I’ve just finished reading Amy Chua’s Day of Empire: How Hyperpowers Rise to Global Dominance–and Why They Fall. The thesis is that over the course of history, there have arisen a few “hyperpowers”–nations which overwhelmingly dominate the rest of the world at that time. The United States is the latest of these hyperpowers. Key to the rise–and fall– of these empires has been diversity and tolerance, especially in order to utilize and incorporate talent from subject peoples. In the case of the US, it is not the incorporation of subject peoples, ala the Roman Empire, but the openness to immigration which supplies this talent.
While she mentions at the problem of forging a unified identity, it is not until the end of the book that she get around to discussing the most important element – what she calls the problem of “glue.” In other words, for any of these hyperpowers to sustain themselves, there must be something that holds them together. In the case of Rome, this intangible was Roman citizenship. When this glue disappears, as the case of Indian leaders finally rejecting the British Empire after World War I, the empires crumble.
The challenge facing the US, as she sees it is maintaining some glue. This is especially problematic as components of the American hyperpower system are outside of our boundaries. Unfortunately, this is the weakest part of the book. One suggestion she raises is that multinational corporations and outsourcing are really a form of glue:
The most successful hyperpowers of the past invariably found ways to co-opt and enlist the services of local elites, providing these elites with a stake in the hyperpower’s success and a sense of identification with its institutions. This “glue” was essential to their strength and longevity. America, as we have seen, does not have a foreign legion or civil service that it can staff with native-born populations. It does, however, have Google India and Microsoft Ukraine, which can serve as twenty-first-century analogs. If America cannot give foreigners prestigious governmental or military positions-as Rome and, to some extent, Great Britain did–it can give them prestigious and lucrative positions in its corporations.
Not every outsourced job will produce the “glue” that America needs; it is much debated whether low-wage garment workers at American-owned factories in Guatemala feel on the whole stronger or weaker ties to the United States as a result of their employment. But for those foreigners who obtain well-paid jobs in American-owned enterprises, and especially for those who become managers and executives, U.S. multinationals can unquestionably provide people outside the country’s borders with a sense of gain from America’s prosperity, a real stake in America’s continued growth, and an affiliation with America’s institutions. It is no coincidence (although other factors of course contribute as well) that India, one of the chief beneficiaries of U.S. outsourcing, is also one of the few countries in which popular attitudes toward America have remained strongly positive.
(Days of Empire, p. 340)
This raises an intriguing question, however. Multinational corporations are attempting to shed their “multinational” identities, which still imply home and host nations. They are rapidly becoming (or trying to become) “global enterprises. Or at least formerly US based companies are seeking this path. As Sam Palmisano, CEO of IBM recently put it in a Wall Street Journal interview “Spinning a Global Plan”, “If you’re going to be a global entity, you don’t want to be viewed as a foreign multinational.”
This is not to single out IBM. Few US-based companies have worried more about and done more to promote US economic competitiveness. But IBM sees itself as naturally evolving into a global enterprise.
If this is the direction corporations are headed, what is it that they supposedly are holding together when they act as glue? Does the Indian programmer who becomes an IBM manager gain a sense of sharing in American prosperity or IBM’s prosperity? Does the Germany manager gaining a taste for that American institution, the Super Bowl, rather than the World Cup? Are the emerging global enterprises the glue that holds the American hyperpower together? Or are they, as the critics of global capitalism and the multinational companies might claim, themselves the next hyperpower?
I don’t have the answer to these questions. And I don’t know if companies could even play any role as a hyperpower. I do know that there is more and more concern about the nexus of corporate and country interests. Just yesterday, in two separate meetings on two separate economic topics, someone raised the issue. Clearly, no one believes the old saying “what is good for GM is good for the US.” It may not have been really true when it was first uttered. But it typified a more nation-based corporate mindset. That mindset is long gone – for good or ill. In its place is something we have yet to truly understand.
Ms. Chua’s book touches upon this topic in an interesting way. Having laid out this interesting thesis, I hope she will take the next step in her analysis. Otherwise, I’m afraid that her thesis may have been overtaken by the changing reality.