The third industrial power
NICHOLAS DAVENPORT
So President Johnson has finally decided that he cannot destroy the communist forces of North Vietnam without destroying the morale and unity of the United States. The economic consequences of this tremendous decision are far reaching. If peace really does return to south-east Asia the underdeveloped half of the world can renew its hope that powerful Ameri- can aid will once again come to its rescue. On the other hand, the fully developed part of the world will once again be alarmed by the thought that the immense industrial power of America, sustained in future net by war but by a domes- tic boom centred on its Great Society, will finally engulf it. Indeed, the prospect of peace in Vietnam must now be frightening General de Gaulle as much as the select arms manu- facturers of the United States. As the Stockholm conference on paper gold revealed, the French are obsessed by the idea that American paper money will finally take over the world. Their objection to the SDR scheme cannot be under- stood except on the basis of this deep anxiety.
The European peril as de Gaulle sees it was widely discussed last year in France after the publication of a best-selling book Le Defi Americain by Jean-Jacques Servan-Schreiber, the distinguished editor and author of Lieu- tenant en Algerie. In fifteen years, he said, the third industrial power in the world—after the United States and the Soviet Union—could be not Europe but American industry in Europe. Already today the organisation of the Common Market is essentially American. We have to choose between making Europe the centre of an autonomous western civilisation or allowing her to become an annexe of the United States. The top direction of industry in Europe already derives from Harvard, Stanford and Berkeley. The American expeditionary force, he warned, may quit Vietnam, where it has nothing to gain and everything to lose, but American industry will not leave Europe where it never ceases to advance and impose its power.
From beginning to end this book poured out statistics to prove its indictment of the Ameri- can conquest of Europe—a war won without armies and armaments but waged by money and technology and the power of management organisation. If the tragedy is already upon us, he 'concludes, 'son denouement West pas ecrit.' This explains why M Debit fought so fiercely at Stockholm to hold up the 'paper gold' of the SDR and why General de Gaulle is calling for a conference to discuss a new monetary system based on gold. They are determined to destroy the power of the American paper dollar to take over their Common Market.
The same alarm is sounded by a new book The American Takeover of Britain (Leslie Frewin 35s) written by two popular journalists, James McMillan and Bernard Harris. It is too journalistic for my taste but it brings out clearly enough how our important industries—cars, computers, oil, chemicals, cos- metics, detergents, advertising—are dominated by American firms. Ford, General Motors, Chrysler and Goodyear; Standard Oil, Texaco, Mobil and Continental; Heinz and General Mills; Procter and Gamble; Pfizer and Bur- roughs; Gillette, Hoover and Kodak; um, Texas Instruments and Stromberg-Carlsson. The American stake in British industry„„they say, is now more than fifteen times larger than it was in 1939; more than a thousand American firms are established in the tar (the number is actually around 1,600); more than.half a million workers are employed by American companies which produce a tenth of the British output of manu- factured goods. By the late 'seventies this pro- portion, they add, will have risen to 20 per cent.
Like M Servan-Schreiber they ask how far our economic dependance on the United States compromises our ability to remain politically independent. They quote the horrible words of the American writer, Ludwell. Denny: 'It is perhaps no longer an exaggeration to use the trite phrase—the Americanisation of the world. . . . There may have been some excuse for Britain on her poor island to go imperialist. There is none for us on a near-continent on which to thrive. But we are not without cun- ning. We shall not make Britain's mistake. Too wise to try to govern the world, we shall merely own it.'
I was discussing the threat of an American industrial takeover in these columns a year ago. The gross national product of the United States is now around $800,000 million which is in excess of the combined national product of all the great industrial nations outside the com- munist bloc. Its output capacity is over two and a half times that of the Soviet Union. By 1975 the American GNP will be close on $1,140,000
million a year and the physical capital stock of the country will have a value of $1.6 trillion! The economic problem posed by the trillion dollar potential of the American economy is to create the jobs to engage its manpower. Ameri- can industry will have to infiltrate into the industries of the outside world to find them. That is why the French are increasingly alarmed by the power of the 'almighty dollar.'
We on this island will not be so alarmed by American infiltration as our neighbours on the Continent. On the whole American industrial investment here has helped us by bringing new competition and new management techniques into British industry. The proportion of British industry held by American firms is only around 10 per cent as against three-fifths in Canada. The total American investment in the UK has been running at around $500 million a year, which is not excessive, being less than half the annual American investment in the EEC. The American managements are not always sensi- tive to British attitudes—witness the Roberts- Arundel row—but on the whole they pay high wages and are not resented by British labour.
The end of the Vietnam war, when it does come, will certainly change the character of the fight between the French bloc and the Ameri- cans over the international monetary system. It is obvious that the Americans will never agree to writing up the price of gold while they have an inflation on their hands but if the inflation ends with the coming of peace in Vietnam and if the deficit on the American balance of payments is restored to a normal figure of around $1,000 million, there need be less friction between the two sides. The Ameri- cans might then even agree to adjusting the price of gold upwards if the price on the free market has remained at around $40 or above. But the threat of the American domination of European industry will remain. Britain, in par- ticular, will have to decide whether it wants to become the fifty-first state of the United States or an adjunct of the European Common Market. It seems a pity that we cannot remain ourselves—an industrial island trading in sophisticated goods with the whole world, in- cluding the communist bloc, without being owned by either side of the Atlantic.
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