Decline and fall of the American empire

The Scotsman and The New Zealand Dominion, January 2 1989

There are these three businessman – according to a joke that is currently working its way round Washington – one French, one Japanese and one American. They are about to be killed by some kind of terrorist who grants them a last wish. The Frenchman says he will sing the Marseillaise. The Japanese man says: “I want to give you my lecture on Japanese marketing and management techniques.” At which point the American shouts: “Shoot me first. I can’t stand to listen to it again.”

The Japanese are everywhere in the United States.  Americans tell jokes about them, resent them, worry about them and even, in a minority of cases, welcome them. Yet, they are in danger of missing the point about them, which is that while their arrival is, in the first instance, an economic event, its effects are likely to be much wider, bringing disruption to the social and political patterns of American life with such force that it deserves to be seen as the most important undercurrent in the USA today.

There are striking parallels between the United States in the late 1980 s and Great Britain in the late 1950s. There is the popular elderly leader – Reagan or Macmillan – leading a conservative revival of patriotism and middle class prosperity. There are the imperial pretensions – Reagan re-arranging Central America, Macmillan trotting round Africa. There is the surge of optimism – Reagan’s new morning and Macmillan’s You Never Had It So Good. There is the sensation of leaving behind the bad old days – of Vietnam and Watergate or of Hitler and rationing.

Yet, in both cases, there is a terrible fragility to the picture: the empire collapsing under the weight of its own financing; the impoverished underclass that refuses to go away; and, more significant than any other symptom, the emerging signs of a powerful competitor who is not only booming in his own backyard but coming across the wall to buy up everybody else’s yard, too.

The results in Britain were not simply that the economy collapsed but also that Britain’s claim to be a world power was cut down to size and there was a social earthquake – the consensus evaporated and with it much of the patriotism, the optimism and the prosperity. There is a neat little symbol of this in the habits of British cinemas: in the 1950s, they used to play the national anthem and everyone stood solemnly to attention; in the 1960s, they played it and everyone ignored it; in the 1970s, they just stopped playing it. In America, they still salute the flag…

The irony, of course, is that in the 1950s, it was the Americans who were circling the globe with their spare capital. For anyone who ever resented the American acquisition of their industries, or took a large pinch of salt with the American claim that they should be welcomed because they were only doing this to spread prosperity and freedom, it is an irony and also a delight to hear the USA now squealing with alarm as the Japanese perform the same service for them. Most of the squealing is confined to the obvious and, therefore, misses the wider point.

They squeal because the New York Met has stopped using American pianos in favour of Yamahas, because the Sheraton Hotel near the White House gives its guests complimentary copies of the Yomiuri Shimbun newspaper, because Van Gogh’s Sunflowers and Picasso’s Harlequin have gone to Tokyo, because Japan has the seven biggest banks in the world while the biggest American bank rates only 17th, because the USA runs an annual trade deficit with Japan of $55 billion and because only 20 years ago, Made In Japan was a synonym for junk imitations while Made In The USA was written on the technology that landed on the moon.

They squeal because last year Japanese companies bought $13 billion of American real estate, because Sony have bought CBS Records, because more than a third of the golf courses in Hawaii have been bought up by the Japanese, because they own hotels in every major American city including the ancient Algonquin in New York, because they have bought the snooty Chateau St Jean vineyard in California and because they did all this with the greatest of ease after the White House deliberately drove down the value of the dollar against the yen.

The squealing is only just beginning to take in the fact that this is a story not only of Japanese success but of stunning American failure, indeed the sort of failure that rapidly made Britain a symbol of decline around the world.

The American business community, which was once so proud, has been humbled in the last few years. Their car industry which, 20 years ago, held 76% of the world market, now has just 4%. Their 100% monopoly of the world market in machine tools has fallen to 35%. Their 90% share of the colour television market has fallen to 10%. Of the 27 US companies which used to make televisions, only one survives. All these markets have gone to competitors, most of them Japanese companies.

There has been a particularly terrible humbling in the market for video recorders where the American Ampex company which first developed video recorders, misjudged the market, and sold the technology to Toshiba with the result that the United States now imports 12 million video recorders a year and manufactures none. Not even one.

United States companies missed the boom in compact discs and so it was foreign companies which mopped up $1 billion of US sales in the first six months of this year. They have missed the coming boom in laser copiers, which are set to replace photocopiers: the technology is American but no US company would invest in it and so the Japanese stepped in and bought it.

Research and development has become almost extinct in the USA, largely under the pressure of merger mania and Wall Street greed which have forced companies to concentrate on short term profits and survival at the expense of long-term planning. In High Definition Television, for example, whose global market will be some $30 billion a year, Japanese companies are investing ten times as much in research as US companies.

The failure goes beyond businessmen and into government. Washington has no co-ordinated policy for its future technology. While Tokyo has the now legendary MITI – the Ministry of International Trade and Industry – which identifies and promotes new technologies and new markets, America has 14 different executive departments and nine different Congressional committees all pulling at each other. Now, for example, MITI is forging ahead with research into superconductivity, which will transform transport and communication, while “US policies remain in a considerable state of disarray”, according to a Congressional inquiry.

You begin to see how the arrival of the Japanese reflects deeper social trends, as if person for person, town for town, company for company, the Americans have yielded their former strengths to the Japanese so that they are now less inventive and less daring, more self-indulgent and more complacent than their new competitors.

Looking further, the failure touches the American education system,  which is in a terrible state of decay. Standards of teacher training have slumped. Violence in schools is at nightmare levels: in Washington DC, for example, there have been so many assaults that some schools now ban the carrying of satchels in case children use them to conceal guns.

American children are particularly weak in the sciences which they need to sustain their weakening economy. A Harvard physicist and winner of the Nobel Prize, Professor Sheldon Glashow, was on television last month describing his students as “scientific illiterates”. At Harvard, no less. “Our people can’t hack it,” he said. In global comparisons, American children do slightly better in mathematics than those from Swaziland.

According to the National Association of Science Teachers, a staggering 50% of American schoolchildren have no access to a laboratory, while 30% of their science teachers are unqualified arts teachers or sports instructors struggling to explain concepts they do not understand themselves. American companies spend an estimated $20 billion a year re-educating their work force: IBM, for example, runs compulsory algebra classes for all its employees at its Vermont office.

Looking further still, the failure runs through central features of everyday life. America has the highest poverty rate of any developed nation. It also has the highest infant mortality rate. Americans have to spend more for health care than the citizens of any other nation yet their life expectancy is down in the middle of the league table. Crime rates are soaring: more Washingtonians have been killed in gun fights this year than died in the whole of the Vietnam war.

No-one is saying that the United States is dead on its back. But there is now an accumulation of persuasive evidence that the country is in decline, that the sheer wealth of the American economy can no longer be taken for granted and, therefore, that a whole series of social and political assumptions are also shifting. The Japanese invasion is merely the clearest symptom of this underlying change.

With few exceptions, Americans see the Japanese arrival as a disaster and are, therefore, turning to any economic tool they can think of to defend themselves. Some states are trying to change their laws to limit foreign ownership of their resources. US industries have been beating a path to the White House pleading for protection against cheap imports. There is a degree of hostility to Japanese people. Yet, this may all turn out to be good news.

The one thing that causes most hostility to the United States is its role as a world power, backed by its highly controversial claim to be a model society. It is this which gives individual Americans their reputation for arrogance and which has made Yankee Go Home the most popular political graffitti in the world.

It may well be that the surging strength of the Japanese economy is introducing a new era in which global power will be more divided so that economic and military dominance no longer belong to the same nation. Japan will make a lot of money: the USA and Europe will try and take it away from them. The United States will still have the biggest armies but will have to cut them back to meet its more modest means.

It may take a while but finally, many years from now, Americans  may look back with gratitude on the day that the Japanese took them over and gave them a chance to stop running the world and be ordinary people again.