In all the brouhaha about the need for greater investment, new capital expenditures, modernization of old industries and nurturing of new ones, we may be ignoring what I think is a critical factor behind economic success: an appreciation that your market consists mostly of people who are different from yourself.
Sam Goldwyn, after all, didn't make movies for elderly Jewish businessmen. He made movies for a vast middle-class American market, and he was successful because he made it his business to understand what that market wanted to see. Hundreds of Jewish businessmen, from the shtetls of Poland and the Lower East Side of New York, made it their business to understand what American women in Michigan and Mississippi and Montana wanted to wear. If they guessed right, they made money. If they guessed wrong, they were out of business.
The Japanese also can credit much of their success as a nation to an understanding of their difference from other people. On a mountainous island tucked away in a far corner of the Pacific, far away from anything but Korea, with no significant natural resources and not enough land to feed itself, with a language no one else can understand and a culture very much its own, Japan has been conscious that if it wants to be prosperous, it must learn how to sell products and sell them to people who are very different from its own.
Americans, in contrast, in a country spanning a fertile continent and bounded by two wide oceans, seem to assume that we have no one to please but ourselves. For many years our manufacturers produced almost entirely for the home market: it was too expensive for others to export goods here and too expensive for us to export our goods abroad. That is no longer the case. Moreover, as a high-wage country we have inevitably priced ourselves out of markets for low-wage products. To maintain our standard of living, we must produce high-wage products and services and market them to people all over the world, many of whom are very different from ourselves.
Americans have also become more different from each other than we used to be. Back in 1950, when the United States accounted for half the world's gross national product, we were a nation in which people wanted to conform, wanted to be average and normal, wanted to be very much like each other. We had just gone through 20 years of experience--the Depression, the war--which affected the large majority of us in the same way and, perhaps as a response to adversity, we found the voluntary regimentation of conformity comfortable.
In the years since, we have changed. Economically, we are probably more homogeneous: there is less difference today than in 1950 in physical comforts and day-to-day schedules between the top, middle, and bottom thirds of the income scale. But culturally we are very much more heterogeneous.
Our affluence has opened up options that 30 years ago few people seemed inclined to take. We have Brie people and van people, huge markets of single people and teen-agers that scarcely existed in 1950, people who spend their time and money on every imaginable form of recreation. Regional differences are not as vivid as they were; but within each of our large metropolitan areas there is an immense and generally unnoticed range of life styles and habits and beliefs. We don't notice how different other Americans are because we're not very curious about who lives in the next subdivision but one or attends the church that is a couple of miles away or frequents bars or stores that cluster around the freeway interchange we never use.
But for business--and for us all--the variety of the American marketplace should be appreciated, just as the importance of the varied marketplaces of the world should be understood. We make major decisions relying on a picture of the world that we have developed unconsciously over the years and have carried around in our heads unchanged in some cases for decades. We need to understand that the autarkic, culturally homogeneous America of 1950--the picture so many of us carry in our heads--is with us no more, though it disappeared only gradually and over the course of many years, not suddenly in an event no one could miss.