Jihad vs. McWorld (15 page)

Seen from the perspective of this intra-American competition, this shift from products to services mirrors an economy-wide trend and
corrects the impression given by high-tech manufacturing that America is in a steep decline. In hardware, to be sure, what were once American monopolies have given way to intense rivalry with the Europeans and the Japanese. For example, in 1974 the United States exercised a complete monopoly over the production of sophisticated DRAM memory chips essential to computers. By 1980, the U.S. share had fallen to 56 percent while Japan’s share had risen to 40 percent. Seven years later, the United States produced less than a fifth and the Japanese more than three-quarters of DRAM chips.
¹
Similar stories can be told about semiconductors, where the American share has fallen from double Japan’s in 1980 to less than Japan’s today, and telecommunications equipment where Japan rose from fourth place among producers in 1980 to first today, while the United States languishes in third place barely ahead of Sweden.
²
Even research and development spending—a longtime American virtue—has plateaued and after peaking at $94 billion in 1989 has fallen back to under $90 billion.
³
There are many explanations for these trends including the absence of an American state effort to match Japan’s industrial policy, unfair trade practices, and the costs of maintaining a defense from whose responsibilities the Japanese have been largely exempted.

Yet services and soft goods are where the action is, and in this domain the American story is rather different. Services have gone from being the poor cousin of the global economy to being its first citizen. In the year 1990,
Fortune
magazine, which had been tracking hard corporations for decades, finally noticed that service no longer meant just food and travel but included finance, information, and telecommunications and that it comprised over 60 percent of GDP and accounted for eight out of every ten American workers.
⁴
The result: a new annual list surveying “The World’s Largest Service Companies.” On the 1990 list of top five hundred service corporations, the United States led with 150 (Japan followed with 106, with Britain, 49, and Germany, 41, trailing). In 1992, America remained the leader with 135, although with its prominence diminished in commercial banks (8 of the top 10 and 31 of the top 100 were Japanese versus 8 of the top 100 for the United States, with Citicorp as the first American bank on the list at number 271) and life insurance companies (where 7 of the top 10 were Japanese). With 128
companies on the top 500, Japan seemed to be closing in on the American lead.
⁵
In software, information, and entertainment, however, America is pulling away.

The extraordinary significance of this new infotainment service sector to the new world economy can be seen by its impact on the often lamented American trade deficit. The 1992 deficit of 40 billion dollars is actually a mean average of a far worse $96 billion
goods deficit
, offset by a $56-billion
service surplus
. In the service sector, the United States has a powerhouse surplus economy. And with world trade in services now estimated at over $600 billion annually, the edge is of growing importance. Advertising exports now rival automobile exports in revenues. Moreover, all these figures are on the conservative side: the Commerce Department admits its traditional “merchandise bias” probably means exports in services are being radically underestimated.
⁶

Now critics will point out that even in the service sector where America seems dominant, it leads the world only in the retail sector where Sears and Wal-Mart remain the indisputable giants. In banking and insurance it has been overtaken by others in the top ten category. However, not all service sectors are equal with respect to the emerging postmodern economy of McWorld. From the point of view of the hard economy, banks and insurance companies may seem crucial, but from the perspective of the virtual economy, telecommunications and information along with entertainment predominate; indeed, the first two, if not the third, undergird the real power of the banks and insurance companies. Here the United States maintains an unrivaled and largely unnoticed superiority—with consequences for global democracy that demand careful examination.

On
Fortune’s
key 1992 list of the one hundred largest “diversified service companies,” eleven specialize in entertainment, telecommunications and information services: of these, eight are American, while only one each is Japanese, British, and Canadian. Of the top one hundred American diversified service companies, only seventeen are entertainment, telecommunications, or information related but these seventeen comprise $140 billion in sales or one-third of the total sales of $421.5 billion for all one hundred companies.
⁷
One-sixth of the top one hundred companies earn one-third of the revenues. In the following
section, the predominance of these companies will be shown to be a matter of much more than just revenues.

Our brief journey from the postwar to the postmodern economy tells a fairly plain story that moves from goods to services, low-tech to high-tech, hard to soft, real to virtual, body to soul. Its lesson for today is that tomorrow’s McWorld will be less about resources than about goods, less about manufactured goods than about goods tied to telecommunication and information; less about goods than about services; less about services in general than about information, telecommunication, and entertainment services; less about software per se than about cultural software of the kind found in images and sound bites being manufactured in advertising agencies and film studios. As we follow this logic and move along the economic spectrum it describes, the United States looks better and better and bigger and bigger and the story of the fall of America from economic grace looks more and more suspect. More important, the consequences of the logic, although good for American economic leadership, are bad for democracy. Nation-state capitalism once contributed to democracy’s founding: today McWorld’s global capitalism may signal its demise.

Yet the full story remains to be told. Because the new information service economy shapes global marketing and sales, it shapes and indeed constitutes the new ideology of McWorld. Capitalism once had to capture political institutions and elites in order to control politics, philosophy, and religion so that through them it could nurture an ideology conducive to its profits. Today it manufactures as among its chief and most profitable products that very ideology itself. Communism collapsed for internal political and economic reasons, but there were external pressures on it as well. Hollywood and Madison Avenue have made the bourgeois revolution practically unnecessary and the proletarian revolution nearly impossible: there are no “workers,” only consumers, no class interests, only a global pop culture that flattens economic contours and levels the spiritual playing field. Television, photocopy and fax machines, international travel, and the ideology of fun guaranteed that failing Communist regimes would expire even more expeditiously. These hard goods are, however, only so many vehicles. What they carry is McWorld’s videology, which belongs not to the goods sector at all but to the service sector.

T
HE SERVICE ECONOMY
is a strange hybrid, including the oldest and most elementary industries like food delivery, education, and health care but also encompassing new age information and communication technologies that are being invented and introduced almost faster than they can be described. The catch-all service category thus lumps badly paid, nonunion hospital workers and no-future fast-food employees together with computer programmers, airline pilots, and information technicians. It includes commercial banks where Japan has long since seized the advantage from America and Europe as well as entertainment companies where American global leadership is actually growing and seems secure well into the next century. Examining the service sector affords an opportunity to make good on my rhetorical amalgamation of McDonald’s, Macintosh, and MTV—fast food, computer software, and video—by showing how in this sector McWorld manufactures its own specially tailored twenty-first-century videology. When McDonald’s sells
Dances with Wolves
and
Jurassic Park
videos and sundry movie tie-ins in a vague celebration of multiculturalism or environmentalism or extinct reptile preservation, or hires Michael Jordan to link its products to celebrity sport, simple service to the body, I have suggested, is displaced by complex service to the soul. McWorld is a product above all of popular culture driven by expansionist commerce. Its template is American, its form is style, its goods are images. It is a new world of global franchises where, in place of the old cry, “Workers of the world unite! You have nothing to lose but your chains!” is heard the new cry, “Consumers of the world unite! We have everything you need in our chains!”

In order to focus on McWorld, however, I must first sort out the odd bedfellows who cohabit the generic service sector. There are in fact three powerfully distinctive service subsectors that in many ways are more different from one another than they are as a whole from the natural resource and industrial manufacturing sectors. By the measure of training, income, prospects, and self-worth, a Burger King “cook” hand-grilling mass-produced preformed frozen meat patties has a good deal more in common with a sweatshop seamstress machine-stitching cheap frocks than she does with a computer programmer
developing virtual reality arcade games, even though the cook and the programmer are in the service sector while the seamstress is in the manufacturing sector. Distinguished by their varying constituencies, my three candidates for subservice sectors are:

The traditional service sector,
comprising those who serve people directly with traditional food, transportation, health, and housing services, including food preparers and servers, hoteliers and their helpers, airline pilots and train conductors, doctors and social workers, and all others who deliver services directly to the
individual human body;

The systems facilitation sector,
comprising those who serve the infrastructure—the political, economic, and social systems that make modern society possible; these include lawyers, accountants, economists, bankers, insurance people, computer operators, telephone operators, policy specialists, and anyone else who facilitates the operation and interaction of our national and global systems, all those who serve the
corporate body;
and

The new information sector,
what I will dub the infotainment telesector, comprising those who create and control the world of signs and symbols through which all information, communication, and entertainment are mediated, including wordsmiths and image-spinners like advertisers, moviemakers, journalists, intellectuals, writers, and even computer programmers, as well as—to the degree they are in the sign/image business also—teachers, preachers, politicians and pundits, and others who minister to the
individual human and collective corporate soul
.

These three subsectors, each with its own professional (or not so professional) class of employees, stand to each other roughly as the three basic economic sectors (natural resources, industry, and service) stand to each other—in a hierarchy that is also an economic ladder. The new information subsector is on the frontier of economic development and corporations or nations that control it are prospective world leaders likely to dominate the next century. The traditional service subsector is the third world of the services domain, with its dependency at the lower end on relatively unskilled labor and uncomplicated work. It is a first but also quite possibly a terminal step on the stairway to power; it is certainly no ticket to global dominion. Doctors and transportation experts, though part of
this first subsector by virtue of the direct consumer services they deliver, are also information technicians who, by the measure of their training and the science on which their service is premised, belong at least in part to the most advanced information subsector as well—just as fast-food workers can be seen as low-skilled manufacturing laborers (they “make” hamburgers). Between the two subsectors that define the parameters is the powerful new world of bankers, accountants, lawyers, and programmers who serve the great corporate entity, part real, part virtual, that is McWorld’s global market. Although highly profitable and professionally rewarding, this sector can be overrated. For it neither delivers services directly to the mass of the world’s people nor controls the crucial information and telecommunications services on which it wholly depends and that potentially can govern their minds and souls. It is global business’s janitor and while it is well paid and makes the machine go it can tell it neither where nor how. That is the task of the infotainment telesector, from which McWorld draws its informal and mostly unarticulated governing norms.

Old-fashioned class analysis associated modes of production with class structure: Marx thus suggested that the ancient slave-master relationship was founded on the sovereignty of human labor (he who mastered labor was master of his world and eventually the political master as well), that the feudal relationship was rooted in sovereignty over land (he who owned the land ruled the world), and that the capitalist relationship rested on sovereignty over capital (he who capitalized machinery and bought labor bought into the ruling class). To the extent there
is
such a relationship between control over the economic mode of production and access to political power (and surely, though it is not as neat as Marx would have it, there is
some
relationship), it is the infotainment telesector of the service economy that is acquiring a certain postmodern sovereignty. She who controls global information and communications is potentially mistress of the planet. Sovereignty here is exceedingly soft, however, entailing rule by persuasion rather than by command, influence via insinuation rather than via coercion. This form of power, scarcely visible, is not easily rendered accountable. Its implications for democracy are in some ways far more disturbing than those that can be inferred from the anarchy bred by Jihad (see
Part III
).