Exporting the American Model: The Postwar Transformation of European Business. - Review - book review

Administrative Science Quarterly, Dec, 2000 by Paula Phillips Carson

Marie-Laure Djelic. New York: Oxford University Press, 1998. 306 pp. $65.00.

Far from being just another book on the post-World-War-II economic conditions in Europe, Exporting the American Model offers an insightful, unbiased, and well-documented behind-the-scenes look at the diffusion of capitalism, coined an "American innovation," in Italy, France, and Germany. In her carefully researched, documented, and footnoted text, much of it summarized from primary sources, her comparative historical journey begins in the late-1800s and terminates in the 1970s, although the focus of the book is on the 1939-1950 period.

By way of introduction, Djelic delineates the degree to which capitalism has penetrated the economic platforms of the three countries. Her subsequent purpose is to elaborate on the reasons why adoption and adaptation in the postwar period have resulted in greater or less penetration, using Italy as a case in which capitalism has faltered, France as a case in which capitalism has largely been successfully diffused, and Germany as a case of diffusion, despite its having been defeated in part by the so-called inventor and pioneer of capitalism. In elaborating on the evolution of capitalism in these countries, the author documents changes in firms' physical structures (i.e., size), ownership structures (i.e., corporate versus sole proprietorship), organizational structures (i.e., multidivisionalism), and governance structure (i.e., cartelization).

As a theoretical base, Djelic depends on evolutionary and national specificity theories, but the real value of her contribution is not in testing these theories (or in her intended middle-range theory building), but in the rich storytelling that makes readers feel as though they are actors in the significant world-altering events she describes. The story begins with a description and plausible explanations of the economies of Italy, Germany, and France in the years prior to World War II. The French economy is depicted as craft-oriented, with most firms more correctly classified as workshops involved in organized markets. Fear of bankruptcy and the associated social stigma, combined with the desire of the French for financial independence and wealth accumulation, explained not only their lack of enthusiasm for risky decision making but also the low birth rates in France during the prewar period. Djelic addresses the divergence between the dynamism of Germany's heavy industry and the more sluggish performance o f its consumer-goods sector, as well as the formation of GmbH and the close industrial ties between Germany and the United States in the 1920s. Finally, she characterizes Italy as a late modernizer, with prewar industrial expansion financed mostly through foreign investment and the Italian state, resulting in a preference for small firms, while noting the geographic imbalance between the prosperous northern and the Mafia-corrupted southern regions of Italy.

Having laid the foundation for imminent changes in the economic conditions of these three countries, Djelic then proposes a model of antecedents (e.g., traumatic disruption and superior foreign model available) necessary for cross-national structural transfer. In doing so, she progresses to the mid-1940s and describes at length the European Recovery Program of 1948, better known as the Marshall Plan. Djelic discusses its origins, stated versus actual intent, mechanisms of diffusion, sources of resistance, and successes in providing economic assistance to sixteen European countries. In an exciting chronicle of geopolitical, social, economic, and interpersonal events, the reader learns of France's initial ambivalence and tendencies toward communism and how, in the end, political powers (which the reader comes to know very well) became convinced that the economic future of the country would dictate its position on world leadership. This explains how the American assembly line came to be preferred to the communis t party line.

In Germany's case, the reader is reminded how political governance battles, both between and within nations (for example, over the Morgenthau Plan), determined that it was in the best interest of all not to destroy but to enhance industrial capacity and encourage economic rehabilitation and recovery in Germany, even if this required a paradigm shift to allow Nazi-sympathetic industrial leaders to remain in place. Italy is characterized as dependent but also indifferent, unabashed in its opposition to capitalism or other democratic ideals. This indifference was perhaps the primary reason that Italy lacked a national elite network charged with and enthusiastic about its economic recovery. In contrast, France independently established a strong and cooperative planning board to work with Marshall Plan administrators and mechanisms to train and socialize French "mandarins." Thus, Djelic describes economic recovery in France as being based on voluntary imitation of the American model of capitalism. In Germany, the diffusion of capitalism is attributed first to coercion (given American insistence on breaking up German cartels), followed by voluntary imitation in the early 1950s, which resulted in the adoption of democratic ideals and the rejection of Nazism. And, in Italy, it appears that normative, coercive, and mimetic influences all failed, as the lack of a coherent national plan, resistance to change, and priority for Marshall funds being spent on infrastructure rather than production resulted in the failure of the American strategy of co-optation.