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What Has Economics Got to Do With It? Cultures of Consumption in Global Markets

What Has Economics Got to Do With It? Cultures of Consumption in Global Markets

Within the aegis of cultures going global, this paper explores two interrelated questions. How does economics matter to the global spread of culture? How does the culture of a particular commodity shape the economics of it? This paper probes the channels for the global spread of material culture and argues that the underlying forces are as much economic as they are cultural. It is about the role that economists have in cultural studies, considering that economic frameworks can either bar or facilitate the movement of consumption cultures.

SPECIAL ARTICLE

What Has Economics Got to Do With It? Cultures of Consumption in Global Markets

Rohini Sahni, V Kalyan Shankar

Within the aegis of cultures going global, this paper explores two interrelated questions. How does economics matter to the global spread of culture? How does the culture of a particular commodity shape the economics of it? This paper probes the channels for the global spread of material culture and argues that the underlying forces are as much economic as they are cultural. It is about the role that economists have in cultural studies, considering that economic frameworks can either bar or facilitate the movement of consumption cultures.

An earlier version of this paper was presented at the “National Seminar on Structural Transformations and Developmental Politics in Post Liberalisation India” jointly organised by IIC and CSD, New Delhi, during 24-25 January 2008. The paper has benefited from the comments of the participants. We are grateful to CSD, for funding this research and would also like to acknowledge Prashant Trivedi, CSD, for his suggestions.

Rohini Sahni (rohinisahni2000@yahoo.com) is with the Department of Economics, University of Pune and V Kalyan Shankar (vkalyanshankar@yahoo.co.in) is a doctoral student at the same department.

“If I belonged to a bigger town, I would have definitely got

more SMS votes”, remarked a contestant voted out in the

finals of Indian Idol, a popular entertainment contest on television (Amit Sana). Beyond the phenomenon of “a small town guy being undone in the big world”, what larger cultural significance does this statement hold? It has a multilayered fineprint that deserves further attention. As a preliminary speculation, from where are more votes going to come? In the hierarchies of urbanity, how would one’s position make a difference?

In the public voting format, merely viewing the programme is not sufficient anymore. There is an active soliciting of votes, which has to be translated into tangible short message services (SMS). How would this happen? More SMS would be a function of more mobiles. What if the penetration of mobiles is not prolific enough? Even if one does own a handset and intends to send an SMS, you still need the network range. Plausibly, these hurdles could get more pronounced moving down the geographic hierarchies, creating systemic limitations for an individual to succeed.

1 Introduction

Framing this issue at a broader level, there is an increasing demand for an active viewer rather than a passive one; Indian Idol is only an illustrative example for this. As an integral component of “popular culture” (Strinati 1995), the programme is widely consumed and has reached a high level of penetration in terms of viewership. The next rung of coordinated consumption seeks the transition into an active viewer, and this would not be possible without the means to exercise it. The programme in a way seeks to assimilate two waves of “material culture” (Miller 1987); the first of the television that originated earlier and the second of the mobile phones. There could be a certain disparity in the spread of the second when juxtaposed with the first. Further, the culture of consuming the programme through “sending SMS” may not exhibit the same number of takers as those who consume the programme only as spectators.

The way we engage with popular culture is increasingly getting defined through the conduits of material culture. This change has an international dimension to it, wherein both the forms of culture are drawing their influences from global trends. For a programme titled Indian Idol, what is so Indian about it? The participants are Indian, the songs they sing could be termed Indian by and large (though it cannot be vouched that they may not have been plagiarised from elsewhere); the indigenousness ends there. Otherwise, the show has a “made in America” tag in the fineprint (being a conceptual rip-off from Fox TV’s American Idol), the channel Sony Television that has garnered the eyeballs is a Japanese multinational broadcaster; the televisions for viewing could be LG and Samsung in all probability (considering that the Korean multinationals have a large share of the Indian market (Chandra Mohan 2005)) and the mobile handsets could be Nokia or Sony again. Thus, we are affronted with a situation wherein the cultural basket of what we consume knowingly or unknowingly has an international connection at multiple levels, both in popular as well as material forms. Within the aegis of cultures going global, this paper explores two interrelated questions. How does economics matter to the global spread of culture? How does the culture of a particular commodity shape the economics of it?

When we say that consumption cultures go global, more often the ambit of studies revolves around what happens on account of it rather than how it happens. It is a study of the ends rather than the means. But how do cultures travel after all, particularly when they have acquired material forms? This paper probes through the channels for the global spread of material culture, and argues how the underlying forces are as much economic as they are cultural. It is about the role that economists have in cultural studies, considering that economic frameworks can either bar or facilitate the movement of consumption cultures. This paper derives its examples from the Indian context but they could be equally applicable across other parts of the developing world.

2 Economics and the Global Spread of Culture

When we talk of cultures going global, what do we essentially mean? The underlying reference is to “mobility” of cultures. Locally confined to begin with, it indicates that cultures are now transcending into newer geographies and among unfamiliar people. In a default manner, cultures then get ascribed with characteristics associated with mobility per se. How much of cultures move and how fast, or in other words, the pace and quantum of cultural movements would define their spread across space and time.

Cultures Going Global

When cultures go global, what does this abstract term “cultures” signify? What is going global after all and imparting mobility to cultures? The answers to this could be traced to one of the ways in which culture has been defined. In a broader sense, cultures are “sets of beliefs or values that give meanings to ways of life and produce (are reproduced through) material and symbolic forms” (Crang 1998: 2). Looking at culture as a sum of parts of “ways of life” and “material and symbolic forms”, it is these integral “parts” that are gaining mobility.

Do these “parts” exhibit evenness in the pace of their movements? This is where the enquiry would naturally lead. Of these, ways of life as vectors of culture has a history to it. When Appadurai (2000: 27-28) writes how “between travellers and merchants, pilgrims and conquerors, the world has seen much long distance (and long term) cultural traffic”, the attempt is at identifying the role of individuals as agents of cross-cultural exchanges and familiarisation. When people would move, not only would their ways of life get transported but also the material and symbolic forms building them. While these historic movements may not be the fastest or the most voluminous, they formed the initial waves of cultural influences spilling into unfamiliar territories.

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Importantly, the pace of mobility associated with ways of life and material forms was consistent so long as individuals were at the helm. Resulting from their interdependence, neither could ways of life move over and get entrenched without the ancillary existence of the material forms needed to support them nor could material forms outpace and arrive into new territories independent of the ways of life requiring them. Cultures could travel only as further as individuals would carry them. This no longer remains the case.

Cross-cultural Travels

In cross cultural travels, a substantial disjuncture can be witnessed at two levels. Firstly, individuals still act as agents of culture, and there continue to be more of them travelling across the world. But as active perpetrators, their importance has waned since individual movements are no longer a prerequisite for cultural movements. We argue that they have been superseded by ways of life and material forms acquiring a mobility of their own. These latter agents have been accosted with a certain fluidity of moving spatially at a faster pace and in larger numbers, a typical limitation in physical, individual movements. Probing further, a deepening split can be observed between ways of life and material/ symbolic forms as well. From moving simultaneously, there is now a disjuncture in the pace of their travel.

Earlier, there was a simultaneous flow of individuals carrying their lifestyles and merchandise and entrenching them elsewhere. Increasingly, this has been replaced by a haphazard sequence of cross-cultural travels, in terms of what moves first and what follows. Taking the case of Chinese and Indian diasporas and their little cultural hamlets, one can discern the “package deal” that would get transported as a collective. “China towns” are miniature representations of what Chinese ethnic immigrants have on offer. Over time, a certain disjuncture can be observed in these collective transfers.

A Chinese or Indian meal is not confined to their respective hamlets anymore. They were exclusive reserves of these collectives once but now have an independent existence of their own. They have travelled wider and faster, ceasing to be esoteric offerings of a Chinese or Indian corner. Going further, the ingredients could be spread even wider, across general supermarkets and retail outlets, not in conjunction with where the cuisine is on offer.

Thus, from the earlier definition of culture as the one giving meaning to ways of life and creating material forms, the order appears reversed when cultures go global. It is the material forms that arrive first with their new-found acceleration. As they get entrenched as independent variables, they are pliable to new meanings that may not be what they signified earlier. This is simply because the original symbolism has not moved fast enough. The material forms go on to give meanings to ways of life (same as original or otherwise), in the process giving a new dimension to cultures. From “culture→ ways of life→ material/symbolic forms” as a set of cultural perpetuation, we now have “material/symbolic forms→ ways of life→ culture”. The role of economics lies in its connection with the production of these material and symbolic forms; the enhanced role of the material forms has also enhanced the role of economic processes in cultural transfers.

As we discuss the economic drivers behind material forms of culture and their accelerated global movements, as economists, the enquiry becomes simpler by replacing material and symbolic forms with the more familiar terms of “goods and services”. Discussing the diffusion of goods and services through “trade and capital movements” (things economists are obsessed with), an economic perspective to cultural movements can be put forth. Treading the often unexplored, common grounds between cultural studies and economics, the further text looks at how economists can add value to the discourse on cultural spread. This would be possible if only they were to understand the cultural values that goods and services embody in themselves.

No Culture Please, We Are Economists

The indifference of economics to the cultural ramifications of its actions is not uncommon. The vast body of economic literature engaged in explaining the finer details of “cross border movements” (read trade and investments) hardly considers associated “cross cultural movements”. Nothing can exemplify this better than the literature on trade movements, both in terms of theory as well as methodology of trade analysis.

Discussions on international trade theory, about what drives trade and between which countries, begin with the classical expositions of Adam Smith and David Ricardo. For establishing the absolute advantages arising from trade, Smith constructs his argument using variables X and Y, which could simply be any of the commodities that a nation may produce. The Ricardian refinement to this, viz, the theory of comparative advantage further entrenches the gains from trade. Where Ricardo goes a step further than Smith, he also gives an identity to Smith’s generic, nameless goods X and Y by replacing them with wine and cloth.

For Smith, trade arose from price differentiations, no matter what the goods were. By virtue of being nameless, the goods are in fact, “acultural”. Their social and cultural meanings do not have any bearing on the way trade evolves (at least the theory has been constructed that way). Arising from this, there is a strong underesti mation of what those goods may actually signify. Ricardo, on the other hand, does specify the items and gives them identities. But for this improvement, his theory still does not recognise that wine and cloth are not simply items of trade but are culturally loaded signifiers of consumption. What if the wine is champagne and the cloth is Levi’s jeans? Would not they alter the way in which goods move, and from where? Having been introduced in a particular country, would not they influence the cultural patterns of consumption?

The other problem with trade theories is the implicit assumption that the trading nations are “culturally uniform”, and the same products could be freely extended across international markets. Taking Ricardo’s example, even before England and Portugal start trading, they are producing and consuming the same items (wine and cloth). After trade, these countries increase their consumption of both the goods but this in no way alters their consumption baskets. The classical and even the modern trade

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theorists have not seriously considered the cultural outcome of introducing a totally new, non-indigenous product as part of trade. If what we consume is closely connected to our culture, how does the introduction of an altogether new product impact us?

Without undermining the importance of trade theory, there is a need to look at the continued lack of coherence between economists, trade theorists and the cultural significance of goods. It has been little recognised that the traded items signify more than their monetary worth, and culturally their value could be higher/ lower. Economics, with its overwhelming obsession with empirics, continues to construct its edifice with an air of indifference to the cultural dynamics ingrained in trade. Looking beyond the theory, even the actual methodology of trade data compilation bears the same imprint. Commodity trade classification systems would be a good example for illustration here.

Brands and Cultures

The Harmonic System (HS) is the universally accepted classification for traded goods with the objective of maintaining uniformity in the definitions of goods. Within this, Code 22 has been assigned to beverages, spirit and vinegar (UN COMTRADE 2008). The code is a broad-based nomenclature that includes a host of subsections including unsweetened beverage waters (Code 2201), non-alcoholic sweetened and flavoured beverages (2202), beer made from malt (2203), grape wines (2204), fermented beverages not elsewhere specified including cider, perry, etc (2205), liqueur, spirits and un-denatured ethyl alcohol <80% (2208) among other items.

These numeric designations could technically pass for rather innocuous trading items, until we start the naming procedures. What are the possible brand names these sub-codes conceal? Unsweetened beverage waters could simply be Kinley and Aquafina. Non-alcoholic sweetened and flavoured beverages could be Coke and Pepsi. Beer is synonymous with Heineken, Budweiser, Fosters; just as ethyl alcohol is the lesser-known identity for Bacardi, Johnny Walker and Smirnoff. Without sounding like a paper on alcoholic spirits, this listing of names is simply to bring into focus how brands move trade. If you thought what is in a name, then it would be eroding all the strength that moves these brands.

Associated with the brands are also their countries of origin. “While Coca-Cola is promoted as a universal or trans-cultural product, it is at the same time identified with the culture and ideals of the United States. Coke is intimately bound up with the so-called American Dream” (Howes 1996). The same can be said of blue jeans (Levi’s), or burgers (McDonalds) or pizzas (Pizza Hut). From these brand names, the direction of cultural perpetuation also becomes quite apparent in terms of where the goods originate and where they land up. Emerging in the first world, these products have penetrated extensively into the developing markets over the years.

The third world has changed dramatically since the concept of a “developing world” gained popularity after second world war. This is clear from the type of products people consume. Cigarettes and massproduced textiles have been a worldwide phenomenon for a long time; carbonated soft drinks, though more recent, are today nearly as widespread; cassette players and radios can be found in many villages in countries as diverse as Brazil, India and Nigeria; and the TV and VCR have become necessary status symbols of many peoples of the urban third world (Dannhaeuser 1989).

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The term “westernisation” refers to this very process of goods from the west proliferating in non-western markets creating a standardised basket of consumption across geographies. In exchange, the developing world has its own set of items (like Indian films or Thai cuisine) that have gained popularity beyond their domestic markets. But it does not amount to “easternisation” of the west. They remain niche chunks and do not get conferred with the status of mass consumed items; their quantum of movements being minuscule. The bulk of items that even the east exports are those originating in the west. The south-east Asians for example, are integrated into global production chains of a number of consumer items (Hoekman and Kostecki 2001: 14-15). Thus, the homogenising influences are so pervasive that the same goods (often originating in the west) are being produced, traded and consumed across a larger global set of nations.

While consumption has evolved a culture of its own over time building lifestyles centred on material objects, it has also simultaneously created a trade of its own. Trade then becomes not just an “engine of growth” but also a very discrete, subliminal perpetuator of consumer cultures. The trade-culture correlation is a historical one, but the scale and conspicuousness observed today warrant a new perspective.

Post-second world war, world exports have risen from $50 billion in 1948 to scale $12,065 billion in 2007 (UNCTAD 2008: 3). What are the implications of these enormous cross-border movements from a cultural point of view? Obviously there are far more culturally loaded goods being traded than at any earlier point of time in history, but the story does not end at that. There is a distinct condensation of the time gap between consequent waves of cross-cultural goods arriving in the markets. A larger number of people across widespread geographies are getting familiarised and influenced by a common set of beliefs or values that those goods impersonate. Trade, in a way, is a channel for the vast industry creating material objects to extend their markets. The resulting growth in global markets is prodigious, and the omnipresence of material goods would bear evidence to this global standardisation of consumption patterns.

Now what if these goods that may carry cultures get prevented from entry into particular markets, and get barred at national boundaries? Goods and services have greater mobility as cultural carriers, but they would not be necessarily given the freedom to exercise it. So their potency of transmitting cultures, via the pace and volumes of their movements, gets blunted by preventing their entry. Countries have periodically resorted to putting up external barriers against goods and services. A host of economic forces act as impediments; custom duties and other trade regulations that insulate the country from external goods and in the process, prevent their cultural connotations from seeping through. Cultural standardisation or homogenisation is possible only where there are lower economic barriers to facilitate better market access.

Classification of Cultural Goods

A 2005 United Nations Educational Scientific and Cultural Organisation (UNESCO) report identifies a framework for global cultural trade by categorising goods into “core cultural goods” and “related cultural goods” (UNESCO 2005). The breadth of core cultural goods covers heritage items, books, newspapers, recorded media, audiovisual media; and related cultural goods include equipment and support material, advertising and architectural services. But is the transmission of cultures restricted only to these cultural goods alone? Where do strong representations of consumption cultures like Coke or McDonalds fit into this scheme of things? The real scope of cultural goods has grown beyond the definitions.

We need a more expansive classification of cultural goods in terms of (a) goods having direct cultural implications, and (b) goods that act as potential transmitters. Items like Coke and blue jeans are direct carriers. Media related equipment like TV, radio, mobiles and computers would form examples of transmitters. By themselves, they are part of the larger framework of material culture; but the services being offered via them are the ones that complete the job. For example, in India, possessing a television or radio would not have amounted to much external cultural influences creeping in if they were to be providing access only to Doordarshan or Vividh Bharati, the official government channels. The real cultural explosion (entry of MTV, Star, Sony, etc) resulted only after liberalisation with the permission to foreign channels to operate in India.

The transmitters are the “physical infrastructure under private ownership” that could be used for facilitating the spread of cultural material. They create public awareness of ways of life that people are hitherto unaware and expand the scope for mass standardisation. For giving those ways of life a material form, the required goods and services might not have still arrived but they make their presence felt already via these transmitters. The pace and quantum of cultural spread via media services is even greater than commodities, in fact it is instant.

Trade volumes have risen exponentially in the post-war time frame, but have been surpassed by another channel of movements, that of international capital flows.

Foreign Direct Investments (FDI) broadly defined as the creation of enterprises abroad or the acquisition of substantial stakes in existing enterprises now represents a major form of cross-border capital flows. More firms than ever in more industries and in more countries are expanding abroad through direct investment. It has been estimated today that worldwide some 65,000 trans-national corporations, 90% of which are headquartered in OECD countries, have established more than 8,50,000 foreign affiliates, more than half of which operate in non-OECD countries. Their combined sales of almost $19 trillion is more than twice as high as total world exports in 2001 (Ferrarini 2003).

A large number of international goods and services no longer register in international trade. The goods themselves do not move, but the money required for their production flows swiftly to establish local production. With investments in place, inter national goods then qualify as any other local item. The cultural connotations of these goods remain intact though, irrespective of their place of production. As traded items, they would face barriers. On acquiring local status of production, these barriers get circumvented. Just like trade barriers, there exist hurdles for investments as well. As a country liberalises, these barriers get dismantled progressively leaving the doors open for external cultures to strike root.

The multifarious cross border movements of goods, capital, individuals and ideas, they all have an intrinsic cultural baggage

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travelling across. Which of these movements gets regulated at national boundaries and to what extent? Depending upon this, levels of cultural exposure would vary and international influences on domestic consumption patterns would keep altering. These, in turn, would have their own bearing on the extent of cultural standardisation they can bring about.

As seen in this section, there are deep-rooted economic processes that give direction to cultural journeys. The term cultural movement is a sweeping generalisation of the multiple channels through which the movements occur. Cultural movements via trade, via investments and as seen later, via seepages (see section 3.4) are all direct repercussions of background economic forces, and economists are the ones more equipped to throw light on them. Putting it succinctly, economists do have a stake in cultural studies after all.

3 Culture of Products Shaping Its Economics

What product is prone to enter through which channel? What will travel as exports, what will transcend across national barriers, via, FDI, and what will go international, via value-chains (as seen later)? We argue that this decision is intrinsic to the product and the “nature of consumption” it seeks. When items of trade get substituted by generic variables like X, Y and Z, or even by wine and cloth, they offer a relative ease for constructing trade models. But they do not give an indication of the channels through which those items could enter different markets depending upon their cultural dynamics. The discretion exercised by the product to choose its modes of entry gets sidelined.

Entry of a product into an international market would be determined by how many channels exist at a particular point of time and which of those get regulated at national boundaries. In closed markets, the channels for entry would be totally restricted. As economies get deregulated, international products can enter local markets but the mode of entry would depend upon what channel gets liberalised first. As economies become more open, a product or service may have several modes of entry that can be availed. It still does not imply that the product would resort to using all the channels at its disposal, for it would exhibit its own preferences to maximise its consumption.

The very idea of “international” goods or services has got blurred over time. For a product to qualify as international, the litmus is no longer limited to the physical good and its entry from elsewhere. It

Table 1: The Location-Based Grid for Production and Consumption

Consumption

Local International

Local Local production and local Local production and consumption (mode 1) international consumption (mode 2)

Production

International International production International production and local consumption and international (mode 3) consumption (mode 4)

now owns multiple passport identities depending on (a) where it gets produced and consumed, and (b) who owns the production, whether this ownership is domestic or international. Thus, we have two binaries to contend with; the first dealing with geographic movements, and the second dealing with capital movements. Different products employ different combinations to cross borders and become international. As stated earlier, this is influenced by

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the nature of consumption they seek. The grid (Table 1) constructs the four possibilities for producing and accessing a product.

Except for local production and local consumption, all the other combinations in the grid emerge with an international connection to them. They also form the routes for cultural initiations internationally. If searched a bit deeper, even the sole alternative of local production and consumption (mode 1) is not so local after all, but about that later in section 3.4.

3.1 Local Production and International Consumption

The rationale for this mode could simply be explained by international trade in the Hecksher-Ohlin world. When production is confined locally and foreign markets have to be tapped, it takes the trade route. If we take the case of Ricardo’s wine, it would be interesting to look at its trade volumes and the trading nations. The bulk of exports are accounted by a selective club of nations including France, Italy and some others from Western Europe (COMTRADE 2008). The geographic confinement of these items’ production has ensured that they would necessarily have to be procured via trade. The producing nations have been vehement in safeguarding their exclusivity of production.

Geographical indicators as a form of intellectual property rights are precisely for this purpose. For example, champagne cannot be equated with any other sparkling wine. The “French law has created the ‘Maisons de Champagne’ to determine exactly the methods and conditions of Champagne production in France and has empowered them to sue in protection and on behalf of the name ‘Champagne’” (Knoll 1970: 310). This legislation now has an international validation, with additional protection for geographic indications for wines and spirits under the aegis of intellectual property rights at World Trade Organisation (WTO 2008). The term champagne is no longer associated just with French culture but is linked with the larger domain of the culture of consumption. Thus, nations have resorted to a safeguarding mechanism to protect what would seem as cultural connections of items; but the motive is just as well to prevent their economic spillovers being accrued to other nations.

In the case of champagne, annual “sales by all producers total more than 300 million yearly bottles, roughly £4.3 billion. Roughly two-thirds of these sales are made by the large champagne houses with their grandes marques (major brands). Fiftyeight per cent of total production is sold in France, and the remaining 42% exported worldwide” (wikipedia). Even as champagne remains imbued in French culture, France as a nation remains the sole authorised beneficiary of this cultural symbol.

Within the spheres of consumption and material culture, a similar status could be denoted to the French or Italian couture or luxury goods industry. “The worldwide luxury goods market now represents a total of 35 billion dollars. On that market, the French companies have contributed a little less than 50% of total turnover in the mid-1990s” (Djelic and Ainamo 1999: 625).

Niche luxury brands that are symbols of “high culture” or “elite consumption” show a high degree of reluctance in extending their production through capital movements internationally. They are at the roots of differentiating between elite and mass consumption. These are not supposed to be mass consumer goods, and as such, have pricing barriers to their access. It is a natural choice, considering that their brand equity revolves around regulating the consumption of the product. Under these circumstances, their production would tend to be concentrated in the parent country, from where they would be exported.

While it is easy to state that “exclusive” products are conspicuous examples that choose the trade route, the categorisation of an item as exclusive is a difficult proposition. What may have been exclusive once may not remain exclusive over time. Ample examples could be stated here; in fact most of the consumer durables that have been stated as cultural transmitters were once niche items. Naturally, they found a mention in the trading lists of nations. Progressively, they have become mass consumption items. At this juncture, they move beyond trade channels and into the domain of capital movements. Thus, the grid constructed above is not two dimensional but has a third dimension of time in which the production and consumption take place.

3.2 International Production and Local Consumption

International production and local consumption could be interpreted as normal trade again, this time via import channels. But the objective here is to bring out the vast global expansion of production facilities enabled by the global movement of capital (or FDI). In such cases, the validity of the term international production is based on the fact that the money and technical knowhow is international, even though the production is local.

Existing economic literature enumerates the motives behind FDI movements from the perspective of why it takes place and when. In answer to the why, the reasons include circumvention of trade barriers or “tariff jumping” (Blonigen and Feenstra 1996; Blonigen et al 2002); reducing transport costs (Horstmann and Markusen 1987); relocation of production that is either resource seeking (skilled labour, raw materials) or efficiency seeking (low labour costs) (UNCTAD 2007). In answer to when FDI would move in, the focus has been on understanding the early or delayed effects of entry (Ellis and Fausten 2002).

But this still does not answer the question of what drives capital movements in some products as against others? The reasons could be as much cultural as economic. We argue that depending upon their specific culture of consumption; products may or may not go the FDI way. If we take the case of exclusive wines discussed earlier, they would continue to remain in the trade channels irrespective of trade barriers and low production costs elsewhere. It is intrinsic to the elite culture of consumption they seek. In contrast, there are goods that seek a mass base and their production and consumption are built on stupendous volumes. The channel of trade becomes an “incompetent carrier” for such items because of (a) the large volumes that have to be handled, and (b) the added costs of transport would bring down the affordability, thereby reducing the mass appeal of the product.

In terms of production, they would not remain geographically restricted (like in wines). Their ownership though remains dominated by multinationals from few countries. These products thrive not through centralised production in selective countries and their eventual exports, but through a more decentralised network of production. To achieve this goal, they diversify their production and distribution facilities as seen from the extensive global operations for some of the major culturally symbolic brands.

56

The category of sweetened beverages would form a good example to be cited here. I would like the world to buy a Coke, goes the title of the biography of a Coca-Cola chief executive officer (Greising 1998). Affirming this, the Coca-Cola Table 2: Coca-Cola Sales

Year Coca-Cola Bottles Sold

2007 annual report boasts of being

1886 Nine glasses per day

“the largest manufacturer, distri

1903 Over 300 million

butor and marketer of non-alcoholic

1915 Over 5 billion

beverage concentrates and syrups

1936 Over 100 billion in the world”, that are now “sold in 1973 Over 1 trillion more than 200 countries” (The 1993 Over 4 trillion

2003 Over 6 trillion

Coca-Cola Company, 2007). Table 2

Source: http://www.rzuser.uni-heidelberg. shows the stupendous rise in Coke de/~el6/presentations/pres_c2_hoa/

CCSalesfigures.htm

servings over the century.

If the entry of international goods and services forms the quasifront for spread of cultures, capital movements are driving their pace and quantum. Through their orientation towards generating a mass consumer base, they are instrumental in defining or projecting what eventually become mass cultures. In a rather suggestively titled chapter named “Exporting Americana”, John Love writes of how McDonalds, a quintessential American food service chain now derives a substantial chunk of revenues from outside the United States.

What is more surprising than the scope of its success abroad is that McDonalds cracked the international market with more or less the same formula it had perfected in the United States. Given the enormous lifestyle differences between domestic and foreign markets, a unique approach to international expansion might have been expected. McDonalds might have greatly modified its system to adapt to foreign cultures. Instead, it stuck to the basics of its system and changed the cultures to fit it (Love 1995: 416) – italics ours.

This cultural molding is not just through millions of servings of a Coke or Big Mac that are standardising what we drink and eat. These are flagrant examples that only form the upper crust of a phenomenon that runs deep. There are blue jeans forming a part of what we dress. There are cosmetics that decide on how we should look and for what occasion. Across these categories, there are multinationals trying to sell their products en masse, penetrated across nations through the FDI route. Looking through the FDI figures for India, we can segregate them into two broad categories of items (Table 3) (a) direct cultural signifiers that would include a host of consumer durables and fast moving consumer goods, and (b) support structures required for servicing these direct signifiers. Table 3: Industry Classification for Cultural Transfers through FDI in India

Industries Examples

Direct signifiers Food and beverages Coca-Cola, Pepsico, Kellogg

Clothing L’evis, Benetton, L’acoste

Personal care Revlon, L’oreal

Consumer durables LG, Samsung, Nokia

Computers Compaq, Microsoft

Automobiles Hyundai, Daimler-Chrysler, Ford

Support structures Banking and finance HSBC, Citicorp, ABN Amro

Telecommunication services Vodafone

Source: The table has been constructed by the authors based on FDI information in Rao, Murthy and Ranganathan (1999).

For people to indulge in this plethora of goods, they have to be familiarised with what they have to consume for what occasion, and how. They have to be convinced of how an occasion is incomplete without having consumed a certain set of items manufactured for the purpose. This platform gets created through the media instruments. The 2001 Census of India reports of over 60 million

january 3, 2009

households having television sets and over 67 million in possession of radios (Census of India 2001).

Taking the case of televisions, a large part of this growth can be traced to the post-liberalisation period when a host of multinational corporations (MNCs) entered the Indian markets and consolidated the base of their production. The televisions become instruments for broadcasting a host of MNC channels that too entered simultaneously. The range of foreign influences on the Indian television spans from (a) direct transmissions of international sitcoms (e g, Friends, The Bold and the Beautiful) to (b) localised versions of international shows (e g, Kaun Banega Crorepati that derives its name and content from Who Wants to be a Millionaire, reality shows). In the absence of a widespread network of television sets, the viewership for these programmes would have been limited. In just the same way, the selection of winners through SMS votes (as in case of Indian Idol) would have evoked a tepid response without the massive network of mobiles at work. The success of international capital would hinge on the achievement of this dynamism.

3.3 International Production and International Consumption

This final alternative combines trade, FDI and international labour markets through the form of international splitting of supply chains, also referred as “value-addition chains”.

The Barbie Doll’s label says “made in China”. This suggests, correctly, that in the production of Barbie, China provides the factory space, labour and electricity, as well as cotton cloth for the dress. It conceals however, the facts that: Japan provides the nylon hair, Saudi Arabia provides oil, Taiwan refines oil into ethylene for plastic pellets for the body, and Japan, the United States and Europe supply almost all the machinery and tools, most of the molds (the most expensive item) come from the United States, Japan, or Hong Kong; the United States supplies the cardboard packaging, paint pigments and molds; and Hong Kong supplies the banking and insurance and carries out the delivery of the raw materials to factories in Guangdong Province in South China, together with the collection of the finished products and shipping” (Snyder 2002:4).

If “the Barbie doll is quintessentially American in origin, style and culture” (ibid) as Snyder writes further, then (a) a product symbolic of material culture has many seemingly non-cultural processes backing it, and (b) these processes are geographically dispersed, resulting in a large number of nations backing this cultural end-product.

“The rising integration of world markets has brought with it a disintegration of the production process, in which manufacturing or services activities done abroad are combined with those performed at home” (Feenstra 1998: 31), giving rise to the phenomenon of value addition chains. As the mass base of consumer products increases, and becomes more global in spread, the need for tapping nation-specific comparative advantages becomes necessary. Production gets fragmented wherein

materials and components produced in one country may pass through a sequence of other countries that each add value through fabrication, assembly, or other processing before a final product is delivered to consumers. Countries, which specialise in different stages of the production process according to factor-cost or other locational advantages, are thus linked in a vertical chain through trade in intermediate inputs (Borga and Ziele 2004).

There is extensive literature explaining the emergence and rationale of international production networks (Gereffi et al 1994: 1;

Economic & Political Weekly

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Feenstra 1998; USITC 1999). Further, it has been substantiated how there is active multinational firms’ involvement in these chains; of how affiliates of American MNCs (read firms established via FDI) import a substantial chunk of their inputs from parent firms (Borga and Ziele 2004). Such chains are not just restricted to Barbie dolls or Pokemon games but are highly penetrated in case of electronic and transportation equipment.

The cost reductions resulting from global sourcing and economies of scale are enabling a further expansion of the material culture represented by the products coming out of these networks. Barriers to trade or capital movements would nip this possibility.

3.4 Local Production and Local Consumption

Coming a full circle, what does “local production and local consumption” imply? For what evokes an impression of being indigenous, what are the products qualifying under this category? Can they be termed local or do they also have an international connection after all?

Hazelhurst (1968: 540) offers the following description of the markets in middle rung cities of India, at a time when Indian markets were relatively insulated:

Behind the hawkers are the shops of resident businessmen. Here one finds, for example, bicycle sales shops and bicycle mechanics, small-scale metal workers who manufacture trunks and agricultural implements, the shops of medical practitioners and dispensers of medicine, cloth shops and brass shops, tailors and dry cleaners, radio repair shops and shops labelled simply ‘general merchandise’, gold merchants and grain merchants.

A host of these items have been traditionally part of local markets (gold, grain, cloth) and have their own symbolisms in local culture. What of bicycle and radio (or their repair) shops that have also found a place in the local markets? The markets were already a composite blend of items that are (a) locally produced and consumed, and (b) locally produced and consumed but introduced from elsewhere. Over time, such a mélange has only expanded in scale.

A host of items of industrial production, that also qualify as items of material culture began their journey through tapping the markets where they were first introduced. Strictly speaking, local production and local consumption would hold valid only in those markets where products originated. The automobile is a Daimler invention (read German), and the assembly line a Ford (read American) contribution. Just like this, we can ascribe nationalities to a host of inventions like the radio and television, computers and mobiles that are the beacons of material culture. Mode I would originally comprise such items.

Gradually, the firms mass producing these items began their journey across the different alternatives of the grid to tap new markets. Starting with local production and local consumption; then came a phase of their exports to other markets, followed by the alternative of producing them locally in those markets through FDI, and finally cutting costs by resorting to value chains.

Across the vast gamut of products symbolising material culture, local production and local consumption holds different meanings for different markets. In the originating markets, the term has an added meaning because it is emerging from a local idea or invention. All other markets would have to acquire the product either through trade or capital investments. But an alternative phenomenon can be observed here. Moving across the grid creates a time lag resulting from a phase-by-phase lifting of barriers across nations, as also technical gap possibilities. During this time lag, the commodities may not be moving as yet, but their underlying ideas or concepts can, and often do. Before the actual original products arrive at the borders, and jump across barriers, the ideas have already permeated and taken root. There is a local production and local consumption (the replicated/reverse engineered mode 1) of the products emerging from international ideas.

When the original product enters the local market employing any of the other modes, it has to contend with local versions that have already emerged. At the time of Coke’s re-entry into India post-liberalisation, there were already local substitutes (Thums Up and Campa Cola). When Levi Strauss, the original blue jeans manufacturer started its Indian operations in 1995, there were a host of Indian blue jeans brands (Newport, Flying Machine) that had already got established. The local denim market had also added “ready to stitch” jeans fitting with the Indian idea of custom tailored clothes. Ruf-&-Tuf jeans were “sold as a kit: two legs, buttons, rivets, zipper, leather label and an instruction booklet for the neighbourhood tailor” (Jordan 1997). Thus, international ideas had got locally entrenched along with their ingrained cultural content but had altogether bypassed the regular channels or modes of access. We thus have mirrored forms of local production and local consumption, not local in the strict

sense of the term.

References

Appadurai, Arjun (2000): “Modernity at Large: Cultural Dimensions of Globalisation”, Public Worlds, Volume 1, University of Minnesota Press.

Blonigen, Bruce and Robert Feenstra (1996): “Protectionist Threat and Foreign Direct Investment”, Working Paper 5475 (Cambridge, MA: NBER).

Blonigen, Bruce, Tomlin KaSaundra and Wilson Wesley (2002): “Tariff Jumping FDI and Domestic Firms’ Profits”, Working Paper 9027 (Cambridge, MA: NBER).

Borga, Maria and William Zeile (2004): “International Fragmentation of Production and the Intra-firm Trade of US Multinational Companies”, Working Paper, Bureau of Economic Analysis, January.

Chandra, Mohan N (2005): “Running Away with the Indian Market”, India Now Magazine, 2: 3, IBEF, 6 September.

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Issues and the World Trading System: The Road to Cancun and Beyond.

Gereffi, Gary, Miguel

Such cultural seepages are not just in goods or services, but are extended to entire consumer packages like the Valentine’s Day (Sahni and Kalyan Shankar 2006). In their attempt to expand their markets, the developed world (multinationals) transfers these packages to a third world consumer. As “second hand” users, third world markets or consumers do not really get the opportunity to assign new meanings to these objects of consumption. The transfer of meanings and symbols inherited from the west acts as a benchmark of consumption, even working as a standardising force of our urban cultures.

4 Conclusions

In the global itineraries of cultures, the role of global capitalism cannot be undermined. As cultures get driven by consumption, and nudged to anchor on material forms, economics matters all the more in cultural studies. In the quest for global consumption of a product, economics provides not just the means but also the modes for enabling such a possibility. But from a given set of economic modes it is the culture of a product that picks and chooses what mode will be most economical for it to spread.

Where do local markets end and global markets begin? This can be answered by placing commodities (or countries) in terms of their international connections of consumption as can be identified by placing them in the appropriate column of the grid. The four modes can be used as a tool to classify international flows (goods, services and capital) but can also track what flow will account for what kind of cultural leanings.

Korzeniewicz and Roberto

Korzeniewicz (1994): “Introduction: Global Commodity Chains” in Gereffi Gary and Korzeniewicz Miguel (ed.), Commodity Chains and Global Capitalism, Praeger Publishers.

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Hazelhurst, Leighton (1968): “The Middle Range City in India”, Asian Survey, 8: 7, Modernisation in South Asian Studies: Essays in a Changing Field, July.

Howes, David (1996): Cross Cultural Consumption: Global Markets, Local Realities (New York: Routledge).

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Horstmann, Ignatius and James Markusen (1987): “Strategic Investments and the Development of Multinationals”, International Economic Review,

28: 1, February, pp 109-21. Jordan, Miriam (1997): “Arvind Sates Global and Local Hunger for Jeans: An Indian Textile Mill Strikes Gold with Denim”, International Herald Tribune (Business), 20 November. Knoll, Alfred Phillip (1970): “Champagne”, The International and Comparative Law Quarterly, 19: 2, April. Love, John (1995): McDonald’s: Behind the Arches, Bantam Books. Miller, Daniel (1987): Material Culture and Mass Consumption (Oxford: Blackwell), pp 3-5. Rao, Chalapati K S, M R Murthy and K V K Ranganatan (1999): “Foreign Direct Investments in the Post-Liberalisation Period: An Overview”, Journal of Indian School of Political Economy, 9: 4, 439. Sahni, Rohini and V Kalyan Shankar (2006): “Romancing Material Culture in Urban Public Spaces: The Case of Valentine’s Day in Pune”, Economic & Political Weekly, Vol XLI, No 7, 18 February, pp 649-54. Snyder, Francis (2002): “Governing Economics

Globalisation: Global Legal Pluralism and EU Law” in Francis Snyder (ed.), Regional and Global Regulation of International Trade, Studies in European Law and Integration, Hart Publishing.

Strinati, Dominic (1995): An Introduction to Theories of Popular Culture (London: Routledge), p xvii.

UNCTAD (2007): World Investment Prospects Survey 2007-09 (New York and Geneva: United Nations).

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USITC (1999): “Production Sharing: Use of US Components and Materials in Foreign Assembly Operations 1995-98”, USITC Publication 3265.

Web sites

“Amit Sana’s Doing Fine, Fine, Fine!” http://in.rediff. com/movies/2005/mar/22amit.htm uploaded on 22 March 2005, viewed on 21 April 2008.

Census of India (2001): Website: http://www.censusindia.gov.in, viewed on 21 April 2008.

The Coca-Cola Company (2007): “Annual Report”, http://www.thecoca-colacompany.com/investors/ pdfs/form_10K_2007.pdf, viewed on 17 April 2007.

UN COMTRADE (2008): “United Nations Commodity Trade Statistics Database”, http://comtrade.un.org/, viewed on 7 April 2008.

UNCTAD (2007): “UNCTAD Handbook of Statistics 2007 Online”, http://www.unctad.org/Templates/Page.asp? intItemID=1890&lang=1, viewed on 7 April 2008.

WTO (2008): “Agreement on Trade Related Aspects of Intellectual Property Rights”, Article 23, p 329. http://www.wto.org/english/docs_e/legal_e/legal_ e.htm, 11 April 2008.

“Coca-Cola”, http://www.rzuser.uni-heidelberg.de/~el6/ presentations/pres_c2_hoa/CCSalesfigures.htm, viewed on 14 January 2008

“Champagne”, Wikipedia: The Free Encyclopedia, http://en.wikipedia.org/wiki/Champagne_(wine), viewed on 14 January 2008.

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