The Lexus and the Olive Tree by Thomas Friedman

Many of you have read / are reading Thomas Friedman's best-seller, The World is Flat, which is a good book but I believe the basic foundations of this book ar built on his previous book on globalization, The Lexus and the Olive Tree. I thought I'd post a review I did of this work that I did a couple years ago for a class I took from Ray Bakke.

In 1999 I was in New York City at an international conference on the Internet. Futurists and technologist had gathered together for five days of exhibits, plenary sessions and breakouts to hear from those who were giving a glimpse of the future. John Chambers, CEO of Cisco, had the opening session and in his plenary remarks related the following story:

“A friend of mine was sitting in an Internet café in Beijing checking his email. Outside he noticed that a couple of Chinese women were huddled under the awning of the café to get out of the rain. On an unfolded mat was an array of mushrooms they had picked from the hinterland and were now trying to sell to passersby. My friend engaged them in conversation and explained to them how they could sell their mushrooms over the Internet. It seemed rather foolish but he spent the next hour building them a website and by the end of the day they had their first order from a Chinese restaurant in Germany. They Fed-Exed their first shipment and low and behold, they were an international business.”

Welcome to globalization—two Chinese peasant farmers from rural China selling mushrooms to a restaurant in Germany. This is the essence of NY Times writer Thomas Friedman’s 479-page essay on globalization—The Lexus and the Olive Tree, wherein the Lexus represents bourgeoning technology and the olive tree represents traditional culture. Friedman’s thesis is that in the post Cold-War world, “the One Big Thing” people should focus on is globalization as the worldwide shaping force—the defining international system of the future.[1] Whereas civilization thus far could be characterized by “walls” and who is in charge, globalization is built around the single word “web” where Friedman asserts no one is quite in charge.[2] Defined by Friedman, globalization is
“the ..integration of markets, nation-states and technologies…in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper and cheaper than ever before, and in a way that is enabling the world to reach into individuals, corporations and nation-states farther, faster, deeper, cheaper than ever before.”[3]

It’s “defining technologies” are computerization, miniaturization, digitization, satellite communications, fiber optics and the Internet…”[4] In a nutshell the essence of globalization is that the world has become a marketplace, no longer divided by political ideologies and strength of military power but by speed to market. Market forces prevail over politics. All political “friends” and “enemies” have been reduced to “competitors.”[5] Power is now measured by connectivity to the Web and by the number of cell phones, not the number of nuclear warheads. Anyone that thinks otherwise is wrong…they just don’t know it yet!
Friedman concludes that there is a precarious balance between the Lexus and the olive tree and that the task of each society is to recognize, appreciate and preserve them both. Beepers should never take the place of conversation. A cyberpal should never replace a friendship of a neighborhood pal. To go forward is to take the best from what the Lexus and olive tree represent.
Analysis
I suppose if I wanted a description of the world today, to understand the forces that shape our world, The Lexus and the Olive Tree would be a good place to start. Friedman uses an engaging style and peppers the book with personal illustrations from his global travel of the past several years to explain our emerging world. The Lexus and the Olive Tree is a convincing study in how the world works today. It is a world where individuals can influence the masses and the influence of the masses can touch an individual. It is a world of paradoxes—of cell phones next to oxcarts, but it is the cell phones, not the oxcarts, that will be the predominant influence in this world. It is a world of irony where the technologies that were developed to build “walls” between nation-states (ARPAnet, global spy satellites, etc) are now the very things that have torn and will tear down existing walls between nations and no nation will be beyond its reach. It’s a world where a Moody’s Investor Services can control the economic fate of any country without discrimination simply by adjusting the credit rating of that country. It’s a world where the stock of one American company (Microsoft) has more value than all “emerging-market stock markets in all the rest of the world put together.”[6]
The world we now live in is a world where companies rather than countries have the dominant proliferating presence in the world. One can travel from Beijing to Bankok to Bangalore to Berlin to Bangor and there you will find McDonalds, Kentucky Fried Chicken, Pizza Hut and Microsoft. Whereas, as in 19th century England, the sun never set on their empire, the same can be said today of Disney, the NBA, Toyota, Seimons, or Eriksson. And the oddest thing about it is that no one thinks it strange that this is so. It’s a world where social consciousness and economic viability are one in the same because the world market forces this reality. The world, not only is changing, but has already changed.
Friedman puts forth a convincing argument that globalization, like the sunrise, is inevitable. The three revolutions that have begun an irreversible trend, Friedman asserts, are the democratization of communication, finance and information as access to all three have become snowballs rolling downhill. We can never go back. For its upside and downside, whether one likes it or not, globalization will not go away.
Friedman proposes that the world today is controlled by the “Electronic Herd” –the mass of anonymous traders and investors who reward and punish countries as companies for their wise or foolish decisions, for their corrupt or sound practices—both economic and political. So corrupt countries like Russia or inept countries like France both get hammered while countries like Ireland and the US are rewarded. “Live by it’s (the Electronic Herd’s) rules or run alone and live by your own rules but accept the fact that you are going to have less access to capital, less access to technology and ultimately a lower standard of living for your people.”[7] Globalization is what makes Sadaam and bin Laden so angry. They have lost the global war and they know it but maybe don’t know why. This is the reality of globalization.
Friedman concludes with an “ideal country” scenario, cobbling together the ideal location, demographics, economic and political influences to position a country that would enable one to be “rationally exuberant” about the future of that country. That ideal country, of course, is the United States. It is clear that Friedman believes in value of globalization and the strength and position of the US.
There are real issues that are surfacing with globalization. Lumberjacks in Washington or Brazil are now under international scrutiny as they seek to make a living off the ecosystem we all share. When a global corporation moves into a community, often the wealth that is produced in a community is being siphoned out of that community or a country. So when I stay at a Radisson Hotel in Riga instead of a local hotel, a good chunk of my payment goes to Radisson Inc. The same thing holds true when I eat at McDonald’s or Burger King in a community. Presently, corporations pay workers far less in Bangladesh than in Dallas. But, Friedman points out, no one would ever say that these same Bangladesh workers were better off in the world of pre-globalization. In the film documentary Life and Debt, Stephanie Black tells the story of McDonalds coming to Kingston, Jamaica in 1995 and suing a local restaurant already possessing the name McDonalds that sold curried goat and jerk chicken. It is bullying tactics like this that will continue to be a black eye to the concept of globalization. Since globalization favors the entrepreneur, many of the “slow turtles” will be left behind and nations that are moving forward must take this into account and provide a “safety net” for these people. But the norm should be a nation where speed and change are normative and rewarded. Another twist to all of this is that although there are those who oppose globalization in principle, it is ironic that they are forced to use the enabling technologies (e-mail, cell phones, Websites) of globalization to make their views known and protest against globalization.
Reaction
This is a great book for understanding globalization. I realize that globalization is what I have been experiencing for the past several years although this is not the term I have used to describe this phenomenon. For example, in 1999 I was in Tehran, Iran for the World Wrestling Championships. Between bouts I went up to the pressroom, logged onto the Internet and instantly checked the score of the University of Colorado / Colorado State game played the previous day. And although I realized that the government opened up the Internet for this international event, the Pandora’s box of information and communication has been opened and it will be impossible to close it. In Tehran there will only be more and more access to communication. The recent re-election of the Ayatola Mohammad Khotami against a hard-line radical is the people’s way of expressing that they want to be part of the global village where their national “brand” is respected and valued. As expressed in a late July, 2002 interview condemning the U.S.’s sword rattling against Iraq, Khotami said, “The actions of one nation affect all nations.” He is recognizing globalization.
In November of 2001 I was in the geographic (but certainly not cultural or technological) center of India, the city of Nagpur. Yet, in this remote city, across the street from our humble hotel was an Internet café where I could daily check my email so that when I returned to the states I was completely caught up with my digital communication. And it was rare when the place wasn’t packed. Even as I write this while on vacation on the coast of Spain, my daughter is at an Internet café to check the results of her boyfriend’s state playoff baseball game. Things that are commonplace today would have been impossible just ten years ago.
In June of this year I was preaching in a Russian-speaking church in Riga Latvia. Present that morning were Russians, Latvians, Ukrainians and Texans (a youth group that had come to do summer missions). The world had come to Riga.
This past summer my oldest son was in China with nine other American students taking language classes at one of the universities. Every morning they would buy breakfast from entrepreneurial street vendors before the police came and drove them off or roughed them up for engaging in non-government sanctioned free enterprise. But once they have tasted the fruits of free enterprise, can they ever go back to Communism? Little wonder that these vendors return each morning. With the Olympic games coming to Beijing in 2008, China has no option other than to join in the flow towards globalization. Last week I read in the paper that the Chinese government is cleaning up auto emissions and polluting factories and planting trees in Beijing in preparation for the world coming to the Olympics. They want to be recognized as a favorable “brand.” As my son engaged in conversation about important issues with his Chinese friends their common response was, “We in China believe…” or “We in China think….” But Andy and his American friends would challenge them with, “But what do you think?” My son confirms Friedman’s observation that China is becoming democratized and will have a free press even though their leaders don’t know it yet.
Friedman has been a real mentor to me in understanding globalization. Up until now, I had heard the term but somehow linked it too closely to the World Trade Organization and the annual protests at their international summits. I see also that globalization has a healthy life force of its own and although a snapshot of how it is working today is not ideal, the principles that drive globalization are for the most part positive and will bring about greater freedoms—economic, political and perhaps spiritual as the flow of information and communication becomes even more widespread.
[1] P.xxi
[2] P. 8
[3] P. 9
[4] P. 9
[5] P. 12
[6] P. 125
[7] P. 168