Americas Cultural Challenge Abroad

HARVEY B. FEIGENBAUM
America tends to dominate markets for popular culture, especially
in the areas of television and film. Recent trends have tended to reinforce incentives to import American audiovisual and film products abroad. Anxiety
about the impact of these American imports has led many countries to pursue
policies aimed at protecting their national cultures. While technological change
has made such measures more difficult, nevertheless some techniques work
better than others. This paper examines the problem of Americanization by
asking the following questions: First, is Americanization a problem? Second,
what has been done about it? And finally, are there smart practices likely to
emerge in the new environment of market-driven culture?
This paper argues that Americanization has significant economic and
political consequences. It has economic consequences because cultural diversity is a public good that provides economic benefits and encourages innovation. The paper argues as well that Americanization affects the way in which
people think about politics. The complex political spectrum Europeans and
others have known is gradually being replaced by the more-limited American
spectrum, reducing peoples sense of their political options. The argument is
drawn from a larger, long-term project on the political economy of film and
television in advanced industrial societies. Since the mid-1990s, I have conducted interviews with a wide array of company executives, policymakers,
artists, and scholars involved in the film and television industries of several
countries. I have visited facilities and have conducted interviews in France,
Britain, Italy, Germany, Belgium, South Korea, Australia, New Zealand, and
Canada over the course of this period. In an effort to learn exactly how the
industry worked, I also visited Hollywood on several occasions and took part
in the production of films and television shows in Los Angeles, New York,

HARVEY B. FEIGENBAUM is professor of political science and international affairs at the George
Washington University. He has published The Politics of Public Enterprise and Shrinking the State
(with Jeffrey R. Henig and Chris Hamnett), among other books and articles on political economy.
He is a frequent commentator on American, Canadian, and European media.
Political Science Quarterly

Volume 126 Number 1 2011

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Paris, and Sydney. Because many interviews were accorded to me in confidence,

I have tried to limit references as much as possible to publicly available sources.
It is probably helpful at this point also to declare what this article is not
about. It is not about the influence of American culture on the Islamic world,
at least, not specifically.
Since the horrifying events of September 11, 2001, a great deal of concern
has been focused on perceptions of the United States in Muslim societies. In
fact, even before those traumatic events, Samuel Huntington alleged a clash
of civilizations, initiating a polemic that continues to this day.1 Consequently,
much ink has been spilled in both the popular press and in scholarly journals
about the impact of America on Islamic societies and speculations as to
whether this at least partially explains that grim September morning. A number of very serious scholars have addressed the topic, all of them more equipped
to understand the conflict than I.2 As a student of advanced industrial societies,
and especially of Western Europe, I did not feel that I could usefully add to
that debate. However, while the argument put forth in these pages is not
specifically addressed to Americas confrontation with some members of the
Islamic world, neither does it exclude them. Americas impact on global cultural diversity is an issue of general concern.

AMERICANIZATION
Many people, especially in the United States, associate a fear of Americanization with the French. In many ways, France is almost an ideal-type in its battle
with Americanization. The French, after all, are famously concerned with
expelling anglicisms from their language: computer is replaced with ordinateur,
jet by avion raction, e-mail by couriel. While the population there has often
viewed such efforts, especially the Toubon Law,3 as simply political buffoonery
aimed at playing to the chauvinism of the conservatives political base, the concern lies not only with the nationalistic right. The political left was not happy
with the opening of Eurodisney in the Paris suburbs, and much of the resistance to globalization, symbolized by such movements as Jos Bovs crusade
against McDonalds, comes from a perceived threat to French and European
folkways. The French are clearly the strongest, though hardly the only supporters of the notion of the cultural exception: that culture policies should

Samuel P. Huntington, The Clash of Civilizations? Foreign Affairs 72 (Summer 1993): 2249.
For example, Marc Lynch, Voices of the New Arab Public (New York: Columbia University
Press, 2006); Benjamin R. Barber, Jihad vs. McWorld (New York: Ballantine Books, 1995); Peter
J. Katzenstein, Walls between Those People? Contrasting Perspectives on World Politics, Perspectives on Politics 8 (March 2010): 1125; Joseph S. Nye, Soft Power (New York: Public Affairs,
2004); Fareed Zakaria, The Post-American World (New York: W.W. Norton, 2008); Martha Bayles,
Americas Cultural Footprint (New Haven: Yale University Press, forthcoming).
3
Rpublique Franaise, LOI n 94-88 du 1 fvrier 1994. 2 February 1994.
1
2

CULTURAL CHALLENGE

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be exempt from neoliberal trade agreements, most especially those under the
World Trade Organization.
The French are not alone in this worry, of course. Italians launched the
slow food movement, Canadians try to preserve northern culture,4 and
altermondialistes (the new French expression for opponents of the current
capitalist version of globalization) are represented by virtually every nationality on the planet.5 Nor is the concern limited only to those outside the United
States. A bestseller by the respected political theorist Benjamin Barber6
mourned the impact of American-style capitalism on the globe, with globalization offering people only the options of consumerism (McWorld) or
primativism (Jihad). Freedom is reduced to the right to choose among
items for purchase, with the only alternative a depressing variety of primordial barbarisms.

Culture, Ideas, and Americanization

The argument I would like to make is that not only are many countries justified in viewing Americanization as a threat to their cultures, the problem may
be considerably worse. But allow me to put my argument in context.
Most historians date Americas domination of the world film market to the
interwar period. World War I had disrupted European film production, while
Hollywood was able to produce movies and perfect the studio production
system. Indeed, some locate the beginning of American dominance with the
British decision to impose a tariff on the foreign film trade in 1916. The result
was that London ceased to be a center of world distribution and Hollywood
studios opened direct distribution offices in Europe, South America, and Asia.7
Victoria de Grazia notes that while the fascist regimes of Germany and Italy
did, indeed, try to rival Hollywood, subsidizing their own filmmakers while
censoring and excluding American imports, the Second World War effectively
ended the competition.8 Of the major industrial powers, only Japan held
its own, but even they ceded to U.S. dominance in their own markets by
the 1970s.9
Owing to the relative newness of the technology and the tendency for
many countries to rely on public broadcasters until the 1980s, American
Kevin Mulcahy, Cultural Protectionism v. Cultural Imperialism: U.S.Canadian Cultural Relations, unpublished manuscript prepared for the Center for Art and Culture (2000), 8.
5
Sciences-Po, Colloquium: Le Mouvement Altermondialiste, November 2003.
6
Benjamin R. Barber, Jihad vs. McWorld (New York: Ballantine Books, 1995).
7
Ruth Vasy, The Worldwide Spread of Cinema, in Geoffrey Nowell-Smith, ed., The Oxford History of World Cinema (Oxford: Oxford University Press, 1996), 57; Victoria de Grazia, Irresistible
Empire: Americas Advance through 20 th-Century Europe (Cambridge: Harvard Belknap, 2005), 293.
8
De Grazia, Irresistible Empire, 2005, 319335.
9
Harvey B. Feigenbaum, Hegemony or Diversity in Film and Television? The US, Europe and
Japan, Pacific Review 20 (September 2007): 371396.
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dominance of the small screen was less pronounced. However, the U.S. balance of trade in television programs became overwhelmingly positive as
private channels proliferated.10 The exponential growth of private television
networks financed by advertising, added to a flood of new media options
provided by cable, satellites, and the Internet, has led to a Hobbesian competition for market share amid an overall audience that has barely expanded.
Simple arithmetic has meant that fewer and fewer people are watching any
given show or movie. Private networks, now the majority in most countries,
are thus increasingly cost-sensitive, and have evoked a strong preference for
importing cheap American products over locally produced television shows,
despite near-universal preferences of audiences to see their own cultures on
television. For example, in a comparison of the most-watched television shows
in Australia, France, Italy, Sweden, and the United States, only in Australia was
the most-watched show an import.11 The film industry is somewhat different,
but virtually all non-American film industries survive by virtue of subsidy
programs or favorable tax treatment, often added to protectionist measures
on film exhibition. Neoliberal policies are increasingly a threat to these measures as well.
This American dominance of film and television is important for those
who are interested in politics and for those who are interested in political
science (that is, the way we try to understand politics). The most important
new movement in political science in the last decade or so has focused on the
role of ideas in shaping politics. In international relations, this has taken the
form of constructivism,12 which departs from earlier notions (most especially
realism) in positing that interests of states and peoples are socially constructed. Thus, politics can only be understood through the lens of subjective
perception, and ultimately, ideas, values, and norms are intrinsic to understanding behavior. In its most extreme form, this approach reaches the same
impasse as phenomenology or the sociology of knowledge school associated
with 1930s Frankfurt: can anything be known if everything is subjective? The
improvement that constructivist theorists have made to the earlier phenomenological formulations is in asserting that reality is an inter-subjective construction, that is, a shared view of the world. Their difference with the earlier
theories asserting a sociology of knowledge is that the inter-subjectivity

10
European Audiovisual Observatory, Yearbook 2008, chap. 2, accessed on the website of
the European Audiovisual Observatory at http://www.obs.coe.int/yb2008/public/CNumPage.html,
14 July 2009.
11
Television: Most-watched Programs, International Herald Tribune, 23 May 2005.
12
John Gerald Ruggie, What Makes the World Hang Together? Neo-utilitarianism and the Social
Constructivist Challenge, International Organization 52 (Autumn 1998): 855885; Nicholas Onuf,
Legal-Historical Rule-Based Approaches to Constructivist IR Research, (paper presented at the
colloquium (Re)Constructing International Relations Research, University of Southern California,
6 October 2001).

CULTURAL CHALLENGE

111

noted by the theorists of the 1930s was based on class. Constructivists today
do not make this assumption.13
However, if we are willing to accept more-limited assumptions, and simply
posit that ideas are important, and that they are also intrinsic to the formation
of interests, then we find common ground with the latest movement in comparative politics: ideational analysis, that is, ideas matter. Indeed, the rejection of logical positivism by a great many, perhaps most, comparativists and
constructivists, gives them epistemological common ground, as well. In both
fields, the degree to which reality is viewed as subjective is a matter of debate.
Once we concede that ideas are important, then the source also becomes
important. To the extent that ideas generate ideas ( pace Marx), I shall try to
argue that cultural diversity is a source of intellectual innovation and that a
reduction in cultural diversity, consequently, negatively affects the capacity
to innovate and influences the nature of politics. I shall also try to argue that
this lack of diversity has economic roots ( pace Hegel).
First though, it is important to note that the relation between American
cultural products and the behavior of those who import them is not simple
or mechanistic. That is, I do not concede the assumptions of hypodermic
or magic bullet theories as understood in the communications literature.
These theories present the relationship between media and behavior as direct
and unsubtle, in which people absorb the claims and ideas of the media wholly
and uncritically, and then behave as the medias message intends.14 For one
thing, American movies (if not television shows) are quite varied and eclectic.
Not all films (or television shows) espouse the same values or ideas, as the
works of John Wayne and Michael Moore bear testimony. But if it makes
sense to talk about national cultures at all, it is reasonable to assume that a
wide variety of films exported by the United States share some set of values
one might associate with America.15 The process of acquiring these American
values and habits is gradual, subtle, and, for any one receiving culture, incomplete. Moreover, not all who are exposed to American culture necessarily react
the same way. American values are always mediated through the lens of
the receiving society, and the impact is greater in some places than in others.
Cumulatively, the effect is not necessarily one of cultural domination, but there
is very probably some impact.
The process of acculturation is frequently subtle and indirect. James
Scott has noted that even in the developing world, subordinate groups develop their own interpretations, understandings, and readings of ambiguous

13

I am grateful to Peter J. Katzenstein for pointing this out in an e-mail, 19 April 2010.
See, for example, David Croteau and William Hoynes, Media Society: Industries, Images and
Audiences. 2d ed. (Thousand Oaks, CA: Pine Forge, 2000), 237238.
15
Lary May, The Big Tomorrow: Hollywood and the Politics of the American Way (Chicago, IL:
University of Chicago Press, 2000), 1 and passim.
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terms.16 Moreover, it is reasonable to assume that as the distance between

the consumers and producers of movies and television shows increases, the
cultural references become less familiar, more ambiguous, and consequently
more open to local interpretation.17 The messages that are supposedly transmitted by American cultural products are often transformed. Consider the
American soap opera, Dallas, which was widely seen around the world. A
famous study by Elihu Katz and Tamar Liebes looked at how an Arab group
interpreted the story they saw in one American television show. In Mutual
Aid in the Decoding of Dallas: Preliminary Notes from a Cross-Cultural
Study, Katz and Liebes found
One of the Arabic groups actually misread the information of the programme in
a way which arguably made it more compatible with their cultural horizon. In the
episode viewed, Sue Ellen had taken her baby and run away from her husband
JR, moving into the house of her former lover and his father. However, the Arab
group confirmed each other in the more conventional readingin their terms
that she had actually gone to live in her own fathers house. The implications of
this radical translation of the events of the narrative must at least be to undermine
the notion that texts cross cultural boundaries intact.18

Thus, one needs to be cautious in judging the impact of American cultural

exports. That said, not everything is lost in translation. Thanks to American
exports, people often become more familiar with American folkways than
with their own. Examples abound: accused in French courts address the judge
as Vtre Honneur, rather than the proper address, Monsieur le Juge.
German law students query their professors on how to approach a jury, not
knowing that Germany has no juries.19 Both groups, of course, had gotten their
ideas from American television shows. To the extent that television screens and
movie theaters play American products, they take the place of local films and
programs. They become part of the discourse, and ultimately provide many
of the symbols of everyday speech. Moreover, symbols are the shorthand of
politics20 and imported categories can constrain thought. For example, the
American notion of the political left does not extend beyond liberal, which
for Europeans is a category of the right, yet British commentators, for whom
liberal formerly designated the political center, have begun using the American
terminology. In a piece on cultural diversity, no less an analyst than the
very acute Desmond King qualified left-of-center British newspapers as the
16
James C. Scott, Weapons of the Weak: Everyday Forms of Peasant Resistance (New Haven: Yale
University Press, 1985), 338.
17
Harvey B. Feigenbaum, The Production of Culture in the Postimperialist Era: The World vs.
Hollywood? in David G. Becker and Richard L. Sklar, eds., Postimperialism in World Poltics
(Westport, CT: Praeger, 1999), chap. 4.
18
John Tomlinson, Cultural Imperialism: A Critical Introduction (London: Pinter, 1991), 48.
19
Conversation with a German law student at the Friedrich Hebert Foundation, 2008.
20
Fred Dallmayr, Language and Politics (South Bend, IN: University of Notre Dame Press, 1984).

CULTURAL CHALLENGE

113

liberal-leaning press.21 This articulation thereby accepted the American

categorization of politics as a simple dichotomy between liberal and conservative, rather than the historically wider British spectrum that distinguished
between the nineteenth-century concept equating liberalism with the left, and
the more-sophisticated view occurring later in Europe, which saw liberalism
as the archaic left, surpassed by social democratic and socialist concepts.
The symbolic and linguistic aspects of politics are hardly trivial. They
trigger emotions and are used to both persuade and manipulate. Much of
the effort in political campaigns is devoted to how arguments are framed, with
each side doing its symbolic best to evoke images favorable to its side.22 Innocent and apparently apolitical reference points, such as the family or the
police, become symbolic cues that redirect political discourse.
Moreover, access to popular images approaches the very root of human
thought. A wealth of literature from the fields of psychology and cognitive
science documents the widespread view (well known to advertisers and political campaigners) that people think in metaphors and that metaphors have
consequences.23 That which is familiar often becomes translated into a sense
of comfort and identity. This is the stuff on which nations are constructed and
political regimes are established.24 It is also the stuff upon which oppositions
to regimes are built, as Gramsci recognized from his prison cell.25
However, the issue is not simply a fear of U.S. domination. At a systemic
level, Americanization is the contrary of cultural diversity. The argument here
is that cultural diversity is valuable to everyone, not merely those who fear
their amalgamation into a larger whole.26 Indeed, the defense of cultural diversity has become one of the key missions of the United Nations.27 Just as education is enriched by including people from diverse backgrounds, the vibrancy
of an economy or a society is enhanced by the injection of new ideas. The
latter are often stimulated by reference to and comparison with the ideas from
exogenous cultures.

21

Desmond King, Americanisation and Cultural Diversity at Home and Abroad: Cultural Factors in
the Decision Making of the European Union (Athens: Etablissements Emile Bruylant, 2002), 167.
22
George Lakoff, Dont Think of an Elephant! Know Your Values and Frame the Debate (White
River Junction, VT: Chelsea Books, 2004).
23
George Lakoff and Mark Johnson, Metaphors We Live By (Chicago, IL: University of Chicago
Press, 1980, 2003); Dallmayr, Language and Politics; Gemma Fiumara, The Metaphoric Process
(London: Routledge, 1995).
24
Benedict Anderson, Imagined Communities (New York: Verso, 1991).
25
Margaret Kohn, Civic Republicanism versus Social Struggle: A Gramscian Approach to
Associationalism in Italy, Political Power and Social Theory 13 (Autumn 1999): 201235.
26
Organization of American States, Recommendations, Theme 1, Meeting of Experts, Vancouver,
Canada, 19 March 2002, unpublished.
27
UNESCO, 2001, accessed at http://portal.unesco.org/culture/en/ev.php-URL_ID534321&
URL_DO5DO_TOPIC&URL_SECTION5201.html, 31 December 2010.

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Many governments fear that the dominance of American popular culture

puts the vibrancy of all societies at risk. The very market forces that spread
American audiovisual products may be leading to greater homogeneity. Thus
it is the improbable dialectic of global markets that in the long run, they reduce
rather than promote choice.28
The argument I wish to pursue is that while ideas matter (as do norms),
they are limited by material conditions. This aspect of the problem of Americanization recalls Feuerbachs famous dictum that a man thinks differently in
a palace than in a hut.29 Material conditions may not always have the direct
relation that Marx and Engels attributed to them in their analysis of the division of labor and its effect on thought, but it is precisely the impact of material
conditions brought about by worldwide markets that have the potential to limit
peoples abilities to think creatively and politically. Marx and Engels may have
been wrong when they declared so forcefully that in every epoch the ideas of
the ruling class are the ruling ideas, but it is very likely that ideas of a culture that dominates via the market, dominate nonetheless.30 In a related vein,
Gramsci considered the importation of Henry Fords assembly line techniques
for mass production as a form of Americanization.31
It should be acknowledged, as the historian Richard Kuisel32 has pointed
out, that a number of academics reject the notion that Americanization is
harmful. These critics might be placed in several camps. The first sees importing societies as modifying American cultural imports to the point where they
are fundamentally different from the U.S. version and have thus been assimilated as an addition to the importing culture. This is supported by the Scott,
Katz, and Liebes studies cited above, and leads us to be cautious about the
claims we make. It does not, however, deny that America has a cultural impact.
A second critique sees culture as a moving target, constantly changing,
with neither American nor non-American cultures easily definable or static
enough to recognize an effect of domination. A third critique sees Americanization as simply a narrow aspect of globalization, with America as affected as
any other culture, and with many countries exporting their cultures to each
other. Finally, a fourth critique, in Kuisels lexicon, sees behavior and identity
as separate; French teenagers may wear blue jeans, but this does not mean that

Harvey B. Feigenbaum, Public Policy and the Private Sector in Audiovisual Industries, UCLA
Law Review 49 (August 2002): 17671781.
29
From The Essence of Religion, quoted in Friedrich Engels, Feuerbach: The Roots of the Socialist
Philosophy (New York: Cosimo, 2008), trans. Austin Lewis, 83.
30
Karl Marx, Selected Writings, ed. Lawrence H. Simon (Indianapolis, IN: Hackett Publishing,
1994), p. 121.
31
King, Americanisation and Cultural Diversity, 151.
32
Richard Kuisel, Debating Americanization, in Ulrich Beck, Natan Sznaider, and Rainer
Winter, eds., Global America? The Cultural Consequences of Globalization (Liverpool: Liverpool
University Press, 2004), chap. 5.
28

CULTURAL CHALLENGE

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they think and act like Americans. Kuisel finds reasons to discount all of these
critiques. Neither Coca-Cola nor McDonalds significantly modified their formulae to please the French market, and while any countrys national culture
may be difficult to define and may have many aspects, this does not mean that
national cultures do not exist, nor that Americanization is not a problem.33 He
argues that on the last issue, research is not yet definitive, but is suggestive that
Americanization is not trivial.
Of course, for some observers, Americanization is an improvement over
the status quo. It is not hard to see American values as improving the lives
of women in oppressive, fundamentalist cultures of the third world, where
not only second-class status, but frequently pain and disfigurement (such as
clitorectomy) are inflicted on the female members of the polity. Nor should
one see this as a benefit reserved to the third world. The American version
of English was a form of linguistic liberation for those on the wrong side
of the class divide in the UK. As Oxford historian Ross McKibbin put it,
For the working classes use of Americanisms was a means of escaping from
Cockney [sic] without adopting BBC English.34
Boon or bane, Americanization has had an impact on the rest of the world.
Indeed, one need look no further than Great Britain for ample evidence that
American culture has had a serious impact. As early as 1931, the Radio Times
concluded that Americanization was responsible for new manners of thinking, for higher pressure of living, for discontent among normally contented
people, for big ideas, and for Oh yeah.35 Nor is this opinion limited to the
more impressionistic writers of the inter-war period. As recently as the beginning of the new millennium, the sociologist A.H. Halsey, working from the
2000 British Social Attitudes Survey, could conclude that Britain had become
hopelessly Americanized.36 Evidence of Americanization is, of course, not
limited to Britain. A McDonalds opens approximately every four hours37
around the world, and they are often greeted as welcome signs of modernization.38 While most societies prefer seeing their own cultures on television,

33

May, The Big Tomorrow.

Ross McKibbin, Classes and Cultures England 19181951 (Oxford: Oxford University Press,
1998), 512513.
35
Ibid.
36
Quoted in King, Americanisation and Cultural Diversity, 164.
37
Daniel Eisenberg, Matt Baron, Leslie Berestein, Mark Schultz, and Adam Smith, Can
MacDonalds Shape Up? Time, 30 September 2002, accessed at Time Online at http://www.time.
com/time/magazine/article/0,9171,1003335-1,00.html, 13 July 2009. By 2008, McDonalds had over
31,000 restaurants, the vast majority of which were outside the United States. McDonalds Corporation
Annual Report, 2008, 19, McDonald Corporation Annual Report Archives, accessed at http://www.
aboutmcdonalds.com/mcd/investors/publications/annual_report_archives.html, 31 December 2010.
38
Meg Greenfield and Paul Farhi, series in The Washington Post, 25, 26, 27 October 1998; Thomas
Friedman, The Lexus and the Olive Tree (New York: Farrar, Straus, and Giroux, 2000), 235236.
34

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in 2005 six of the top ten shows in Australia were American, as were all of the
top five.39 As often as not, even the French prefer American movies.40
For these reasons, countries as dissimilar as France and Australia, Korea
and Canada have implemented mechanisms to protect their national cultures
from assimilation. Characteristic of this concern, the Maastricht Treaty of 1991
amended the Treaty of Rome with Article 151 (replacing Article 128) and now
says that the European Union (EU) must respect and promote the diversity
of its cultures.41 Among many variations, all have taken a special interest in
audiovisual industries, and all have taken measures to protect producers in the
areas of film and television. What follows is an examination of such policies.

PUBLIC POLICY

IN THE

AUDIOVISUAL SECTOR

Concern over cultural diversity is a relatively new focus for many countries.
Public policy in the audiovisual sector, which in this paper is limited to television and film, has historically been focused along three poles: setting of
technical standards, regulation of the internal market, and supervision of
content. Regulation of the internal market has been somewhat different,
as one might expect, in liberal countries like the United States, where the concern has focused on competition and the avoidance of monopoly, from moreinterventionist countries, where the market has for a long time been the
monopoly of a public service provider. In the area of film, the private sector
has had a larger role in all advanced capitalist countries.

Technical Standards
The issue of technical standards has largely been one of establishing a collective good for producers and distributors to avoid cacophony on the spectrum
and to allow economies of scale in the case of competing standards such as
NTSC (National Television System Committee adopted by the United States
and Japan) and PAL (Phase Alternate Line adopted by most of Europe) or
SECAM (Squentiel Couleur Mmoire adopted by France and Russia).
The technical standards were not simply debated in terms of developing a
collective good, but as different countries developed different standards, these
became issues of industrial policy and international competition. This was not
only true of Frances attempt to encourage others to adopted its SECAM
system, but similar debates cropped up again in the 1990s as governments
considered the advantages of different high-definition television systems.
Here, Japans much-vaunted MITI (Ministry for International Trade and
Industry) ended up backing the wrong horse, as its producers favored an
Television: Most Watched Programs, International Herald Tribune, 23 May 2005.
Kerry Seagrave, American Films Abroad (Jefferson, NC: McFarland, 1997), 272.
41
King, Americanisation and Cultural Diversity, 150.
39
40

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analog system, which became obsolete almost immediately. The Europeans

and Americans waited until a digital standard was available, but even then,
the private sector was divided over which digital standard to adopt. Paralyzed
by private-sector indecision, U.S. regulators could not impose a single standard.
Slow development of digital television was the consequence.

Content Supervision: The Frontlines of Americanization

One of the main differences between the United States and other countries is
the nature of the conflicts over broadcasting content. In the United States, the
issue of content supervision has been one of the main battlegrounds of the
culture wars, addressing issues such as pornography and violence, educational concerns of children, visibility of national minorities, or the amount
and type of advertising deemed permissible. While such issues are also important in other countries, they are only one aspect of the debate over content.
It is obvious that the audiovisual sector reflects a wide variety of the types of
conflicts that are the staple of national politics.
While more honored in the breach than in the observance, media neutrality toward political parties (if not toward the entire spectrum of political
views) is a common goal of most national regulatory systems. When the new
Socialist government took office in Spain, claiming to end the overt use of
TVE (Televisin Espaa) as a propaganda organ, pundits asked, What is
the purpose of government-owned television if it is not to manipulate public
opinion?42 Generally, the British and German systems of public television
have been much admired (and even the French public broadcasters have managed to achieve neutrality, if not respectability), while Italy, with its overt
political colonization of television channels, is viewed as the model to avoid.
Of course, even-handedness toward monied versus impecunious interests is
rarely a consideration. That said, the audiovisual sector offers a good opportunity to observe characteristic relations between state and market, and
between state and civil society. These vary across countries, of course, but
commonalities are instructive.
Most importantly for this paper, attempts by many countries to preserve a
significant amount of broadcast time for nationally produced content form a
major part of these countries cultural policies. The common technique for
the preservation of the public sphere for national cultural content is the
quota.43 While some countries extended a quota regime to cinema, all under
discussion have quotas for prime-time television. Typical is that established in

Alan Riding, Spain May Loosen Iron Grip on Public TV, The New York Times, 27 May 2004.
The term public sphere is associated with the work of Jurgen Habermas, Structural Transformation of the Public Sphere: An Inquiry into Bourgeois Society, trans. T. Burger and F. Lawrence
(Cambridge, MA: MIT Press, 1989).
42
43

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the European Union directive, Televisions without Frontiers, later updated

as the Audiovisual Media Services Directive.44 This directive requires member countries to preserve, where practicable, 60 percent of prime time for
European programming (10 percent from independent European production
companies). While countries have seen the phrase where practicable as a
loophole in the EU directive, even the highly neo-liberal British have tended
to observe the quotas.45 Other member countries of the European Union are
more stringent. Paris preserves for French products 50 percent of fictional
shows (news, sports, and games do not count toward the quota).
Advanced and developing countries have well-articulated policies of cultural protection. The Australians are even more selective than the French. They
reserve 55 percent of programming from 6 A.M. to midnight for Australian
shows, with different quotas for drama, documentaries, and childrens programming.46 Canadians require that 60 percent of evening programming,
60 percent of a years programming, as well as 60 percent of any six-month
period, be reserved for Canadian television shows.47 The Koreans also maintain an elaborate system of quotas to protect domestic television producers
and, ostensibly, Korean culture. Television broadcasters in Korea must limit
foreign films to no more than 15 percent of all programs. On cable, 70 percent
of shows must be Korean (50 percent for science, technology, culture, and
sports channels).48 For further illustration: Nigeria reserves 60 percent of
programming for African content, while South Africa requires that 55 percent
of public television, 35 percent of commercial television, and 8 percent of subscription television be reserved for South African content.49 It is, of course,
worth noting that economic conditions favored these policies. Quotas have
benefitted the domestic producers of television shows and films. While theoretically, one might have expected Hollywood producers to protest, the reality

44

European Commission, Television without Borders, Directive, 89/552/EEC (1989); European

Commission, Television without Borders (renewal), Directive, 97/36/EC (1997); European Commission, (2007).
45
Ben Goldsmith, Julian Thomas, Tom ORegan, and Stuart Cunningham, The Future of
Local Content? Options for Emerging Technologies (Sydney: Australian Broadcasting Authority,
June 2001), 31.
46
Kim Dalton, Doing Business with Australia (address to the CFTPA Conference, Ottawa,
Ontario, Canada, Prime Time in Ottawa; International Day: Focus on Australia and New Zealand,
8 February 2001).
47
CRTC, Building on SuccessA Policy Framework for Canadian Television, cited in Goldsmith,
ORegan, and Cunningham, The Future of Local Content.
48
Sanghyn Yoon and Harvey B. Feigenbaum, Global Strategies for National Culture: Korean
Media Policy in International Perspective, Seoul Journal of Business 3 (Fall 1997): 127146.
49
Harvey Feigenbaum, Digital Entertainment Jumps the Border, Scientific American, 288
(March 2003): 5459; Peter Greenhouse, The Media Business: For Europe, US May Spell TV, The
New York Times, 31 July 1989, accessed at http://www.nytimes.com/1989/07/31/business/the-mediabusiness-for-europe-us-may-spell-tv.html?pagewanted5all&pagewanted5print, 16 July 2009.

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was that in Europe, at least, domestic production capacity never expanded

enough to meet the demand created by quotas. Thus, Hollywood sales were
not affected. However, a new EU study claims that if new media and video-ondemand are taken into account, European films and shows represent 74 percent
of prime-time viewing.50 Indeed, neither level of development nor economic philosophy seems to present barriers to cultural protectionism. Statist countries like
France and Korea apply such protections, but Britain, Canada, and Australia do
also. Nor do the political ideologies of parties allow one to easily predict positions on cultural policy; in Australia, regulation was extended by the conservative coalition, while in France, socialist Jack Lang and conservative Jacques
Toubon introduced policies aimed at thwarting Americanization.51 In the area
of film, the French provide subsidies to cinemas choosing to exhibit French
movies, while Koreans have preferred the stick to the carrot.

Regulation of the Domestic Market

The earliest interface between the state and the audiovisual sector in advanced
industrial countries involved regulation. It may be useful to start with the
United States, which in many respects, is an outlier. The audiovisual sector
in the United States recalls the general pattern of early developers.52 The
pattern among first developers is that commercial development starts without
the (direct) help of the state, and flourishes in the absence of foreign competition. Initially, there were few domestic competitors, but competition grew
quickly in the private and non-profit sectors. Thus, radio followed the product
cycle discovered by Raymond Vernon.53 The monopoly characteristics of the
sector associated with the rapid growth of the Radio Corporation of America
(RCA) led federal officials to become concerned about the abuse of this market,
and an independent regulatory authority was created. What was to become the
Federal Communications Commission (FCC) started first as an organization to
allocate the spectrum, second to control content, and finally, to limit the possibilities of monopoly (RCA was eventually broken up).54
This experience contrasts with Britain and France, for example, which were
late developers in this regard. The latter, like many European countries,
Europa Press Release, European programmes and films represent three quarters of peak viewing time, 28 May 2009, accessed at http://europa.eu/rapid/pressReleasesAction.do?reference5IP/09/
840&format5HTML&aged50&language5EN&guiLanguage5en, 18 July 2009.
51
David L. Loosley, The Politics of Fun: Cultural Policy and Debate in Contemporary France
(Oxford: Berg, 1997).
52
Alexander Gershenkron, Economic Backwardness in Historical Perspective (Cambridge:
Harvard Belknap, 1962); James R. Kurth, The Political Consequences of the Product Cycle,
International Organization 33 (Winter 1979): 134; E.J. Hobsbawm, Industry and Empire (Baltimore,
MD: Penguin, 1966).
53
Raymond Vernon, Sovereignty at Bay (New York: Basic Books, 1971).
54
Robert L. Hillard, The Federal Communications Commission: A Primer (Boston, MA: Focal, 1991).
50

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pursued policies of state-created broadcasters. Though this was not in response

to American competition, thanks to the technological limits of the medium,
which could barely cross the Channel, let alone the Atlantic, the public sector
origins of radio, and eventually television, would mark the sector to the present.
Until the 1980s, the American audiovisual market would be fundamentally
different from the European ones. This, of course, shaped the public sector
institutional environment. American regulators would primarily be confronted
with the problem of avoiding economic abuses in a competitive market, while
the European regulators would primarily be concerned with political abuses
of monopolistic public service providers. However, since many European regulators lacked political independence, they rarely corrected abuses of the government of the day.55
Film industries were, on the other hand, a different story. The evolution
of film companies in the United States and abroad would be much more a
response to economic forces than to political ones. Film was entrepreneurial
on both sides of the Atlantic. The Lumire brothers first outfitted a Lyon caf
to show films in 1895, while Thomas Edison began to consolidate his hold on
Americas East Coast soon afterward. Hollywood came into existence as the
consequence of early filmmakers seeking the twin advantages of a propitious
geography; the sunlit, varied terrain in California was advantageous in itself
and was mercifully distant from the Edison Trust on the East Coast. However,
neither Hollywood nor the rest of the American film industry showed signs
of the economic dominance that was to come. Before World War I, the United
States was a net importer of films from France.56 Indeed, in 1908, the United
States imported 70 percent of its films from France.57 Presciently, Thomas
Edison remarked, The French are somewhat in advance of us, but they will
not long maintain their supremacy.58 He was right. As mentioned above,
beginning with the shift in distribution in 1916, Hollywood increased its
dominance throughout the interwar period and emerged hegemonic by the
end of the Second World War.
American regulation in the postwar period was far more interventionist
than elsewhere. However, this role was primarily left to the courts. The famous
Paramount decision of 1948 effectively broke up the old studio system by
forcing these Hollywood institutions to divest themselves of the theater chains,
effectively ending vertical integration in the industry until the 1990s.
By contrast, European states saw different problems in their film industries. There was little danger of abuse from the fragile European producers
and distributors, but the looming menace from Hollywood seemed to be much

Hillard, Federal Communications Commission; Riding, Spain May Loosen Iron Grip.
John Izod, Hollywood at the Box Office: 18951986 (New York: Columbia University Press, 1988).
57
Douglas Saunders, All the Worlds a Screen, The Globe and Mail, 17 October 2000.
58
Ibid.
55
56

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more of a threat to European markets. Thus, Europeans focused on keeping

Hollywood from completely dominating their markets. Some, like France,
established quotas for American films, first in theaters and then on television.
Virtually all countries offered some form of subsidy to indigenous audiovisual
industries. Even by the year 2000, the need for subsidies to the film sector
seemed unremitting. In addition to national subsidies, European producers
could count on aid from the European Union in the form of its successive programs, Media, Media II, Media Plus, and Media 2007. The main difference in
the latter two of these was not the financial size but the destination of the subvention. While all Media programs subsidized training and production, Media
Plus and Media 2007 added on distribution, and even a small amount for marketing, as well as adaptation to digital technologies.59 Small countries and nonmembers of the EU could, if they were members of the Council of Europe,
expect some help in multicountry coproductions from the Eurimages program.60 Korean cinemas must exhibit Korean films no less than 73 days a year.61
Conditions for regulation changed very substantially by the 1980s and
1990s. The 1980s saw an explosion of broadcasting companies as European
regulators forced their public service broadcasters to give up their monopolies.
Britain had been the precursor of this movement in the 1950s with the establishment of the Independent Television Authority. However, it remained with
only a single ITV (Independent Television) channel for three decades, while
France sold off its first public channel and created four new private channels in
the 1980s. By 2001, there were 92 French cable or satellite networks in addition to the terrestrial broadcasters.62 Indeed, most European countries were
served by cable, satellite, and a host of new terrestrial channels.
This new audiovisual world affected regulation in a number of ways. First,
European regulators began to look more like Americas FCC (on which they
were often explicitly modeled) as managing issues of a complex and competitive private sector became more important than issues of political content. As telecommunication firms began to enter the audiovisual market,
the FCC model became even more relevant. Tony Blair was the first European
leader to take the initiative in encouraging audiovisual and telecommunication
regulators to merge and to emulate the United States.63 Second, the new world
59

Hollywood Reporter, 25 November 2000; Le Matre, 25 November 2000, 21; Sotinel, 25 November 2000; on MEDIA 2007, see Europa: Summaries of EU Legislation, accessed at http://europa.eu/
legislation_summaries/audiovisual_and_media/l24224a_en.htm, 15 July 2009.
60
CSA (Conseil Suprieure delAudiovisuel), Les Chiffres cls de la tlvsion et du cinema (Paris:
Institut National de lAudiovisuel and Centre National de la Cinmatographie, Paris, La Documentation Francaise, 1997), 145.
61
Yoon and Feigenbaum, Global Strategies; Byung-il Choi, When Culture Meets Trade
Screen Quota in Korea, Global Economic Review 31 (December 2002): 7590, accessed at http://
www.mcnblogs.com/mcindie/archives/2006/02/s_korea_to_cut.html, 22 April 2010.
62
Dossier, Le Monde, 78 January 2001.
63
James Harding, Blairs Law of Convergence, Financial Times, 17 October 2000.

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of private television companies directly undercut the cultural protectionist

policies practiced by a number of European and Asian countries. The problems created by the explosion of private broadcast, satellite, and cable stations were both technical and financial. While the 1980s and 1990s saw a huge
increase in television channels, there was no corresponding increase in audience size. This meant not only that the audience had more choices, but that
it would become more fragmented. There would be fewer viewers per television show. The drop in market share for each channel as the number of
channels proliferated became a severe problem. One of the new channels in
France, Channel 5, which had gambled on a high-cost news operation, went
bankrupt almost immediately. The problem was clear: stations that were licensed
by national regulatory authorities and whose signals were by and large aimed at
a specific national audience were economically limited by the size of that audience. If such broadcasters (or cable companies) were to be financed by advertising revenues, there was a clear limit on the amount such firms could pay
suppliers of entertainment as returns on advertising declined due to competition. Neoliberal policies, therefore, were limited by the national organization
of markets.
On the U.S. side of the Atlantic, both the FCC and the Federal Trade
Commission began to look at mergers more benignly. Not only were Time-Life
and Warner Brothers allowed to merge, then allowed to merge with AOL, but
vertical integration was again permitted in the 1990s as the FCC relaxed its
fin-syn regulations, allowing networks to produce their own television
shows.64 The argument justifying these actions was that competition was now
global. As with similar consolidations in the name of global competition, the
benefit of this argument went to the media oligopolists, and disadvantaged
independent producers.
What seems abundantly clear is not only that the forces of American
popular culture are as powerful as ever, but that they are even less diverse than
ever, due to the consolidation of U.S. media corporations and the weakening
position of independent producers.

From Audiovisual to Cultural Policy

While regulation of the audiovisual sector had its roots in solving two collective goods problems, the technical allocation of the spectrum and the regulation of monopoly, intervention in the more broadly cultural sphere, and
especially regarding subsidies to film and television production, were not as
transparently justifiable as audiovisual regulation. Why subsidize culture
when there are hungry mouths to feed and many other needs which seem
more pressing?

64

Feigenbaum, The Production of Culture.

CULTURAL CHALLENGE

123

Arts lobbies in the United States have tried to make economic arguments
to justify spending on culture.65 These tend to be of two types: first, that arts
spending creates spread effects. Spending on the arts generates small businesses with employment consequences such as restaurants around an art
museum or, as is the case with film, spending on film infrastructure attracts
investment (from movie producers) and generates high-paying jobs (electricians, technicians, etc.) in an industry that does not pollute. A second type
of argument focuses on the changing of the economy, with prosperity being
increasingly dependent on the nurturing of creativity and the development
of environments attractive to creative people.66
Like most economic arguments, these are controversial. More than likely,
some arts spending generates spread effects beyond the initial investment,
while other spending does not. Nor can anyone doubt that some creative
people are responsible for generating an awful lot of money. From highly
paid movie stars to brilliant software engineers, this is a truism. However, that
is not to say that all creativity is lucrative, or that most creative people pay for
themselves. The poor, starving artist is not a clich for nothing.
However, while economic appeals for cultural policy do not always fall on
sympathetic ears, there can be little doubt that much of the impetus behind
spending on local film and television production is motivated by high-minded
nationalism and by low-minded pandering to the supplications of lobbies.
And while questioning the logic of subsidies for film and television policies
may be motivated by economic skepticism, it is equally a question as to why
non-American film and television production companies do not challenge
American hegemony. Of course they do.
Some foreign film and television producers are successful. America was a
net importer of films from France before the First World War, after all. More
recently, in the current era of Hollywood hegemony, the one region that seems
almost unconcerned by this particular American challenge is Latin America.
Indeed, many Latin American countries export Telenovellas to each other
and to the rest of the world. The United States imports them for the Spanishspeaking networks serving its hispanophone community, and the newly liberated, post-communist Russia became a major client for a 20-year-old Mexican
soap opera, as its population emerged from 70 years of documentaries about
tractor factories and hung on every plot twist devised in the sentimental
Mexican export. Australians have also been successful exporting television
series (indeed some Australian television shows depend on the British market to break even)67 and have built a reputation for quality films from directors
65
Stephen Jay Tepper, Creative Assets and the Changing Economy, Journal of Arts Management, Law and Society 32 (Summer 2002): 159169.
66
Tepper, Creative Assets; Richard Florida, The Rise of the Creative Class (New York: Basic
Books, 2004).
67
Interview with Australian television producer Ben Grant, February 2005.

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like Peter Weir and Bruce Beresford. Any number of countries can lay claim to
the occasional film that is successful on the international market, from Germanys
Lola Rennt to New Zealands Whale Rider, to the British-produced, Frenchfinanced, Indian-cast melodrama Slumdog Millionaire.
Reasons for Americas domination of entertainment markets would necessarily make the length of this paper unwieldy, but to summarize, American
films dominate the world for essentially three reasons: first, the huge internal
market allows for lavish spending on production values that make U.S. films
attractive to audiences looking for entertainment and escape; second, U.S. film
companies are the only ones with a capacity for world-wide distribution;68 and
third, the need to appeal to a multicultural domestic market has guided the
evolution of American films toward stories that are broadly appealing and
good candidates for international sales.69
Thus, there are good reasons for countries to wish to promote their cultures by protecting and subsidizing their native film and television industries.
However, as with most policies, some work better than others. Moreover, as
the international environment evolves for reasons owing to both changes in
technology and developments in the world economy, it is worth considering
some alternate ideas.

SMART PRACTICES
Eugene Bardach introduced the notion of smart practices as a more appropriate appellation than best practices.70 He argues that the term best practices is unrealistic in the face of the improbability of exhaustive comparison of
policies and the inability to control for most contextual conditions. Bardach
means his notion to be more than a substitute for an overused term, and rather
offers a methodology of policy analysis. I am using the term less rigorously
here. My intention is to be suggestive, rather than definitive, but I do think
it worthwhile to trawl the worlds culture policies for successful innovations:
In the area of cultural protection, what have been the smart practices? Moreover, are there smart practices in other policy areas that may be worth adopting
in the cultural area?
The most important remark to make at the outset is that in the face of
economic and technological forces that encourage Americanization, protectionism works, at least regarding the preservation of domestic film industries.
France and Korea have vibrant film industries; the Italian industry essentially
disappeared under the bracing winds of competition. Cinecitt, the famous
68

Greenfield and Farhi, series in The Washington Post.

Harvey Feigenbaum, Hollywood: From Flexible Specialization to Globalized Production,
Economia della Cultura (in Italian) 2 (Spring 2005): 221228.
70
Eugene Bardach, Getting Agencies to Work Together: The Practice and Theory of Managerial
Craftmanship (Washington, DC: Brookings, 1998), 3639.
69

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complex established by Benito Mussolini, was reduced for the most part to a
television studio and an offshore production facility serving Hollywood;71 and
the British industry courted disaster until the National Lottery restored funding. It is still difficult to distribute many British-made films, however, due to
foreign control of distribution within the UK.
However, maintaining a domestic film industry is not the same as protecting national culture. Subsidized and protected industries must still offer
products that people wish to see, if they are to compete with American films
and television shows. Films that no one watches hardly contribute at all to the
national culture, let alone protect it.
In this regard, France and Australia represent interesting contrasts. French
law requires French television networks to devote 2 percent of their turnover
to financing French films (Canal Plus, the subscription service, is required to
devote 9 percent of turnover to this purpose) that they must eventually show
on their television networks. Moreover, all films receive an automatic subsidy
from taxes collected on French movie tickets (the latter, in effect, means that
American films subsidize French films, because most films exhibited in France
are American). The effect of this is that there is little discrimination in France
against films that have little chance of pleasing large publics. Moreover, the
filmmakers frequently charge that additional subsidies, which do discriminate
on the basis of perceived quality, tend to go to art-house films, which, once
again, appeal to only small segments of the French public.
Australia, in contrast, combines very small subsidies that are easy to obtain,
so new filmmakers can write scripts, but for a film to qualify for a major subsidy
from Screen Australia, the script must demonstrate a market attachment, and
this is usually demonstrated by having lined up an agreement with a domestic
distributor. This strategy does make it more likely that the film will have some
appeal to a larger segment of the Australian population, but it also makes the
local industry very dependent on the tastes of a tiny number of distributors.
Korea subsidizes film rather differently than either France or Australia.
While it maintains some quotas on the number of foreign films (read American
films) that can be shown in Korean theaters, it maintains a state-subsidized
film production facility that is open to all Koreans.72 Australia has adopted a
similar approach, but with a significant difference. The states of Queensland,
New South Wales, and Victoria have all built film studios and postproduction facilities, either as public facilities (Victoria) or as development writedowns for private investors (Fox in New South Wales, Dino Di Laurentis in
Queensland). While the facilities were created to serve both domestic and
international (read American) clients, the problem that has developed down

Sonia Harford, La Dolce Vita One More Time, The Age, 24 March 2003, accessed at http://
www.theage.com.au/articles/2003/03/23/1048354471922.html, 14 September 2009.
72
Yoon and Feigenbaum, Global Strategies; Choi, When Culture Meets Trade.
71

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under is that the success of the facilities with American filmmakers may
have crowded out local Australian producers. Attracting a significant foreign
clientele not only amortizes the cost of the facility, but provides enough work
to maintain a community of Australian technicians and artists who are then
available for local productions (financed, as it were, by Americans). Some
Australian filmmakers complain that the facilities are too successful and
are constantly occupied by foreigners who pay wages that price Australian
producers out of their own market. This is difficult to document.
At the supranational level, the European Union has devoted about a hundred million euros per year to aid European film and television industries. As
mentioned above, the various MEDIA programs aid several stages of film and
television production, from development to distribution and marketing. While
some analysts have criticized these successive five-year programs for not allocating enough money to script development, in my view, other problems loom
larger.73 For one thing, the European Commission has seen the industry problem as one related to the fragmentation of the internal market, as if member
states were as worried about competition from each others films as they were
worried about American competition.74 Most important of all, though, is the
feeble level of support. One hundred million euros a year may seem like a lot
of money, but in fact, it is only equal to the cost of a single Hollywood movie.
With the average European budget roughly one-tenth that of an American
film, it is hard for Europeans to match Hollywoods production values, professionalism, and marketing power. Sometimes, however, even modest productions occasionally can become Hollywood-style blockbusters: Slumdog
Millionaire received 830,000 euros for distribution from the MEDIA program,
with a total cost of 11 million euros.75 Of course, not everyone hits the lottery.

Borrowing Smart Practices from Other Sectors

One way or another, even when the issue is culture, things come back to money.
While countries can learn from each other by observing what other governments do to preserve national culture and by imitating successful practices
from abroad, there may be examples closer to home that can offer innovative
approaches. If one views the problems of film and television from a purely
economic point of view, the governing characteristics are the high costs of production and the high risk of investment. One of the main reasons American

On the allocation of development funding, see Victor Henning and Andre Alpar, Public Aid
Mechanisms in Feature Film Producton: the EU MEDIA Plus Programme, Media, Culture and
Society 27 (2005): 229225 at 239.
74
Anna Herald, EU Film Policy: Between Art and Commerce (European Diversity and Autonomy Papers-EDAP, 2004), 11, accessed at www.eurac.edu/edap., 8 August 2007.
75
Europa press release, 23 February 2009, accessed at http://europa.eu/rapid/pressReleasesAction.
do?reference5MEMO/09/81 on 18 July 2009.
73

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studios are economically successful is that not only are they large enough and
rich enough to pay for hugely expensive productions, they have deep enough
pockets to absorb the heavy losses in a high-risk business; for every film or television show that makes money, ten do not.
Since the film production companies outside the United States are much
smaller than their American counterparts, the traditional solution to solving
this economic problem is to have the state substitute for the private American
studios. The state, via subsidies and tax shelters, assumes the risks and costs
associated with the film business.
However, there are other mechanisms that can facilitate the reduction of
risk. In an earlier version of this article I considered the way in which risk is
spread in other sectors, especially in home finance. This suggestion has more
than a tinge of irony in the discussion that follows, but I think it is worth
exploring. In the United States, government policy created a secondary market
for home mortgages via a financial intermediary called (now infamously)
Fannie Mae. Fannie Mae, as a purchaser of home mortgages, which it
repackages and resells, was intended to (and did until the recent bubble)
spread the risk of investment over a broader group of investors. While it got
into trouble when the repackaging obscured the risk of the original mortgages,
Fannie Mae was historically an extremely beneficial tool for diversifying and
reducing risk. This agency, later a private corporation, made home ownership
possible for many Americans who otherwise would have been faced with extremely high interest rates to compensate for the risk that they might not be
able to make payments on their homes. The limits of this idea became obvious
at the end of 2008, when the housing bubble burst, but the idea of using secondary markets to spread risk for publicly desired purposes was a good one.
The economic collapse that cascaded with the failure of Lehman Brothers
in September of 2008 dramatically illustrated the problems that came with
the abuse of secondary lending, especially with the securitizing of debt and the
opacity of risk in a high-leverage environment and an economic bubble. The
catastrophe that followed was a clear warning that any mechanisms for secondary finance need to be transparent, and that high degrees of leveraging
are a formula for disaster.
Nevertheless, at some point, when financial markets become more stable,
it will be possible to think again of how the private sector might become involved in financing film and television production outside of the United States.
Since these investments are relatively risky, financial instruments will need to
be priced accordingly, but properly priced, higher risk opportunities can find
buyers. Shifting some of the burden of financing film and television to the private sector in the form of creating secondary markets for entertainment investments has two additional advantages: it creates a kind of market attachment
along Australian lines, in that those projects with greater commercial appeal
should be more easily refinanced, while more artistic films can still benefit
from the lowering of risk.

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There is some evidence that in the United States, at least, the private
sector has already begun to move in this direction. In April of 2010, the Commodity Futures Trading Commission green-lighted two requests to create
futures exchanges for Hollywood box office receipts.76 While the Motion Picture Association worried that short-selling might adversely affect revenues,77
the move could also encourage film investment as a futures exchange that
would allow investors to hedge bets on films, off-setting risks.

CONCLUSION
The problem of Americanization is an important part of the study of the causal
impact of ideas and the political consequences of cultural change. There is, I
think, reason to believe that the consequences of cultural diversity go far
beyond cultural industries, and Americans have as much of a stake as do
the countries being Americanized.
While anecdotal, examples can be instructive. The argument here is that
homogenizing cultures alters the conditions of entrepreneurship and innovation. When we are exposed to foreign cultures, we rethink our own, and often
think differently as a consequence. Thus, cultural contrast can stimulate new
ideas. Consider the case of Starbucks. The name on the door recalls the first
mate of the Pequod in Herman Melvilles classic American novel, Moby Dick.
However, inside, one finds neither pictures of whales nor a seafood menu.
Instead, we are presented with aspects of Italian coffee culture (espresso,
doppio) and that curious amalgam of a milk shake and espresso, trade-marked
as a Frappuccino. A five billion dollar/year business was created when an
American entrepreneur got an idea from Italian culture. Examples abound:
fusion restaurants open everywhere. French youth dance to music inspired
by North Africa, while suburban Parisians reinvent the hip-hop culture to fit
their environs. This is a form of international learning. Especially in film and
television, there are economic advantages derived from overseas cultural
products. The Seven Samurai led to the Magnificent Seven (or Shakespeares
King Lear became Akira Kirasawas Ran). American television borrowed
often from the British (The Office, Steptoe and Son), while the British imported reality TV platforms from the Dutch-Spanish Endemol corporation.
French films have often served as prototypes for Hollywood blockbusters
(True Lies, Three Men and a Baby). In each of these cases, the product in
question is not so much an imitation as a hybrid. Other innovations owe their
Back to the Futures: Hollywood Exchange Approved, The New York Times, 21 April 2010,
accessed at http://dealbook.blogs.nytimes.com/2010/04/21/back-to-the-futures-hollywood-exchangeapproved/?scp51&sq5Hollywood%20futures&st5cse, 22 April 2010.
77
Michael Cieply and Joseph Plambeck, Hollywood Tries to Block Market for Movie Bets, The
New York Times, 7 April 2010 accessed at http://www.nytimes.com/2010/04/08/business/media/08futures.
html?scp52&sq5Hollywood%20futures&st5cse, 22 April 2010.
76

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origins to international comparisons: European delivery systems became the

basis for the U.S. zip code, while American health care reform seems to be a
transplant of essentially Swiss ideas (public mandate, private insurance). The
lesson here is not that Americanization is only one arrow of the cultural
flow, but rather that there is good reason to preserve diversity. Cultural diversity is a rich source of new ideas, and many of these can be lucrative or
otherwise beneficial.
I do not want to insist on the advantages of diversity only for public policy
and commercial gain. Ideas are not simply involved in imitation or policy
learning. They shape politics. As foreigners adopt American ways of thinking,
American styles of politics are not far behind. To the extent that American
categories replace indigenous ones, people lose a sense of their options and
their histories. In this sense, Americanization can be described in terms of
what is lost rather than what is gained. As we have seen, ideas matter, but they
are channeled by markets.
Thus, while the creation of a vibrant private sector in the entertainment
industry is the root cause of putting cultures at risk, as channels proliferate
and audiences diminish, enhancing the appeal of cheap American products;
the private sector can also be part of the solution. Innovations in film and television finance can help. However, it is difficult to imagine a world in which
some state support of the arts is not crucial. Culture, especially high culture,
does not flourish among the Babbitts of commerce. Even popular culture has
its economic limits. The effects of privatization and the general spread of
lowest-common-denominator consumerism are unlikely to be rolled back.
However, smart policies, if not smart practices, can help limit the damages of
a globalized and fragile market. The barbarians are at the gate, but at least a
few can be paid off.