The European Revenge Robert Heller and Norris Willett (Barrie and Jenkins £4.95)
It was in 1967 that Jean-Jacques Servan: Schreiber popularised in a best-seller, Le Deli Americain, the threat of an American industrial hegemony rapidly closing on Europe. He predicted: "The third industrial power in the world, following the United States and the Soviet Union, could well be in fifteen years not Europe, but American industry in Europe." The thesis suited the spirit of the times: General de Gaulle was trying to establish in the European mind that "Europeanism" consisted of "independence" from the United States and the massive American purchases of European industrial assets with borrowed dollars; this was siezed upon as evidence that the United States was engaged in some imperialistic venture.
What Servan-Schreiber described as happening was accurate enough; the dollar was over-valued and the productive apparatus of the United States, although still vast and powerful, could no longer sustain the outflow of , funds for military expenditure, aid and private investment; moreover, European companies were cheap at their prices measured by the then exchange rates, and by borrowing back the American deficit through the Eurodollar market American corporations did seem to be buying up Europe on the never-never; "we pay them to buy us," Servan-Schreiber complained. The "American challenge" was primarily one of technological superiority; himself an intensely ambitious man, editor of the American style (and American financed) L'Express — the Time magu4ine of France — and hero-worshipper of the Kennedys, Seryan-Schreiber attributed the American success to youthful managerial thrust; the European response, he seemed to be saying, should be to let loose the new frontier energies of the Servan-Schreibers. However, the weakest part of his thesis was the assumption that technological superiority (if true) meant political domination. In the famous prediction quoted above, he equates "American industry in Europe" with a nation state, indeed a super-state — "the third industrial power in the world."
Things look very different today,' and they look even more different if it is assumed that Servan-Schreiber was right then but subsequently proved wrong. But he wasn't. From the beginnings of the post-war recovery western Europe had been steadily redressing the balance of economic strength vis-a-vis the United States; the American payments deficit was in part the result of the disproportionate burden borne by the United States, including the unnecessary burden of Vietnam which nobody was willing to share, and, in part, of prodigal private investment overseas; what was really happening by the late 'sixties was the collapse of the international economic order (it finally came in 1973 when the dollar was devalued 40 per cent against the deutschmark) which the Euro-dollar spending spree helped to bring about. Rather than presenting a novel challenge to resurgent western Europe the United States, at the time Servan-Schreiber was writing, was ceasing to be able to sustain its post-war dominance; if there ever had been an "American challenge" it was already receding.
The European Revenge, which is sub-titled "how the American challenge was rebuffed", requires Servan-Schreiber's thesis to support its own antithesis and the trouble is that the authors are too knowledgeable and too good as reporters of the business world to really believe in it. One may sympathise with their wish to use a previous best-seller as an Aunt Sally in the hope that their book may take off in the United States, where the reading market is ever eager for modish capsulisations and is at present masochistically receptive to diagnoses of American failure. Robert Heller, who is the editor of Management Today, and Norris Willett, a former colleague from the Financial Times stable, don't seem to be clear themselves about whether it was the collapse of the dollar in 1973 which turned the Atlantic table (which could be turned again as a result of the energy crisis Which broke loose with the Yom Kippur war 'later in that same year) or whether there really was an "American Challenge" which really was rebuffed by a European technology and management which became a match, or more than a match, for the Americans.
They are unable to connect their macroeconomic speculations with their micro-economic investigations and how many micro's make a macro is what nobody knows. What the book really is, therefore, is not what it pretends to be — an account and explanation of a dramatic reversal of fortunes in a struggle for superiority between the United States and western Europe — but an excellent analysis of a number of European business success stories and some failures with special reference to the absorption, adaptation or rejection of American business techniques. Most interesting of all are the accounts of new and more human production techniques, for example at Sweden's Volvo, and the experiments in "flexitime" (choosing your own working hours) which are spreading rapidly from Germany's Messerschmitt-1301kow-Blohm. In these and other developments Britain lags behind.
A comparative study of the competitiveness of the American and western European economies would have to cover a much wider field, and the authors scarcely mention the role of governments or the social pressures and levels of popular expectations. Surely the first measure of economic performance, absolute or relative, is the ability to satisfy personal and social need, and not the flow of trade, or investment funds? Where I suspect they are right, however, is in the emphasis they place on cultural differences. They show how size was a god which often failed. They point to the fundamental American error of assuming that Europe would become a homogenised market on the model of the United States, whereas in fact growing affluence seems to have reinforced individualistic and national tastes. They also show how the more humane European traditions of management proved better suited than the ruthless American approach of dealing with the problems of human relations in industry, which exploded across western Europe from 1968.
The reaffirmation of cultural differences on the two sides of the Atlantic means neither defeat for the United States in a battle for economic superiority, nor necessarily a weakening of Atlantic partnership in politics and defence. If the "American era", or at least the Truman Era, in some sense came to an end with the dethronement of the dollar in 1973, it also perhaps marked the ending of the illusion that economic success on an increasinglY American scale would result inevitably in a way of life increasingly on the American model. The movies, the automobile, the motorway, coca cola and the quick lunch superficially made it seem so but Mr Heller's and Mr Willatt's fascinating probings into European business mores support my belief that the next chapter of transatlantic relations will be based on older perceptions — moral, cultural and political — of the differences between the old New World and the new Old World.