What does McDonald's Mean?

Reflections after a trip to South America.

Something happens to a country when it gets its first McDonald’s. There was once something called the Golden Arches Theory of Conflict Prevention. The journalist Thomas Friedman defined it in 1996: “No two countries that both have a McDonald's have ever fought a war against each other.” The theory has been disproven many times over. No one takes it seriously anymore; it failed to predict anything. But a kernel of truth remains. The first McDonald’s is the sign of a new era. 

I was a kid in 1996, when the first McDonald’s opened in Asunción, the capital of Paraguay. It was an anticipated event covered by the newspapers, fodder for family conversations. The prices were accessible only for the upper middle class. But everyone wanted a taste of America. A friend of mine, one of seven children, told me about his mother’s plan to take one child to McDonald’s every month, starting with the oldest. This was the only way his family could afford to give everyone a chance to experience McDonald’s.

A year after that, I moved to the United States with my parents. I have lived here ever since, returning to my birthplace every few years. I noticed the biggest changes during on a trip in 2019. The proliferation of big screen advertisements and billboards throughout the city, along with mostly-empty high rises where foreign millionaires parked their money, looked to me like a subtropical Times Square that stretched for miles longer than the real one. I was shocked. Visiting Asunción this June, I noticed fewer new things. Instead, there were more of the same things I saw in 2019. More high rises, more people living in apartments, more advertisements. And McDonald’s franchises everywhere, within and beyond the capital city.

What these new structures replaced were stately colonial homes, decaying office buildings, or empty lots. The center of Asunción, with its crumbling nineteenth century Beaux Arts houses, run down would-be European plazas, and historic colonial-era churches, remains as a reminder not so much of any other era as the time right before McDonald’s came to town. 

The changes I noticed in 2019 have continued their development, ushering in a new way of life (or system, or spirit) that is slowly maturing and congealing. Today, the upper classes are no longer interested in McDonald’s. “Now everyone is into being fit,” my cousin told me last month. She used the English word, “fit”, pronouncing it like feet. You can hear a lot of English in the posh districts of Asunción: too much, home office, bro, love. Entrepreneurs trained in American universities have succeeded in reproducing many of the attractions of American city life. In the nicer neighborhoods, you can find microbreweries and craft burger joints. Young adults work in coffee shops where the tables are strategically placed near electrical outlets. A Third World nation’s “development” can mean many things, and one of them is the replication of North American creature comforts. 

Official statistics report that a quarter of all Paraguayans live below the poverty line, and that the Gini coefficient is still high. But wages are rising, and more workers find jobs in the service sector or professions when, in previous decades, they would have worked as domestic servants. As a friend told me, “You go to the movies these days, and you see people that you don’t know.” It used to be that only the top earners — like my friend — could afford to go to the few movie theaters in town. But now there is more money, more movie theaters, and a rising middle class that wants to spend.

That first McDonald’s was a harbinger of all this. Today there are over twenty McDonald’s restaurants around the country — not many, but with more people per outlets than Ecuador, Peru, and Colombia. Pizza Hut, Burger King, and Friday’s have also made inroads. The market for these restaurants is no longer the haute bourgeoisie, but families in mid-sized towns near Asunción, whose pockets are deeper than ever before. Appliances, entertainment, fashion — more people have access to these goods than thirty years ago. Credit is abundant. Televisions, motorcycles, trips to Brazilian beaches, all advertise payment by monthly installments. 

But one thing that the middle class cannot afford, usually, is private security, a most coveted resource. The redoubts of the upper classes have become more noticeable as the contrast between the rising middle class and the upper class has become more stark. An upscale house built during the three decades of military dictatorship, when the police were ruthless and crime was low, might be surrounded by a waist-high brick wall or elegant ironwork lining its perimeter. But with democracy and economic growth also came a spike in crime. A house built after the re-establishment of democracy in 1989 would be twice as high, and along the top of those walls, pieces of broken glass would be cemented in place so as to jut out and repel burglars. Today, the broken glass has been replaced by spirals of barbed wire. The homes of high earners usually bear the tag from one of the two private security firms; everyone has either Protek or Prosegur.

The rising middle and the entrenched privileged classes are not necessarily destined to clash. But where are they going? They are not part of a common political project, nor does the longstanding ruling party seem very interested in building a lasting public infrastructure that would defuse class conflict. The only available answer seems to be: more economic growth, growth without a guiding political ideal. “Bring more money into the country,” people put it. If growth stalls, Paraguay will become stuck in what economists call the “middle income trap.”

How to avoid the trap? One answer is opening up trade relations with China — a big issue in the last presidential election. (Paraguay currently recognizes Taiwan.) Chinese markets and imports would mean more money coming into the country. But let’s assume that Paraguay avoids the middle income trap. What then? The spirit, the system, the way of life that I observed in Paraguay will continue regardless of whether the economy keeps growing or stalls for a decade. It will dominate whether the country aligns itself with the US or China. And what it means is more McDonald’s. But what does the McDonald’s era mean? What is it about?

From the American point of view it's possible to tell a different story about McDonald’s. The 2016 film, The Founder, told the story of the founding of McDonald’s as a tragedy. The film celebrates the resilience and genius of Richard and Maurice McDonald, and it portrays Ray Kroc, the salesman who all but stole the company from the brothers, as a nemesis. If ever you’re bothered by an American cityscape with one too many sets of Golden Arches, you can console yourself by thinking that those Arches represent both the best and worst of American life. But for a country like Paraguay, McDonald’s is not an organic development of the country’s history. It is an emissary from another world.

This post is part of our collaboration with the University of Pittsburgh’s Center for Governance and Markets.

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