SYNOPSIS: The European buying spree is being taken calmly-- for good reasons.

For those of us who remember the great wave of foreign investment in the United States between 1986 and 1990, it's starting to feel like déjà vu all over again. Lately hardly a week goes by without news that yet another American business icon has become part of a foreign-based corporate empire. Some of the acquirees are the very companies that in the past tried to use their all-American identity as a marketing tool. For example, in the days of Lee Iacocca, Chrysler tried to convince people that there was something patriotic about buying mediocre cars festooned with chrome and simulated wood paneling. But now the minivan has married the Mercedes: Chrysler has become the junior partner in DaimlerChrysler. Seagram (strictly speaking a Canadian company, but with its center of gravity well south of the border) is being absorbed by the French firm Vivendi. And most recently, Union Bank of Switzerland has announced that it is acquiring PaineWebber -- that symbol of America's belief that it is both possible and good to become rich.

Yet history is not quite repeating itself. In the 1980's we reacted badly to the prospect of large-scale foreign ownership of American companies -- a reaction that was all the sillier because America had always ridiculed foreigners who expressed similar concerns about our multinationals. This time, the American public seems to be taking foreign investment rather calmly.

One reason for the difference may be that Americans just don't find today's European acquirers as sinister as the Japanese investors of the 80's. Is this racism? No doubt. But Japan a decade ago did seem to be playing by its own rules, in a way that the Europeans don't. (Actually, you do hear occasional complaints about France that echo what we used to say about Japan -- that while French companies are free to buy up competitors in Britain or America, when it comes to things like telecommunications the French government makes sure that the national team has a home advantage. But somehow "France S.A." doesn't sound as scary as "Japan Inc.")

Probably more important is that whereas in the 1980's America seemed to be selling itself to foreign companies out of weakness, this time foreigners seem to be buying into America because of its strength. The last foreign investment boom began after the dollar plunged against the yen and Europe's currencies in 1985-86; this made American investments look cheap, especially to Japanese companies whose stocks sold at the time at multiples worthy of a millennial dot-com. (Only later would the Japanese realize that this was the era of the "bubble economy.") Now, of course, the dollar is strong and so are U.S. stocks -- though the Europeans seem to be buying mainly companies whose valuations are not that far out of line with tradition.

So why are the Europeans buying? Partly because America, with its amazing "new economy," is where the growth prospects are. And partly also because the foreign buyers hope that they are buying not just bricks and mortar but also knowhow, that they can take a bit of that new economy back to headquarters.

And that is surely the really big difference between today and the late 1980's. It's hard to believe now, but a decade ago America was afflicted with severe self-doubt. These days we are so self-confident that, like Chinese conquered by barbarians in centuries past, we tend to assume that in a very short time our new rulers will be assimilated -- that a foreign firm that acquires a big chunk of corporate America will soon be an American firm in all but name. After all, hasn't DaimlerChrysler decided to adopt English as its corporate language? (And Vivendi -- sacré bleu! -- intends to do the same.)

So it's possible that the public acceptance of this new wave of foreign investment is mainly just a matter of complacency -- that we are currently so full of ourselves that we feel that in effect we are acquiring them, not the other way around.

But I'd like to think that there's more going on here than good old-fashioned American arrogance. We are a more sophisticated nation than we used to be -- better traveled and more aware of the world outside. And maybe, just maybe, we are even sophisticated enough to understand and accept the idea that globalization is a two-way street.

Originally published in The New York Times, 7.16.00