The Lexus and the Olive Tree (published April 2000) is Mr. Friedman’s effort to define human affairs today. He is the foreign affairs columnist for the New York Times, and in the past he has been bureau chief for the Times in Beirut and Jerusalem. He has traveled extensively, from the Amazon to Southeast Asia to Berlin to Angola to rural China and much more as a reporter with the Times. His anecdotes and metaphors drawn from these experiences are alternately educational, insightful, and amusing, although his theory is overzealous. He styles himself “one of America’s leading interpreters of world affairs.”
The inexorable integration of markets, nation-states and technologies to a degree never witnessed before – in a way that is enabling individuals, corporations, and nation-states to reach around the world farther, faster, deeper and cheaper than ever beforeï¿½
He also says,
ï¿½the more I observed this system of globalization at work, the more obvious it was that it had unleashed forest-crushing forces of development and Disney-round-the-clock homogenization, which, if left unchecked, had the potential to destroy the environment and uproot cultures at a pace never before seen in human history.
He divides the book into three parts:
defining and illustrating the system of globalization
how people, corporations, and nations relate to it
the challenges to the sustainability of the system and the role of the United States
This response is intended to present Mr. Friedman’s argument and to discredit much of it. This book is rife with hidden (and blatant) assumption, contradiction, and faulty logic. The subtitle of this book is ‘Understanding Globalization’, yet his arguments lack historical analysis and a clear understanding of the power structure of human affairs.
That globalization is not simply a trend or a fad but is, rather, an international system. It is the system that has replaced the Cold War system, and, like that Cold War system, globalization has its own rules and logic that today directly or indirectly influence the politics, environment, geopolitics and economics of virtually every country in the world.
He focuses on the differences between the “Cold War” era and “Globalization” in colorful, sometimes inane metaphor: “how big is your missile?” vs. “how fast is your modem?”, sumo wrestling vs. 100 meter dash, or “friends and enemies” vs. “competitors”.
First of all, to look at human affairs today and divide the last fifty years into “cold war” (post-WWII until the fall of the Berlin Wall) and “globalization”(1989 to present) is very simplistic. The face-off between the U.S. and the U.S.S.R. was not the only defining large-scale thing happening in the last 50 years. The exodus of American corporations overseas post-WWII, the proliferation of communication technology and electronic media post-WWII, and the civil rights movement were also extremely important trends of the last half-century.
The global markets are financial centers set up by corporations and governments to fundraise. The purchase of stocks (or bonds, or swaps, or futures, or whatever else) essentially lends money to a corporation or government, who in turn try to use that money to make more money before they (hopefully) give more money back to the stockholder. People come together to make money.
The Lexus and the olive tree are “actually pretty good symbols of this post-Cold War era,” says Mr. Friedman. He writes of a tension between modernization and the ancient forces of culture, geography, tradition, and community. He says,
Olive trees represent everything that roots us, anchors us, identifies us and locates us in this world – whether it be belonging to a family, a community, a tribe, a nation, a religion, or, most of all, a place called homeï¿½we fight so intensely at times over our olive trees because, at their best, they provide the feelings of self-esteem and belonging that are as essential for human survival as food in the belly. Indeed, one reason the nation-state will never disappear, even if it does weaken, is because it is the ultimate olive tree – the ultimate statement of whom we belong to – linguistically, geographically, and historically.
The attachment to one’s olive trees, when taken to excess, lead us into forging identities, bonds, and communities based on the exclusion of others. And when these obsessions really run amok, as with the Nazis in Germany, or the murderous Aum Shinrikyo cult in Japan or the Serbs in Yugoslavia, they lead to the extermination of others.
He characterizes conflicts between the Serbs and Muslims, Jews and Palestinians, and the Hutus and Tutsis in Rwanda as fights over who owns which olive tree. He refers to India’s nuclear testing program and English soccer hooligans as “olive tree”, Yugoslavia under Milosevic as an “olive-tree-hugging nationalist regime,” and messages posted by hackers on the NY Times website as a “high-tech olive-tree language of their own.”
The olive tree is a powerful symbol of the foundation of western civilization. It was and is a staple crop of the Greeks and Romans. It represents a life sustaining connection to the earth. We come from the earth, as does our food, our shelter, and our clothes. This is not a symbol, but a fact. Those we share food with and our connection to the earth; these are the foundation, the root from which “civilization” exists.
It is imperative to understand this phenomenon, its influences in our lives and in the broad sweep of human affairs. It is closely related to our desire for security, convenience; in our greed, our competitiveness, our profit seeking, and in empire. It is imperative to know our history to see and sort out this tangled web of dependency we find ourselves in.
I think that globalization is not just a rerun of colonialism. People who argue that have got it wrong. It is more complex than that. Look around. As a result of globalization, there are elements of culture from the dominated peoples that are now penetrating the north. The favorite food of Brits eating out is not fish and chips today, but curry. It is no longer even exotic for them. But I am not just talking about curry. Even at the level of ideas there is a certain degree of interest in different religions now. So while you have this dominant force [Americanization], you also have a subordinate flow the other wayï¿½there are opportunities now for others to state their case through the Internet. Iran is highly linked to the Internet. They see it as a tool they can use to get their point of view across. In Malaysia, Mahathir now gets some coverage [all over the world] through CNN. The campaign for banning land mines was launched through the Internet. This is what globalization does for marginalized groups. To argue that it is a one-way street is not right and we must recognize its complexity. People operate at different levels. At one level they can be angry about injustices being done to their society from Americanization and then talk about it over McDonald’s with their kids who are studying in the states.
This is an unfair world. Many of us have struggled hard and even shed blood in order to become independent. When borders come down and the world becomes a single entity, independence can become meaningless.)
First of all, how many poor people ($1/day poor) in Southeast Asia have kids studying in the U.S.? 0, that’s zero.
Globalization came out of the past just as surely as you and I came out of our mothers. It is just part of the continuing evolution of humanity. Its roots are found in the ebb and flow of war, tool making, farming, city-states, nations and empires; from mutual survival to mutual gratification. European colonialism starting around the 15th century is a huge part of this legacy.
Mr. Friedman describes free-market capitalism as the dominant system of today’s global economy:
The driving idea behind globalization is free-market capitalism ï¿½ the more you let market forces rule and the more you open your economy to free trade and competition, the more efficient and flourishing your economy will be. Globalization means the spread of free-market capitalism to virtually every country in the world. Therefore, globalization also has its own set of rules ï¿½ rules that revolve around opening, deregulating, and privatizing your economy, in order to make it more competitive and attractive to foreign investment.
It has been said that the golden rule of capitalism is that the person with the gold makes the rule. Not far off the dictionary definition:
The possession of capital or wealth; a system in which private capital or wealth is used in the production or distribution of goods; the dominance of private owners of capital and of production for profit.
democratization of technology
democratization of finance
democratization of information
First of all, the term democratization is a misnomer here. Democracy is a government by the people. Let’s examine:
The twin facts that international investors own a country’s foreign debt, and that the government is being run like a business to retain and attract more international investment (making it essentially beholden to foreign capital), put this country at an extreme distance from anything resembling a democracy.
All the innovations and advances in microchip technology, telecommunication, digitization, the Internet, and satellite broadcasting, in the hands of profiteers, do not make or allow for democracy.
And of course, not everyone wants to play. For a variety of reasons, some countries refuse to enter the game, or are having a hard time entering it. Mr. Friedman refers back to the cold war, and describes the situation: “free-market democrats vs. free-market kleptocrats.” He says,
Kleptocracy is when many or all of the key functions of the state system ï¿½ from tax collection to customs to privatization to regulation ï¿½ have become so infected by corruption that legal transactions become the exception rather than the normï¿½Kleptocracy is the billions of dollars that have been made in corrupt privatization programs throughout Eastern Europe and Russia, where tiny oligarchical elites, often in cahoots with local mafia and government officials, have managed to gain control of the formerly state-owned factories and natural resources at below-market rates, making them overnight billionaires.
He goes on to blast these “robber barons,” and says that at least the American robber barons invested in American stocks and real estate, whereas the Russians also invest in America, impoverishing their own country. Come on. The ruthlessness and greed exhibited by American industrialists of the 19th and 20th centuries are a textbook study of corruption and oppression. John Jay Chapman said it well:
It was inevitable that the enormous masses of wealth, springing out of new conditions and requiring new laws, should strive to control the legislation and the administration which touched them at every pointï¿½nothing can blind us to the fact that the methods by which they were obtained were subversive of free government.
Mr. Friedman rates economies from “communist operating system DosCapital 0.0” up through to DosCapital 6.0 (U.S., Hong Kong, Taiwan and Great Britain), and provides a formula for countries to be more effective in the global economy with his metaphor of the “golden straitjacket, the defining political-economic garment of the globalization era.” He ticks off a list of the economic characteristics of this straitjacket: eliminating/lowering tariffs, privatizing state-owned utilities and industries, opening banking and telecommunications systems to private ownership, removing foreign investment restrictions, and opening industry and stock & bond markets to direct foreign ownership. Mr. Friedman ominously tells the world, “If your country has not been fitted for (a straitjacket), it will be soon.”
Mr. Friedman says, “I like to compare countries to the parts of a computer”; the hardware, the operating system, and the software. He vaguely defines hardware as “the basic shell around your economy,” and says that throughout the cold war there were three kinds of hardware in the world: free-market capitalist, communist, and hybrid hardware that combined the first two. The operating system is the broad macro-economic policy of the country, and the software is the legal and regulatory systems of the country.
Mr. Friedman backs out of this obvious discrepancy by claiming that “if there is a common denominator running through this book, it is the notion that globalization is everything and it’s opposite.”(italics his) Look. The state of human affairs today is not a notion. It is. It is a fact, independent of our beliefs and theories and predictions about it. And it is a fact that this vast pool of capital spearheaded by transnational corporations does not build the foundations of democracy in developing countries, much less as an indirect side effect of the intent to profit in these countries. It is a fact that the digital divide is further widening already huge income gaps.
oppression by the unregulated capitalists, who move their manufacturing from country to country, constantly in search of those who will work for the lowest wages and lowest standardsï¿½These workers need practical helpï¿½For years, U.S. manufacturers have used their clout in Congress to block any attempt to impose U.S. working standards on their factories abroad.
He goes on to say that
The AOL subsidiary in the Philippines paid its college-educated workers in 1999 about $5.50 a dayï¿½which is 34% more than the (Filipino) minimum wage, but roughly what an unskilled American worker would make in an hour. This is a meager wage, but it is a first step to bringing a whole new generation of educated Filipinos into the fast worldï¿½
Exploitation is not the first step to equality.
Mr. Friedman advances many possible solutions:
Working with transnational corporations to show them how they can be “both green and profitable at the same time” by improving their public and consumer relations through upgrading environmental practices and labor standards; “being green, being global, and being greedy can go hand in hand.”
Microlending ($100-1000 with no collateral) to women making $1/day to buy a sewing machine, a bike to take vegetables to market, or a cell phone to rent out to other poor villagers.
Developing technology that will help to preserve the environment and slow the rate of wilderness destruction
Using the Internet to inform and mobilize people worldwide against corporate exploitation of people and resources.
Yet, he says,
While all these filters for protecting culture and environment make sense in theory, you need them all working at once to have any hope of making an impact. The rain forest park alone will never pay enough to eliminate all logging; beaurocrats alone will never have enough political will to apply all environmental laws; green corporations alone will never be enough to slow the pace of degradation; Internet activism alone will never be enough to restrain the Electronic Herd.
He goes on,
America has had two hundred years to invent, regenerate and calibrate the balances that keep markets free without becoming monsters. We have the tools to make a difference. We have the responsibility to make a difference. And we have a huge interest in making a difference. Managing globalization is a role from which America dare not shrink. It is our overarching national interest today, and the political party that understands that first, the one that comes up with the most coherent, credible and imaginative platform for pursuing it, is the party that will own the real bridge to the future.
This is nonsensical. Mr. Friedman has already expounded on why politicians do not and cannot affect significant change within this capitalist system. And lets get it straight: markets aren’t monsters. However, the people participating in and controlling these markets certainly can be.
Can globalization create the biggest solution of all? Is there anything about globalization, and the rise of the internet and other modern technologies, that can make a difference for those at the bottom of the barrel ï¿½ the 1.3 billion people still living on one dollar a day?
the enhanced ability of activists and individuals (through communication technologies) to make a difference
telecommunications industry estimates, which predict that by 2005, 1 billion low cost portable internet connections will be deployed in the world, and 3 billion by 2010
He also cites the standardization of accounting, legal, and regulatory systems in the poor countries in order to attract foreign investment
It is critically important to understand this situation before even beginning to talk about solutions. We see our profiteering, our greed, our desire to be superior, and many times our job contributing to suffering. It is critically important for each individual one of us, especially in wealthy countries, to understand this parasitical nature in ourselves, this web of dependency, and to personally balance this technological capacity we’ve inherited with self-sufficiency.
I listened politely to (the former prime minister’s) remarksï¿½and then decided to respond in a deliberately provocative manner, in hopes of bursting through his fixed mind-set. I said roughly the following (with my profanities edited out): ‘Mr. Prime Minister, you spoke of globalization as just another conspiracy to keep you down. Well, I have to tell you something ï¿½ its much worse than you think. Much worse. You see, you think we are back there in Washington thinking about you and plotting how to keep you down, and turning all the dials and pulling on the levers to do just that. I wish we were. God, I wish we were. Because I like you, and I would turn the dials the other way to let you up. But the truth is, we aren’t thinking about you at all! Not for a second. We don’t give a flying petunia about you. And it’s not out of malice. It’s because we’re trapped under the same pressures you are, and we’re trying to keep one step ahead of the competition just like you are, and we’re worried about what the bond market is going to do next, just like you are. So I wish I could confirm for you that there is a conspiracy to keep you down, but I can’tï¿½Now if you want to build an Islamic bridge to this globalization train, build an Islamic bridge. If you want to build a Maoist bridge to this train, build a Maoist bridge. If you want to build a Jeffersonian bridge to this train, build a Jeffersonian bridge. But promise me one thing ï¿½ that you will build a bridge. Because this train will leave without you.’
He mixes his metaphors, and it gets worse. He says,
To be a French-educated Arab intellectual is the worst combination possible for understanding globalization. It is like being twice handicapped, since both of these cultures are intuitively hostile to the whole phenomenon.
On a trip to Egypt to promote the Arab edition of this book, Friedman was struck, after a week of discussing both the costs and benefits of globalization, how most Egyptians, including many intellectuals, could see only the costs. The more I explained globalization, the more they expressed unease about it. It eventually struck me that I was encountering what anthropologists call “systematic misunderstanding.” Systematic misunderstanding arises when your framework and the other person’s framework are so fundamentally different that it cannot be corrected by providing more information.
He met several times with the editor of an Egyptian journal, who expressed “strong reservations about Egypt joining the globalization system.” The editor told him that the U.S. should slow down the train so that Egypt could jump on, and Mr. Friedman told him, “I wish we could slow the globalization train down, but there’s no one at the controls.”
That’s us. We Americans are the apostles of the Fast World, the enemies of tradition, the prophets of the free market and the high priests of high tech. We want “enlargement” of both our values and our Pizza Huts. We want the world to follow our lead and become democratic, capitalistic, with a Web site in every pot, a Pepsi on every lip, Microsoft windows in every computer and most of all ï¿½most of all- with everyone, everywhere, pumping their own gas.
(The pumping gas is a reference to a metaphor for America’s powerhouse economy as compared to the rest of the world. I don’t know what he means by “Web site in every pot.”)
Not surprisingly, as I traveled around, I found that not only the Iranians were calling America “the capital of global arrogance,” but, behind our backs, so, too, were the French, the Malaysians, the Russians, the Canadians, the Chinese, the Indians, the Pakistanis, the Egyptians, the Japanese, the Mexicans, the South Koreans, the Germans ï¿½ and just about everyone else.
Mr. Friedman tells of a stop he made for coffee at an Internet cafe in Jordan. Apparently the banana cream pie at this cafï¿½ was made by the wife of the Israeli ambassador, which prompted a boycott of the cafï¿½. He refers to the boycotters as “anti-Israeli-made banana cream pie fundamentalists,” and is very flippant about a conflict he claims to understand.
One of the best/worst parts of this book is Mr. Friedman’s basketball analysis. He says of Joe Kleine (of the ’97 Chicago Bulls):
Sitting on the same bench with Jordan in his final season ï¿½ sitting in fact just eleven places away from him ï¿½ was someone whose shooting skills were only marginally less effective than his, whose jump shot was only slightly less accurate, someone whose free-throw shooting was only slightly less consistent, someone whose defensive skills were only slightly less intense.
With all respect to Joe, come on. Mr. Friedman wants to compare salaries (Jordan’s $80 mil/year including endorsements vs. Kleine’s league minimum), but let’s not forget that Jordan’s wealth is a side effect of being the greatest basketball player of all time. Scoring titles, defensive player of the years, MVPs, NBA championships; the man made incredible, incredible players look like chumps daily. To say that Joe Kleine is slightly less talented than Jordan is to not understand basketball.
France and Russia today are the Gary Paytons of geopolitics ï¿½ the biggest trash talkers in the world, always trying to make up for their weaknesses by giving everyone a lot of lip, particularly Uncle Sam.
Mr. Friedman says that America’s “concept of citizenship is based on allegiance to an idea, not a tribe.” People would not clamor to immigrate to the “land of the free” if, in fact, America didn’t offer the personal freedom, the opportunities, and an unsurpassed level of comfort and convenience to its residents. That America enjoys the highest standard of comfort and convenience is not an idea; it is a fact. Allegiance to an idea is a cult.
ï¿½let me share a little secret I’ve learnedï¿½With all due respect to the revolutionary theorists, the “wretched of the earth” want to go to Disney World ï¿½ not the barricades. They want the Magic Kingdom, not Les Miserables. And if you construct an economic and political environment that gives them half a sense that with hard work and sacrifice they will get to Disney World and enjoy the Magic Kingdom, most of them will stick with the game ï¿½ for far, far longer than you would ever suspect.
Sounds like the bar is getting lower: from the afterlife to Disney World.
He advances a plan for sustainable globalization:
Proceed “slowly and humbly”
Reinforce “safety nets” of Social Security, Medicare, welfare, etc.
Develop a new social bargain between workers, financiers, and governments that embraces free markets but also benefits as many people as possible:
a government-supported venture capital fund to low- and moderate-income neighborhoods
stipends for workers displaced by trade or new technology
public works employment for displaced workers
tax breaks for severance pay for displaced workers
free governmental resume consultation for displaced workers
extended health insurance for displaced workers
expansion of government job training centers and services
a campaign to inform people of the Lifelong-Learning Tax Credit (enables people to write off the cost of an education or training program up to $1000
increase in funding for the International Labor Organization to find alternatives to child labor in developing countries
increase in U.S. lending to Asian, African, and Latin American development banks to
promote the training of women
microlend to women and small business
clean up the environment in every developing country with which America has significant trade
Democratize every political system
developed countries (& IMF) focus on strengthening infrastructure of “bad-borrowing” countries by
encouraging budget-cutting, interest rate and currency adjustments to attract foreign investment
rewriting laws to promote foreign ownership of industry
standardizing legal, regulatory practices, especially accounting; he illustrates how developing countries and industry are being shaped by international money. The competition for this money requires adoption of rigorous accounting, tax and legal standards and a weeding out of corruption to make investors feel secure.
transform the IMF to “maintain minimum social safety nets and provide public works jobs to soak up some of the unemployed (of poor countries)”
Insure a stable power structure ï¿½ Mr. Friedman says that the generation of wealth through trade, financial integration, the internet, and other technology “is happening in a world stabilized by a benign superpower,” and adds, “The hidden hand of the market will never work without the hidden fist.”
a) The most immediate threat today to “the United States and the stability of the new systemï¿½(is) super-empowered angry men.” He says, “There will always be a hard core of Ramzi Yousefs. The only defense is to isolate that hard core from the much-larger society around them.”
Pay U.N. dues ï¿½ Mr. Friedman says that this advances U.S. interests without putting U.S. lives on the line
Bring together an internal (U.S.) coalition (software writers, activists, farmers, assembly line workers) to support globalization
Develop an “activist and generous” U.S. foreign policy
Okay. First the obvious points:
The U.S. does not pay its U.N. dues
He talks about a bargain between workers, financiers, and governmentsï¿½but that is the last time he mentions financiers.
A benign superpower? That defends capitalist interest to the exclusion of international cooperation?
Isolate the hard core? This is exactly what the U.S. is doing, at home and abroad. An ignorant and dangerous route, and in direct contradiction to his “activist and generous” foreign policy.
His decision to add a section on God for the paperback edition is, um, weird. By popular demand! New and improved! He talks about raising children in this rapidly changing world (“kids often lack the judgment microchip”) and whether or not God is in cyberspace (“He wants to be”). He quotes Israeli religious philosopher David Hartman, saying that cyberspace is the world that the biblical prophets spoke of, “a place where all mankind can be unified and totally free.” This is as big a pile of garbage as I’ve ever laid eyes on.
Balancing a Lexus with an olive tree is something every society has to work on every day. It is also what America, at its best, is all about. America at its best takes the needs of markets, individuals and communities utterly seriously. And that is why, America, at its best, is not just a country. It’s a spiritual value and a role modelï¿½A healthy global society is one that can balance the Lexus and the olive tree all the time, and there is no better model for this on earth than America.
Pure fiction. Responding to this book is difficult. At times it seems like a practical joke or a strange dream.
But the truth will always be stranger.
Padraic Rohan was raised in the San Francisco Bay Area. He has taught elementary school and started an outdoor adventure not-for-profit organization.