrial production to consumer goods that has been a continuing feature of economic development has in the last decade moved into another phase in which hard consumer goods are increasingly becoming associated with soft technologies rooted in information, entertainment, and lifestyle, and in which products are emerging that blur the line between goods and services. The ancient capitalist economy in which products are manufactured and sold for profit to meet the demand of consumers who make their unmediated needs known through the market is gradually yielding to a postmodern capitalist economy in which needs are manufactured to meet the supply of producers who make their unmediated products marketable through promotion, spin, packaging, and advertising. Whereas the old economy, mirroring hard power, dealt in hard goods aimed at the body, the
new economy, mirroring soft power, depends on soft services aimed at the mind and spirit (or aimed at undoing the mind and spirit). This wedding of telecommunications technologies with information and entertainment software can be called for short the infotainment telesector. The goods sector is captured by the infotainment telesector, whose object is nothing less than the human soul.

Hyperbole? The long dormant language of the soul, until just recently quite unfashionable, at least in corporate capitalism’s domain, is making a secular comeback. As it assimilates and transforms so many other ideologies, postmodernist capitalism has not shied away from assimilating and transforming religion. If Madonna can play erotic games with a crucifix, why shouldn’t Mazda and American Express work to acquire some commercial purchase on the Holy Spirit? “Trucks,” intones a gravelly-voiced consumer in a 1993 Mazda television ad, “are a spiritual thing for me.” The new Mazda pickup is “like a friend”—a friend, that is, “with a new V-6 and a soul to match.” In another ad campaign, American Express teams up with Anita Roddick’s Body Shop to exploit environmentalism, human rights, and what it calls “trading honorably.” The print ad ends with a spiritual pitch: “American Express knows a lot of stores that are good for your body. And Anita knows one that’s good for your soul.”

For America’s largest brand-name consumer goods corporations like Coca-Cola, Marlboro, KFC, Nike, Hershey, Levi’s, Pepsi, Wrigley, or McDonald’s, selling American products means selling America: its popular culture, its putative prosperity, its ubiquitous imagery and software, and thus its very soul. Merchandising is as much about symbols as about goods and sells not life’s necessities but life’s styles—which is the modern pathway that takes us from the body to the soul. AMERICAN CULTURE (AND GOODS) THRIVE IN SOUTH AFRICA, reads the
New York Times
headline about new investment possibilities in a nation where, as it prepared for its first interracial free elections, black South Africans were sitting around in “a Kentucky Fried Chicken restaurant, sipping Coca-Cola and listening to a Whitney Houston tape” and where seven of the top ten television programs were American.
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Meanwhile, Marlboro announces Marlboro Gear, merchandising the style it has invented (“Marlboro Country”) to sustain tobacco sales in an anti-smoking era.

The style marketed is uniquely American yet potentially global since, for the corporations in a quite literal sense, we
are
the world. To the world, America offers an incoherent and contradictory but seductive style that is less “democratic” than physical culture: youthful, rich urban, austere cowboy, Hollywood glamorous, Garden of Eden unbounded, goodwilled to a fault, socially aware, politically correct, mall pervaded, and, ironically, often dominated by images of black ghetto life—black, however, as in hip and cool rather than in crime-ridden and squalid, “baaaad” but not bad. PepsiCo’s 1992 Annual Report features mostly black dancers from the Martha Graham Company and the School of American Ballet on its front and back covers, and the Pepsi Generation, multicolored and multicultured, is nothing if not American. The Michaels (Jordan and Jackson), the Jacksons (Michael, La Toya, and Jesse), the King (Martin Luther) and Prince too; and the Simpson (not the Simpsons): thus does white America use an indiscriminate selection of heroes from black America to capture heroically conceived global markets. Heroes fall—Michael Jackson and O. J. Simpson have tumbled—but living on the edge is part of what makes American ghetto culture thrilling to outside observers.

In the selling of America as a means to selling American goods, advertising has itself become big business on a global scale. Of the twenty-five largest advertising companies, fifteen are American. Total world advertising revenues are estimated to be anywhere from $150 billion to $250, nearly one half of which are American.
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The largest firm, Britain’s Saatchi & Saatchi, operates in over eighty countries and, according to media expert Ben Bagdikian, buys 20 percent of all commercial time in world television; its Pepsi-Cola account developed an advertisement to be placed in forty different national markets that could be seen by one-fifth of the human race.
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Coca-Cola’s new subsidiaries include China and, in a manner of speaking, Rutgers University. In China it must share its market with PepsiCo and other companies but at Rutgers University it has outbid the competition and, for $10 million, has secured a market monopoly for its products along with the right to advertise its association with the school. Late capitalism is no longer about either products or competition. Image is everything and the “it” that Coke is, is now education—as image rather than substance. Such recent victories,
including its sponsorship of recent Olympic games, are perhaps fruits of the link Coke forged a few years earlier with Creative Artists Agency, the powerful talent agency and image spinner run by Michael Ovitz, to “help mold its marketing and media strategies around the world.” Coke understands the link between its drink and American culture: according to an executive, “American culture broadly defined—music, film, fashion, and food—has become the culture worldwide.”
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The Coca-Cola company has discovered McWorld—which, without knowing it, it had actually helped invent over the previous half century.