This essay is based on American Idol After Iraq: Competing for Hearts and Minds in the Global Media Age by Nathan Gardels and Mike Medavoy, published this month by Wiley-Blackwell.

The conflicts of the future are going to be as much about the abundant cultural flows of the global information economy as about the scarcity of oil and water. This is because competing values have been crowded into a common public square created by freer trade, the spread of technology and the planetary reach of media.

Only in such a world could a cartoon of the Prophet Muhammad in an obscure Danish daily newspaper inflame the pious and mobilize the militant across the vast and distant stretches of the Islamic world. Only in such a world would bloodied Tibetan monks be censored out of Chinese TV news reports, just to show up on YouTube, or would a CNN pundit in New York be sued by a Beijing schoolteacher for calling Chinese “thugs” and their exports “junk.” Only in such a world would the Vatican launch an all-out assault on the film The Da Vinci Code to convince audiences that popular fiction is not the same as eternal truth.

This global public square is the new space of power where images compete and ideas are contested; it is where hearts and minds are won or lost and legitimacy is established. It is a space both of friction and fusion, where the cosmopolitan commons of the twenty-first century is being forged.

Though facing intense challenges, the core of the global information economy today remains America’s media-industrial complex, including Hollywood entertainment–broadly defined as the commercial and professional production of American popular culture for mass distribution. If culture is on the front line of world affairs in the times to come, then Hollywood, as much as Silicon Valley, the Pentagon or the US State Department, has a starring role.

The reasons for Hollywood’s power over the last 100 years are clear. Long before celluloid or pixels, Plato understood that those who tell the stories also rule. And if music sets the mood for the multitudes, the warblings of Sinatra, Madonna and Metallica have certainly been the muzak of the American-led world order.

Above all, as philosophers have told us, images–the currency of Hollywood–rule dreams and dreams rule actions. That is because most people construct the worldview that informs what they do on an emotional basis rather than a rational one. They buy into a narrative not so much through the considered weighing of ideas as on what image they want to be a part of or associated with. What people identify with, or don’t, depends on the dignity, recognition and status those images–“that which presents an intellectual and emotional complex in an instant of time,” in the famous words of Ezra Pound–confer in their culture. In short, a person’s vision of “the good life” is largely determined by what works for them metaphorically.

It is why Saddam Hussein regularly played the Sinatra tune “My Way” at his birthday parties, and it is why we associate a moment of carefree, dancing joy with “Singin’ in the Rain.” It is why a middle-aged man buys a Porsche and why a teenager desperately desires a pair of Pumas. Sometimes the symbol can be more generic, as when blue jeans spread worldwide after the 1960s made a ready-to-wear statement about nonconformity and informal lifestyle. Apprehending the world by what works metaphorically is why the Camorra gang from Sicily mimics Hollywood films in its actual lifestyle, with women bodyguards wearing yellow tracksuits like Uma Thurman in Quentin Tarantino’s Kill Bill. It is why the villa of one of the Camorra’s top bosses was modeled down to the last detail on the mansion of Tony Montana in Brian De Palma’s Scarface. More profoundly, adopting a worldview by what works metaphorically is also why humiliated youths in Gaza, feeling righteous and empowered, cheered the Al Qaeda takedown of the Twin Towers on 9/11. It’s why Mexico’s demographics experts credit the daytime soaps with helping reduce the population explosion in that thoroughly Catholic nation.

In international affairs, public opinion doesn’t pick apart policies analytically but forms its sensibilities based on images. Where the Statue of Liberty was once the symbol of America, to many that symbol became the hooded prisoner at Abu Ghraib during the Bush tenure (though the very fact of Barack Obama’s nomination as the Democratic presidential candidate did more than all the years of Bush’s public diplomacy to restore some shimmer to America’s image). In Japan’s case, where once there was Tojo, now there is Toyota. In the early post-cold war days, Gorbachev taking his granddaughter to a McDonald’s said one thing. A muscular, bare-chested Vladimir Putin hunting boar in the Russian bush says something entirely more menacing, closer to a Ramboesque KGB assertion of raw power than to the image of glasnost or Swan Lake with which the West felt comfortable.

Lacking direct experience in the reality of others, people come to know such images largely through the media. The biggest projector of images in human history, of course, has been Hollywood. By and large, what Americans know about the world, and what the world knows about America, they know from the screen. Only 20 percent of Americans own passports; of them, only 7 percent travel in any given year–a ratio bound to get worse with the falling dollar. And in 2008 American film exports were ten times larger than film imports, a balance of trade more favorable than in any other industry but aerospace.

Often what foreign audiences learn is incidental–the well-appointed kitchen in the Leave it to Beaver TV show; the two cars in the driveway or kids with their own bedrooms in such thrillers as When a Stranger Calls (an unimaginable amount of private space in most places in the world); the expectation of fair treatment under the law and the sincerity of weighing fairness and justice in Twelve Angry Men; the casual relationship between boys and girls as the backdrop to shows like Friends or even the most innocent Disney Channel shows like Hannah Montana.

Sometimes films and television shows mislead outsiders about American life, for example, by the near total absence of religious expression in mainstream entertainment–leaving impressions, like the shadows in Plato’s cave, far from the truth. This “second-order” communication is often as powerful in the perception of the viewer as the first-order dramatic plot.

Osama bin Laden has never been to the United States; he only watched it on TV when he was growing up in Saudi Arabia. Most of the nouveau riche Chinese who buy up the California-style tract houses in suburban Beijing have never been to the Orange County their developments replicate; they’ve only watched The O.C. on pirated videos or satellite TV. Conversely, and just as significantly, what all too many Americans think they know about the rest of the world comes from movies like Around the World in 80 Days, The Manchurian Candidate, John Wayne’s The Green Berets, The Deer Hunter, Mission: Impossible III, the James Bond series or The Bourne Identity.

If there is a genius to Osama bin Laden’s madness in this context, it is that he understands that insular Americans, who don’t look back and don’t look around, also don’t think much about the rest of the world unless it intrudes upon their pursuit of happiness in a sensational way. In this vein, Al Qaeda has taken a page from the Hollywood handbook. Its real expertise is not military damage, but media manipulation through sensational acts of special-effects terror that rivet attention–both in the West and across the Muslim ummah–in a world crowded with other messages. Also grasping that America is a post-textual society that obtains information mainly from movies, television or the Internet. Osama bin Laden knows it is images, not concepts, that break through. Thus blockbuster acts of terror are the forte of this virtual caliph.

Unfortunately for the rest of the Muslim ummah, such powerful images work the other way as well. For most post-textual Americans, the “people of the Book”–Muslims–are now known mostly through sensational images of terror staged by Al Qaeda and its allies. The same terrifying images that inspire defiance in the young kid in Gaza also sow the seeds of fear and loathing among Westerners.

In the global battle for hearts and minds, America once had the metaphorical upper hand because we dominated the flow of images, icons and information, not to speak of English being the lingua franca, thanks not only to American hegemony but that of the British Empire before it. The democratization of media through technology is making that less true every day. Where CNN, MGM and BBC once ruled, now there are 75 million Chinese blogs, Al Jazeera, Al Arabiya and the Dubai Film Festival, as well as 200 satellite channels across the Arab world. A proliferation of jihadist websites, which have joined benign tele-Muslims like Egypt’s Amr Khaled in competing for the Arab soul, are every bit as influential as YouTube or Facebook in their own demographic. Where once American soap operas like Days of Our Lives filled boob tubes globally, now Brazilian, Mexican or Korean daytime TV shows have as great or even greater appeal.

Though for the moment Hollywood may still command the shock and awe blockbuster, national cinemas, as has long been the case in India, are gaining traction even as Hollywood itself is showing signs, if so far meager, of taking on a more cosmopolitan cast. In the midst of this technological and cultural democratization, America’s once lustrous image has become tarnished by the misadventure in Iraq, by Guantánamo and by the White House defense of torture–to say nothing of the globally broadcast scenes of the Katrina catastrophe, the Britney breakdown or the mortgage crash brought on by too much consumption and too little financial regulation (generating not a little schadenfreude among those we scolded in the Asian crisis a little more than a decade ago). It also doesn’t help that with 5 percent of the world’s population, the United States has 25 percent of the world’s incarcerated.

Despite America’s considerable technological and higher-educational prowess, we can, therefore, no longer assume, as we did in the triumphant days after the end of the cold war, that global public opinion will buy into the American narrative. We can no longer assume that the world out there so readily identifies with our idea of “the good life” as universally appealing.

Grappling with this challenge, so to speak, of American Idol after Iraq means understanding the power of the image and the rise of that power as manifested by the global dominance of American entertainment culture, the reaction to it and the increasing dispersion of images’ power due to globalization. And it means grabbing hold of the power of the image as a tool of cultural diplomacy in America’s quest to restore its lost luster.