An Era of Booming Success
It is an international cliche that deeds are more important than words-but
action does not have to be political. It can be commercial. International trade, not international talk, will assure genuine communication among nations.
October 26, 1962
In the middle of the period of Europe's impressive economic success,
the United States sank into deep mourning. No state funeral, since that held
for King Edward VII in 1910, was so solemnly majestic and international in its
ceremony as that of President John F. Kennedy in Washington, D.C., on
November 25, 1963. Victim of an assassin's bullet, the president was honored
in death by some two dozen heads of state, including the presidents of France,
Ireland, and West Germany, the king of Belgium, and the consorts to the
queens of England and Holland.
To view that group of leaders walking together, one would have
thought that world unity had become a reality. Of course, it had not.
However, the international congregation on that sad day was an expression of
the growing interdependency of the regions of the world. It particularly
expressed American dominance in Western Europe.
It was during the second decade of Europe's recovery from World War
II that the "Americanization" of the Old Continent intensified. The American
language made incredible inroads, with terms like "okay," "pipeline," "jet,"
"jeans," and "parking" becoming part of several European vocabularies.
As if this were not enough, branches of American fast-food and hotel chains
soon located in the major capitals of Europe and added a pungent and
colorful quality to the cultural invasion.
"Americanization" is a rather loose term, descriptive of the
contemporary consumer-oriented economy and mechanically structured
daily life. It furthermore implies an accelerated pace of living-with ulcers
becoming the modern European equivalent of eighteenth-century gout. And,
as in the United States, European magazines soon carried advertisements for
a variety of labor-saving devices, which could now be widely afforded. For the
bourgeoisie, the maid went out as the electric dishwasher came in.
The period of recent European history which roughly straddled the
years 1958-1969, the time when General Charles de Gaulle was president of
France and near-arbiter of European affairs, was the extended moment of
Europe's greatest economic development, the period when the benefits of
industrial society were for once widely spread throughout European society.
As in the previous decade, economics again dominated European history.
The Economics of Plenty
The success of the Common Market seemed one indication of an era of
domestic peace and comfort. All European countries, even those outside of
the Common Market, fared quite well. Between 1957 and 1961, for instance,
the per capita income in Western Europe rose about 20 percent. One easy
measure of modernization was the purchase of television sets. In 1957,
Italians owned 647,000 sets; in 1967, they owned 7,669,000. The French
numbers grew equally spectacularly: from 683,000 in 1957 to 8,316,000 in 1967.
The growth in family income allowing for such purchases was
matched by its redistribution within family budgets. Europeans, particularly
in France and England, were now spending less on food and more on rent
and leisure-time activities. Vacation travel increased, as the automobile and
better train service made a vacation in the mountains or at the beach as
fashionable as it was attractive. Traditional patterns of purchasing also
altered. The local market and the small shop declined in commerce, as large
concerns replaced them. The supermarket became a part of European culture,
such that self-service, hitherto an alien practice, was made an aspect of daily
Such changes resulted from many factors, of course, but none was
more significant than the new economy of scale. European companies grew
in size, output, and range of market. But more important was the intrusion of
American firms into the European market. Between 1958 and 1961, some 843
American firms established subsidiaries on the Continent. By 1966, American
investment had reached the staggering figure of $16.2 billion. European
reaction was mixed, but a sense of concern over Europe's future
independence was widely asserted. As one French politician remarked, the colonization of
Europe by America appeared to be under way.
Behind all of this activity loomed a new corporate form: the
multinationals. These companies, operating in a global market, established
their own branches or subsidiaries abroad and thereby operated on a truly
international scale. In 1967, for example, the largest of the lot, General Motors,
had $20 billion in world sales and owned production facilities in some
twenty-four countries. Chrysler, with $6.2 billion in sales, and facilities in
eighteen countries, had already bought out the French automobile firm Simca
and also owned the British company Rootes. In some instances, these large
concerns engaged in what has been called "third-nation exchange." The Ford
Motor Company manufactured parts in both Belgium and West Germany.
Trade in these parts between both countries was a major element in Belgian
foreign commerce. In other instances, these concerns amalgamated with
European firms by buying into them. The French computer company
Machines Bull, the largest independent European manufacturer, found that it
had to accept financial support from General Electric because of severe IBM
competition. In this manner, GE gained entry into the European computer
market. Most impressive of all was the staggering statistic that 80 percent of
European electronics production was owned by American firms.
There were several disturbing aspects about this new economic
development noticeable at the national level. In the first place, it marked a
departure from established American trading practices. Before, American
goods had been primarily exported; now they were both manufactured and
sold abroad. Thus, while American investment figures increased, American
foreign trade declined, to the point that the United States found itself with a
$10.6 billion trade deficit in 1970. As seen from the perspective of European
politicians and technocrats, the multinationals were a direct threat. Although
the United States did not control a majority share in any one European
national economy, American firms definitely controlled those new key
industries that counted in the age of the Second Industrial Revolution. It was
the field of electronics and communications that American corporations
What was not lost on Europeans was the hard fact that research and
development were funded far more lavishly in the United States than in
Europe. It consequently seemed as if Europe was relatively underdeveloped
technologically, despite the great advances it had made in the education of
scientists and the establishment of research centers. For instance, France, with
one-fourth of the population of the United States, spent only one-tenth of the
amount that the United States invested in research.
To compound the problem, Europe endured an unexpected form of
intellectual emigration. The "brain drain," as it was called, further weakened
European technological progress. The expanding American economy, with its
higher wages and more attractive standard of living, was an inducement to
trained technocrats to leave Europe. About fifteen hundred scientists and
engineers left Europe each year for America in the period 1956 to 1961.
Underlying this curious dual development of European well-being and
American economic domination was the problem of capital. Despite the rapid
increase in gross national product and per capita income, no European nation
was able to match the enormous sums of money generated in the United
Whether the multinational corporation was a threat or a boon - a self-
serving company bent on growth and further capital investment for its own
sake, or a means to more efficient production and marketing - is a question
that was hotly debated in the late 1960s and early 1970s. Historically, the
advent of the multinational corporation is further proof of the globalization
of national economics and the welding of bonds of gold that held Western
Europe fast to the United States. Moreover, the primacy of the multinational
in the 1960s suggests that the technocrats, as was predicted over a hundred
years before by the Utopian Socialists, became as important, perhaps more
important, than the politicians.
NEXT: The Politics of Europe