Opinion |

Fallen Arches: McDonald’s Didn’t Prevent Putin From Invading Ukraine After All

It was once thought that nations might beat their swords into burger flippers, but 850 restaurants in Russia didn’t stop Putin from going to war. It’s McDonald’s that’s surrendering

David Rosenberg
David Rosenberg
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Hundreds queue outside Moscow's first McDonald's restaurant which opened January 31, 1990.
Hundreds queue outside Moscow's first McDonald's restaurant which opened January 31, 1990. Credit: Reuters
David Rosenberg
David Rosenberg

You can only feel pity for Russia’s bourgeoisie. Since their leader chose, without consulting with them, to invade Ukraine in February, they have been deprived of their morning Starbucks coffee, Kentucky Fried Chicken lunches and dinner-time Big Macs, to name a few of life’s necessities.

Ordinary Russians could at least hold out hope that once Ukraine had been thoroughly de-Nazified, all these Western brands would be back and life would return to normal. However, that won’t be the case for the Big Mac: McDonald’s announced on Monday that it is abandoning the Russian market, selling its 850 restaurants and taking off a $1.2 billion writeoff.

“It is impossible to imagine the Golden Arches representing the same hope and promise that led us to enter the Russian market 32 years ago,” Chris Kempczinski, McDonald’s CEO, wrote forlornly in a message to franchises, employees and suppliers.

For McDonald’s and its shareholders, the “hope and promise” was to boost its overseas sales and profits at a time when its home market in America was all but saturated. In elevated language, Kempczinski was saying that the fast-food giant doesn’t expect Russia to be a profitable place to do business anytime in the foreseeable future.

But there’s a bigger message in this – one that maybe even McDonald’s executives felt from time to time as they introduced Russians to the joys that American capitalism could deliver: The Golden Arches would not only symbolize the new peace between Russian and the West after the fall of communism but would actually help ensure it.

On the surface that seems silly and now, with McDonald’s exiting Russia, even sillier. But since the dawn of capitalism, many perfectly respectable thinkers, including Immanuel Kant and Joseph Schumpeter, believed that international trade and finance would deter countries from going to war with each other because it would be bad for business and their economies.

Norman Angell suggested (unfortunately not long before the First World War) in a book “The Great Illusion” that modern finance made war unprofitable for the winners. After World War II, the European Coal and Steel Community, the precursor to the European Union, was founded on the principle that if the countries of Europe were integrated economically, they wouldn’t go to war again.

Thomas Friedman, The New York Times’ columnist, took up this idea in a new form, dubbing it the “Golden Arches theory of conflict prevention.” The thesis was that “when a country reaches a certain level of economic development, when it has a middle class big enough to support a McDonald’s, it becomes a McDonald’s country, and people in McDonald’s countries don’t like to fight wars; they like to wait in line for burgers.”

That was 25 or so years ago, just after the fall of the Berlin Wall, when it looked like Western free markets and democratic institutions were on their way to becoming a global norm. Friedman later developed another theory called the “Dell theory of conflict prevention,” which posited that the global supply chain would ensure peace, at least among those who belonged to it. In this formulation, it wasn’t so much consumers that would discourage their leaders from waging war, but the threat of economic upheaval if the global supply chain was broken that would deter war-mongering.

Neither formulation has stood the test in the case of Russia. As a provider of energy and raw materials, Russia was part of the global supply chain, and its economy is now suffering immensely from being expelled from it. But that apparently did nothing to deter Vladimir Putin. Would ordinary Russians have preferred a Happy Meal over Ukraine? No one asked them.

Ironically, Putin may actually subscribe to the Golden Arches theory – but not in the way Friedman imagined it. Unless he is wholly delusional, the Russian leader must have expected his country to be hit with Western sanctions, but he assumed that the West wouldn’t be able to bear the cost of the sanctions for long.

That is because Russia is only a McDonald’s country in name; America and Europe are true McDonald’s countries, whose citizens wouldn’t tolerate higher food and energy prices, much less shortages (in fact, the price of fast food in the United States has soared since the war). In the economic war that’s now being waged side by side with the real war in Ukraine, Putin is betting that the real McDonald’s countries will quickly lose the will to fight. They will soon trade Ukraine for a lower-cost burger.

That’s a problem for the Golden Arches theory: The fact that a country has a middle class with enough spending power to make a business case for McDonald’s to open restaurants doesn’t mean it’s bought into the Western-led global system. Nor is there much evidence that the presence of McDonald’s and other Western businesses by itself will gradually cause people to admire and adopt Western values.

Quite to the contrary, recent history shows the opposite. McDonald’s has been expanding globally over the last three decades as part of the wider process of globalization.

Today, with a few outlier exceptions like Iceland, the countries that don’t have a McDonald’s are mostly the poorest, most oppressive and most isolated in the world, like North Korea, Myanmar, Chad and Yemen. But a lot of the countries that do boast a McDonald’s aren’t exactly among the world’s model citizens, such as Venezuela, Libya and Belarus either.

Today, McDonald’s has no less than 39,000 restaurants in more than 120 countries.

Yet while Golden Arches have been sprouting up across the globe, for the last 16 years democracy has been in retreat, according to the annual Freedom House survey.

Oddly enough, one place in the world where the Golden Arches theory actually plays out to some degree is the Middle East.

Being the beacon of democracy that it is, Israel got its first McDonald’s in 1993 and today counts 180 restaurants. Egypt saw its first McDonald’s open in 1994 and now has 100 outlets, and Jordan followed in 1996 and boasts 31. We haven’t fought a war since. Things look promising for the Abraham Accords: The United Arab Emirates has no fewer than 172 restaurants.

By contrast, we have been fighting to one degree or another with the McDonald’s-less Palestinians, Syria and Iran (Iran has its own knock-off McDonald’s, but that doesn’t count). Lebanon does have McDonald’s, but it got its first restaurant in 1998 and since then we’ve fought only one war with it. Could that be what’s restraining Hezbollah?

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