Coca-Cola and postwar market liberalization

From time to time I find myself reading about episodes in French history that, while not strictly related to the university system, nonetheless seem like important points of historical reference. This one will, I guess, probably be well known to any French historian, but it was a surprise to me. It has to do with the economic politics of Coca-Cola’s arrival in France in the period just after the Second World War. Let me quote a long passage from Robert Gildea’s handy France since 1945, which is where I found out about this:

The Americans insisted on the right political conditions for aid [direly needed by post-war Europe]; they also demanded the right economic conditions. These were imposed by a series of missions in each European country receiving Marshall Aid… and bilateral agreements made with each recipient power. That with France was signed in June 1948, and the three brief ministries in power between 1948 and 1949 all pursued policies of economic austerity, balancing the budget by spending cuts and tax rises, and price and wage controls to bring down inflation. The Americans also required that all barriers to their exports and investment be removed, so France was inundated not only by American products but also by propaganda selling the American way of life. ‘Will France become an American colony?’ asked one book in 1948, exposing the threat from American Westerns and gangster movies, children’s comics such as Donald, Tarzan, and Zorro, and magazines controlled by Reader’s Digest, called Sélection in France.

The French won a minor victory in September 1948, when the French boxer Marcel Cerdan became world champion by beating an American in Jersey City. The real battle, however, was fought over Coca-Cola. Fed to GIs during the war, it was then the object of a sustained campaign to penetrate European markets. Coca-Cola was not simply a product, it was an image: that of the consumer society, on the wings of mass advertising, ‘the essence of capitalism’ in every bottle according to its president, James Farley, a weapon in the global ideological battle against Communism. Bottling operations were started in Belgium, the Netherlands, and Luxembourg in 1947, but in France there was great opposition, first from the Communist party, which argued that they would become ‘Coca-colonisés’ and that the distribution network would double as a spy network, and second from the winegrowing, fruit-juice, and mineral-water interests. The French government, concerned by the trade deficit and the repatriation of profits, turned down requests by Coca-Cola to invest in France in 1948 and 1949, and banned the ingredients from Casablanca.

A bill was tabled by the deputy mayor of Montpellier on behalf of the winegrowers to empower the health ministry to investigate the content of drinks made with vegetable extracts in the name of public health. Its passage through the National Assembly in February 1940 provoked a storm of controversy. Farley visited the State Department and the French ambassador in Washington. The Americans put pressure on the French government. An article appeared in Le Monde entitled ‘To Die for Coca-Cola’, mimicking the ‘To Die for Danzig?’ article of 1939. ‘We have accepted chewing gum and Cecil B. De Mille, Reader’s Digest and be-bop,’ it read. ‘It’s over soft drinks that the conflict has erupted. Coca-Cola seems to be the Danzig of European culture. After Coca-Cola, enough.’ The French government was caught between the anger of French public opinion and the need to retain the favour of the American government. In the end the matter was resolved by the French courts, which ruled that the contents of Coca-Cola were neither fraudulent nor a health hazard. The French government retained its honour and the Americans obtained their market.


I had always had a sense that Coca-Cola is at times perceived as some sort of symbol of America here in France, a sense that there is at times resentment of certain sorts of American commodities, particularly the ones that come to define mass culture. But I had always imagined that these resentments were mostly based on a sort of arbitrary cultural antagonism, a bit of commodity nationalism, and maybe a certain amount of more general geopolitical and historical distress that the French Empire is mostly gone while the USA has been globally ascendant. What to me is so striking about this tale of Coca-Cola is that, actually, no, things seem way more specific than that. Actually it seems that there’s a fairly direct reason why French people might be antagonistic towards Coca-Cola: in a word, that it was imposed on them as a condition of American post-war economic aid. That it was imposed, more broadly, as one facet of an American-imposed economic liberalization — meaning free access for American corporate goods and investments. (In passing, I have to say I was not really aware that this sort of coercive free trade policy had been imposed on Europe by the USA after 1945; these days it seems like it’s usually the global South that’s mentioned as resisting free-market policies.)

Now, I doubt that this Cold War episode about the introduction of Coca-Cola is likely known to a very large fraction of today’s French population. And it bears saying that Coca-Cola is a massively well-entrenched feature of consumer drinking culture here, available at virtually every restaurant and supermarket I can think of, brought on family picnics and widely consumed in campus cafeterias — and it’s almost never the object of any visible controversy. Nonetheless, the lesson for me is that, to the extent that there are lingering antagonisms towards Coca-Cola and other similar products (eg, McDonald’s), these may have a fairly concrete historical justification.

Of course, to push things one step farther, we also have to think about why Coca-Cola became the object of calculated opposition in the first place — why, in other words, it became an objectionable symbol of Americanization. According to Gildea, again, two groups led the opposition: the French beverage industry, which obviously had an economic interest in keeping out foreign competitors, and the French Communists of the time, who were presumably fairly anti-American in that period. Conversely, of course, Farley from Coca-Cola claimed that his product was the essence of capitalism in a bottle, which does make the ideological conflict with the French Communists seem inevitable…

I for one was happy to be reminded that even these hyperbanal products of everyday consumption, like Coke, have political histories. Of course, these political controversies continue in the present.

17 thoughts on “Coca-Cola and postwar market liberalization

  1. The Marshall Plan and its economic consequences were a staple of the history classes in “Terminale” when I prepared “le bac”. It was a long time ago, but I think that the curriculum is still the same. You only need a professor a little bit on the left, or on the nationalist side of the political spectrum, to get the sense that the Marshall plan was a “cheval de Troie” to get US product (and cultural products too) on French soil.

  2. Thanks for this information, Baptiste! It’s very interesting to know that, contrary to what I would have guessed, actually this bit of history is still transmitted in French history classes. Now we only need a bit of sociological research on the effects of this historical education on actual consumption practices. What fraction of the contemporary French population do in fact have a politicized reading of Coca-Cola today? Any guesses?

  3. One of my favorite Billy Wilder movies, “One, Two, Three,” is about efforts to introduce Coca-Cola into the Soviet Union from a base in West Berlin. So it hs nothing to do with France, but it might be a pleasant diversion.

  4. There’s also an Australian comedy called “The Coca-Cola Kid,” from 1985, which is about a young marketing executive’s attempt to bring Coke to an as-yet-unexploited market in the outback.

  5. I don’t know what the U.S. requested/demanded in exchange for the foreign aid in the Marshall Plan, so I won’t explicitly defend it.

    But since you label it coercive, I can’t help but ask what definition of coercion you are using?

    I trust that an issue is the wealth and power differential between the U.S. and France. What would prevent an agreement between parties with significant wealth and power differentials from being coercive?

    Is it coercive when a government imposes restrictions on what their citizens can buy and how much they pay, based solely on which side of a border a manufacturer is on? What about when a government restricts who can cross and live within their borders based upon where they were born?

  6. Hi Mike,
    I’m not going to venture a general definition of coercion, but my point is that if post-war Western Europe was economically devastated and in need of material assistance, the US was in a position to set legal and ideological conditions that it wouldn’t have been able to impose in less dire material circumstances. As for your latter two questions, we have to distinguish between a government’s regulation of its own citizens and its behavior towards other states. I’m not sure that the same kinds of analyses of coercion would apply on both levels. That aside, your framing of the protectionist question seems to me biased by an assumption that free markets = freedom in general, an equation I reject though not one I’ll examine here. As for the movement of individual people across borders, have you ever lived abroad? The coercive power of states vis-a-vis individual movement is obvious.

  7. “Coercion” in the sense that GIs marched into French cafes, and demanded at bayonet point that the citoyens guzzle the brown and fizzy elixir? Right. Sure.

    I’m sure a sufficiently clever left-wing academic can twist the meaning of “coerce” to mean anything at all, but this is a bit much.

    Is it “coercion” that the French state promotes the consumption of its patrimonial wine, cheese and New Wave movies?

    Why should the French beverage industry have a veto over the beverage choices of the French people?

    Is there any evidence that the French Communist Party’s position was a widely supported one? At least in France, people had the opportunity to ignore the Communists if they wished, unlike in those countries where Communists actually governed.

    The anti-Coca-Cola campaign is as brilliant as Roger Vailland’s imperishable anti-refrigeration polemic:

    http://books.google.com/books?id=kxUteLoAABoC&pg=PA49

  8. Note to all! I’m approving that last comment mainly as an example of what to AVOID in commenting on this blog. Here is a list of things that, in the future, may be grounds for DISapproval of comments on this blog:

    -Gratuitously insulting the blog author (me) and displaying baseless superciliousness (first two paragraphs).
    -Giving a fake email address — I discovered that the address attached to this comment, jasonm@yahoo.com, is nonfunctional. (The author is likely one of several Jason Ms listed in the Southern Methodist University directory, which owned the IP address in question. Yes, it is easy to find these things out.)
    -Pointless displays of right-wing political prejudice: there are plenty of other forums for that, and I see no reason to support it here.
    -Not reading (or not understanding) the previous comments before posting and hence repeating complaints that have already been discussed. In particular, Jason advances a sort of rational-choice, market-oriented “but if it’s not at gunpoint it can’t be coercion” argument, which Mike already had invoked and which I had responded to. My response may not have been sufficient and Mike might have a point — that’s entirely possible! — but further discussion ought to at least depart from that earlier discussion.

    Basically, this is my blog and the reason I allow comments is because I enjoy the discussions. So if you antagonize me (which is not the same as disagreeing with my claims!), especially if you are a total stranger, that probably means the discussion isn’t going to suit me. For future reference.

  9. The historical cluelessness of Jason’s comment, incidentally, is fairly obvious. The French Communists were very popular in the first years after WW2 and the French Resistance, winning the largest number of seats in the 1945 elections and were then part of the governing coalition — until they were forced to leave the coalition government in 1947 in order to secure Marshall Plan aid, it appears.

  10. At this point, the fact that governments and international organizations like the IMF can coerce less privileged nations into accepting conditions to which their lack of privilege makes them uniquely susceptible is quite obvious, and doesn’t really need qualification. America gives away heaps of international aid each year, and you can bet that, in every case, the receipt of said aid is based on certain conditions being met. Usually this means taking steps toward a political or economic ideology that is more in line with America’s, or a policy which allows American firms to exploit the country, in various ways, for profit.

    If physical force were the only way a world power could get other nations to bend toward its purposes, the world would basically be in ashes right now. It’s obvious, on its face, that economics can be, and is, a form of coercion. It’s probably the most prevalent form of coercion on the planet.

  11. Max, Eli was unwilling to define coercion, are you willing to give it a shot?

    I am not claiming that free trade should always and everywhere be considered synonymous with, or the most important form of, freedom. Nor am I claiming that the agreements between France and the U.S. in the aftermath of W.W. II are just (I know too little about them).

  12. Not that the definition of coercion is the whole point. I’d like to understand all the factors we should consider when evaluating the arrangements between the U.S. and France after the war, or in more general circumstances if possible.

  13. Michael:

    Coercion doesn’t have a stable, solitary definition. You can coerce through threat of force. You can coerce by making assistance contingent on an abnormal condition. It would seem that the latter is the form of coercion we’re talking about here. By “abnormal condition,” I mean something that one wouldn’t require of, in this case, every foreign state. For example, if I control a powerful country, and I’m in the position to lend money or give aid to less powerful foreign states, I’m probably always going to ask for interest in the case of loan, no matter what country I’m dealing with. But I’m probably only going to extract certain other conditions–such as the institution of policy decisions that make your nation’s economy, politics, etc. more amenable to mine, or present scenarios where firms from my country can come in and exploit your markets more easily–from countries that are in the most need, and therefore not in positions to argue.

    I’m not sure how one can’t see this as a form of coercion. You may, at the end of the day, think that it’s “fair” or “not bad” to do something like this, in all cases, but it is, I think, nonetheless coercive. Because conditions beyond those that are normal for ever case have been extracted as a result of asymmetry in power. If you look at the case of coercion based on a threat of violence, the same dynamics are in play. You get what you want not by reasoning or negotiation, but because of an asymmetry in power. It happens all the time–not just from America, by the way–and the extent to which it is objectionable, I think, depends on the case in question. It’s not a black & white issue. But I think it would be foolhardy to form some wholesale denial that this constitutes coercion.

  14. Though there are many circumstances where unilaterally opening a country’s markets to foreign competition will benefit a majority of it’s population. My impression is that for political reasons it is more common for relative equals to negotiate mutual reductions in trade barriers, which seems not all that different from a reduction in trade barriers in return for loans.

    Regardless of how one defines coercion, I think there it is usually morally significant to distinguish between:
    a) “Give me X, or I will take Y from you,” and
    b) “If you give me X, I will give you Y. Of course, you may decline, make a counter-offer, or attempt to gain Y through trade with someone else.”

    I acknowledge that a power differential between two people or groups is worth noting, and amounts to a situation in which “unfair” agreements are made more likely. But the truth is I don’t even know how to define powerful. A power differential seems neither necessary nor sufficient for identifying agreements I would personally object to, or agreements I would like the state to forbid.

    For example, Google seems powerful relative to me, or one of their individual employees, but overall seems to treat both very well and seems to be an enormous force for good in the world.

    On the other hand, relative equals often come to agreements which seem, if not unfair, certainly less than ideal. For example, two adolescents agreeing to exclude a third from their group of friends.

    I guess what I’m looking for are clearly defined principles which justify various forms of action. For example, there might be certain considerations which justify the authority of world goverment, a broader set which justify the laws of a nation, a broader set for a smaller political jurisdiction, on down to the individual who has the most freedom and least responsibility to justify their rules of action. The same type of thinking would apply to social norms applying to larger and smaller groups.

    ok, if you want an excuse not to respond I’ll give you one. 😉 I need to go focus on my work and may or may not to respond to your response. Thanks for providing such an excellent place to exchange ideas.

  15. Michael —

    There are no “clearly defined principles which justify various forms of action.”

    What I will say is that, as much as your free market mentality seems to reflect that of the American capitalist institution, even the American government places a fairly heavy burden on a corporation that would seek to control too much of its market, specifically because we understand that such power imbalances lead to extreme forms of coercion. If you don’t believe this, I’d suggest reading up on the Industrial Revolution, and examining why workers’ unions emerged (and fought literally bloody battles in order to survive). There was a point in time when corporations would call in private security firms to beat their workers into submission. Yes, even the Good Ol’ US of A!

    What I already argued–and I think this is a very general claim–is that anything “abnormal” extracted because of a power differential, can be explained as having been gotten via coercion. The extent to which such forms of coercion are tolerable will depend entirely on the case, and also, as always, on one’s perspective. Some will appear benign, or even fair, while others will appear cruel and/or overreaching.

    In other words, if you’re looking for a black/white standard, where we can say “Well, this one is good, but that one is bad!” I don’t think you’re going to find it.

  16. I don’t think I suggested that monopoly was unproblematic, and I certainly don’t hold to a doctrinaire libertarian position.

    I’m not looking for a black/white standard, I’m looking for a set of factors/standards/considerations. I think you offered a reasonable suggestion, the combination of a power differential and an abnormal agreement. The “abnormal” part seems to favor the status quo which doesn’t sit well with me. We also mentioned the threat of violence as being a factor. I’m sure there are other aspects to consider.

  17. In this case, “abnormal” merely refers to any condition that wouldn’t ordinarily be extracted from another nation unless it were in a particularly poor position to quibble over it (i.e. a large power differential). An interest rate on a loan is something I think we could call “normal,” whereas an agreement to open the loan recipient’s economy up for foreign exploitation is sort of “abnormal.”

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