THERE IS A STORY about Japanese director Yasujiro Ozu: It was the summer of 1939, and Japan's nationalist temper was growing shorter with each passing day. War with America seemed not only inevitable, but distinctly manageable: Americans may be big and brash, the Japanese reasoned, but they were also lazy and indulgent, reeking of butter and whiskey, bloated and easily wrestled to the ground.

During this time, Ozu meandered into a movie theater that was, curiously, showing a Warner Bros. Busby Berkeley musical--perhaps Dames or Gold Diggers of '35 or In Caliente or something--and bought his ticket. It is a delectable image: Japan's soft-spoken humanist poet, an artist known for the rigid austerity and eloquent silence of his films, transfixed by the image of 300 chorus girls in shimmering tutus dancing on 65 pearly white pianos, splashed across a whirling stage in a feverish display of nationalistic daydreaming.

Biographers say that Ozu emerged from the cinema with the absolute, empirical understanding that Japan was doomed to lose the war. Any nation that could do that--that could devote such grim determination to absolute frivolity, that could create such a monument to nothing at all--any nation that could make those movies, he reasoned, could win a war.

HOLLYWOOD TRIUMPHANT

Fifty-five years after Japan lost the war, Hollywood remains the most powerful colonial weapon on the face of the planet. Robert Clives' East India Company had nothing on Bill Mechanic's 20th Century Fox. Despite the much-ballyhooed triumph of Independent Cinema in the 1990s, the last decade of corporate history in Hollywood shows plainly that the true triumphs have been won by the major studios. Ignoring the historical mandates of the U.S. government's trust-busting decisions of the late '50s and early '60s, which forcibly divested the studios of their theater chains in a strike against oligopoly, the huge corporate concerns that now parent Hollywood--Seagram, Sony, Rupert Murdoch's News Corporation--have deftly re-assembled their media arms into gargantuan, vertically integrated systems that, once again, control both production and exhibition resources. Take the cases of Time Warner, with its mammoth Warner Bros. studios feeding both print media and myriad television outlets, and Sony, with its studios (Columbia, Sony Classics) feeding directly into its theaters. Hollywood has put itself back together again, and it seems to all make sense once more.

A massive oligopoly of roughly seven studios lays claim to 70 percent of world film revenues, with American films hogging upwards of 50 percent of foreign screen time, and invariably claiming at least half of the top 10 highest-grossing spots in foreign nations including France, Italy, Britain, Japan, Sweden, and Germany. In fact, it is only in a few "hostile" nations where "unfair trade" is practiced (Iran, China) that Hollywood still lags behind in market share--and we're doing all we can to change that.

THE CHAOTIC UNDERPINNINGS

But does it make sense? To be sure, The Movies make money--but the real question is, how much? Historically, The Movies have actually been a fairly poor bet in the stock market, returning, on average, a sickly three percent. And while there are definite success stories, such as DreamWorks' current rise, on the whole the business is volatile enough to undo even the most seasoned corporate strategists. Both Seagram and Sony suffered great losses following their entries into The Movies, with Sony writing off a record $3.2 billion in 1994.

Moreover, Hollywood has long been legendary as a chaotic, unpredictable corporate community. Nepotism runs rampant, factions rise and fall almost daily, and large-scale fiscal policy is decided at the flip of a coin--literally. (In fact, in 1998, DreamWorks and Paramount divvied up worldwide rights to Deep Impact by doing just that.) With individual egotism taking the place of corporate planning, personal spite becomes the mission statement guiding multi-billion-dollar enterprises; the most significant engine that fuels the rise of DreamWorks is David Geffen and Jeffrey Katzenberg's respective hatreds of Michael Ovitz and Michael Eisner.

The fact is that Hollywood is run more in the style of a corrupt Third-World government than a sensible American business. It is painfully obvious that the huge companies that get involved in the movie business are not justifying their decisions according to any traditional measuring sticks of fiscal wisdom: Indeed, they are engaged in a different game entirely--one with far deeper implications than quarterly dividends. People don't get involved in Hollywood to make money; they get involved to further the American vision.

THE PROSELYTIZING CIPHER

Hollywood is America's imagination. Its role is twofold: On the one hand, it is the canvas upon which we must define the scope of our social ambitions. Our sex, our heroism, our fears of being ugly are all played out for us to witness and absorb. The Hollywood film is the veldt in which Americans may reflect on this experimental civilization we are ceaselessly re-defining; it is the dressing room in which we try on different civic costumes. On the other hand, Hollywood's products are meant to translate the findings of our social experiments to the world at large. In the past century, Americans have grown steadily convinced that they are "on to something"--that they have licked some age-old conundrum of civilization itself. Hollywood constantly shouts this fact worldwide. A proselytizing cipher, cloaked in pernicious propaganda citing entertainment value, titillation, and ravishing spectacle, the Hollywood film convinces not just us, but the world at large, that to be an American is to live the way god (not God) meant us to.

THE PRE-HISTORY OF THE INEVITABLE

At the dawn of a new century, the promotion of successful commerce has become synonymous with the dissemination of democratic ideals. In an arrogant Valentine's Day speech given a decade ago, then-CEO of Time Warner J. Richard Munro described the world as "a free market of the human mind [that] is coming into existence, a market for images, information, and entertainment unconstrained by physical frontiers or ideological boundaries." He went on to boast that "American influence is introducing new voices whose popularity and vitality might just run the cultural monopolists out of business." Wouldn't that make America the new Cultural Monopolist?

Hollywood's cultural identity is the apotheosis of manifest destiny. Finding itself at a dead end at the Pacific Ocean, America chose to keep expanding in an imaginary continent that continued as far as the eye could see. The Movies provided the perfect vehicle for this effort: a flexible delivery system for the subconscious; a canvas on which to imagine an entire nation's future identity. Furthermore, the Hollywood of the '10s and '20s presented an ideal opportunity for nationalistic dreamers: a new socially and racially accepting industry built up in a desert in the middle of nowhere, The Movies attracted a new class of entrepreneurs whom historian Neal Gabler described as having "a ferocious, even pathological embrace of America."

The industry these entrepreneurs created was, like the town they lived in, isolated, deluded, and introverted. It was also intensely nationalistic. Hollywood quickly became a tool for the new American century, with each World War only furthering its dominance vis-à-vis the European cinema. In fact, following World War II, U.S. Secretary of State James Byrne refused aid to France until they increased the allowance of American films on their screens. Similar leverage is currently being used against China and Korea, with foreseeable results.

WAR AND PEACE

As a child, I often pondered what it might be like to live during wartime, to live in a nation that was actively involved in furthering a point of view through aggressive means against other peoples. I fancied it would be akin to living in an actual battle zone, with great divots missing from sidewalks and blood smeared on storefronts faced with broken glass. I thought the air would be scorched, and that there would be constant mayhem on the periphery.

But Hollywood is more like Tolstoy's Moscow. On the front, in the streets of Stockholm or Beijing, there is a battle; it subtly tears the old nation down and builds a colony in its place. Away from the front, the war makes our nation richer, allows us to bask in the gilded promise of our destiny.

It is hard to locate the shame of a system in its prime, from within. It is only many years later that we may fault Portugal for the violence of its Jesuit fervor; only as observers of the Dutch may we judge the shame of their innocent spice trade; only as a reasonable race can we summon disdain for the expansionist mandate of Shiite fundamentalists. Our nation is winning a war, and we are winning it by believing in it. We will harbor no complaints. Anyway, to do so is unpatriotic; god (not God) save Mel Gibson.