The Lexus and the Olive Tree
Understanding Globalization

Financially, Citizens, and countries are no longer islands into themselves. With the advent of globalization, the computer, and in particular the internet, people can easily invest not only in foreign corporations but also in the bonds and other papers of the foreign countries themselves. As a result, what happens in the economies of foreign countries can rapidly affect the investors of countries halfway across the world. This has been the case for only ten years, and the reason why Friedman says its whole new ball game and that --- “the world is only ten years old”.

The cold war no longer is a dominating system for understanding foreign affairs. We are now in a new international system Friedman calls “globalization”. The Cold war was characterized by division; now it’s characterized by integration, integration made possible by rapid-speed airplanes, cheap international telephone charges, satellite communication and more than ever, the computer and the internet. We now have an entirely new set of financial understandings to achieve. What used to be true is no longer necessarily true.

As a result of information Arbitrage, we can no longer think like specialists, because what’s going on in this new world requires us to think rapidly and multi-dimensionally. We can no longer, for example, think only like financiers; we must understand policies, because what happens politically in one country can affect finances in another. How? Why? Because, we can invest in corporations and countries other than the U.S., for the same reason, we can no longer look at the weather patterns in just here in the U.S.; what happens with the weather in a foreign country might affect that country - markets in which we may have invested.

Friedman uses the Lexus as a symbol of “the drive for sustenance, improvement, prosperity and modernization- as it is played out in today’s globalization system. The Lexus represents all the burgeoning global markets, financial institutions and computer technologies with which we pursue higher living standards today.” (32, 33)

In addition, the author described the Olive tree as “Olive trees are important. They 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 home. Olive trees are what give us the warmth of a family, the joy of individuality, the intimacy of personal rituals, the depth of private relationships, as well as the confidence and security to reach out and encounter other. We fight so intensely at times over our olive trees because, at their best, they provide feelings of self –esteem and belonging that are essential for human survival as food in the belly. For that, you must be a part of, and rooted in an Olive grove.” (31)

The Lexus exploiting the olive tree can doom the olive tree, doom the environment and traditions. But if one can focuses too much on the olive tree, thus dooming the country to continuing the human condition. There needs to be balance between the Lexus and the Olive tree. The author presented an excellent example of the Lexus and the olive tree in balance as “An example of the Lexus and olive tree forces in balance was the Gulf Air flight I took from Bahrain to London, on which the television monitor on my Business Class seat included a channel which, using a global positioning satellite (GPS) linked into the airplane’s antenna, showed passengers exactly where the plane was in relation to the Muslim holy city of Mecca at all times. The screen displays a diagram of the aircraft with a white dot that moved around the diagram as the plane changed directions. This enabled Muslim passengers, who are enjoined to pray five times a day facing toward Mecca, to always know which way to face inside the plane when unrolled their prayer rugs. During the flight, I saw several passengers near me wedge into the galley to perform their prayer rituals, and thanks to the GPS system, they knew just which way to aim.” (40)

The walls of past thinking that companies and counties could remain islands to themselves came tumbling down after the Berlin Wall fell. This made globalization possible. “What blew away all [those] walls were three fundamental changes—changes in how we communicate how we invest, and how we learn about the world.” (45) This as the author calls it is the democratization of technology as it is what is facilitating more people and more homes with technology to reach farther into more countries, faster and cheaper than ever before We even have the democratization of information. “Thanks to satellite dishes, the Internet and television we can now see through, hear through and look through almost every conceivable wall.” (61)

Microchip immune deficiency discussed in chapter five of the book is about the democratization of the technology to the slow moving world. Some parts of the world haven’t seen globalization yet because they live in a poverty, as Friedman mentioned that “ how can you talk about globalization being global when the vast majority of humanity still lives in villages without telephone and has never touched a computer or sent an email message?”(73) In fact globalization is global, and for those countries that haven’t yet experienced globalization is somewhat shaped or affected by globalization. And most of all they have to reconstruct what they have or else they will be hit by a disease the author described as Microchip Immune Deficiency Syndrome.
The Golden Straightjacket is all about the free market, and any country can join but it has its own rules. And to get the best out of the global economy, Friedman advises nations to adopt a one size-fits-all “Golden Straightjacket”. Any country that wants to join the golden straightjacket must prove that it is moving towards success and removing restrictions on foreign market and investment to balance public budgets, keeping wages low to minimize inflationary, regulating their own economy without corruption, and allow their products to be sold freely across the world, giving priority to export production and opening everything to foreign ownership. As Friedman said, “once your country puts on the Golden jacket, its political choices get reduced to Pepsi and coke.” (106). That is why most of the countries around the world have better economy now then the cold war system and more jobs are available to people than before.

With technology so advanced, globalization also advanced to a new level that people with computer and internet access can trade and sell their stocks online without leaving their homes. The electronic herd is also about taking your market to overseas, building your companies in different parts of the world where things will be cheaper and then sell the products here in America or in Europe where you can sell for more. These to two sides of the supermarket and the internet made the global investing very easy.

However, you can’t do anything without a good software and hardware. If you don’t a have a good software and hardware you have no good competition. In this new globalization system American hardware dominates the world. Most of the developing countries look to America for sources and new innovation. You have to have a reliable system and back up when things back fire and something goes wrong.

As a country makes progress towards development, reconstructs its government, and opens its borders and its doors for others, it grows economically and moves a step closer to the new system, which provides a higher standard of living for its people. In this new system a country or a company will benefit from other countries or companies if it is willing to share its resources, information and its goods. You cannot keep your information and resources a secret, you have to share what you have or you will stumble and struggle alone in this new system, “that’s why most open minded, tolerant, creative, and diverse societies will have the easiest time with globalization, which the most closed, rigid, uptight, self absorbed and traditional companies and countries, which are just not comfortable with openness, will struggle.” (227). and in sense it’s a win-win situation and that the world is not benefitting from one country, but everyone benefits.
You are attracting people from different parts of the world and companies to come to settle and work in your country, which in turn will help the economy and provide more jobs for your people. You are not only attracting companies, but you are making friends and allies to strengthen your defense capabilities as Friedman puts this way that “ we have moved from a world where everyone wants to go it alone—where the rugged individualist is the executive role model and the vertically integrated company that does it all is the corporate model – to a world where you can’t survive unless you have lots of allies, where the Churchillian alliance maker is the executive role model and the horizontally allied company is the corporate model.” (238)

With all the globalization, technology, free market and the openness, world nations have reached a point where they could avoid a conflict and a war. The wars have devastated so many people and destroyed many nations, and costs of rebuilding a county are incredible. Wars are affecting the world economy and the free trade. Friedman’s theory of conflict prevention talks about how two countries that the same McDonald’s have never fought a war and instead made allies with each other. As Friedman points out that “when government do things that make economic integration and a better lifestyle- symbolized by the presence of McDonald’s – less possible , people in developed countries simply tolerate it for as long as they did in the past. Which is why countries in the system, will now think three times before going to war and those that don’t, will pay three times the price.”(253)

In this system with the free trade and openness, enable people to integrate and view the world in a different prospective so that people could learn about others and experience different cultures.

As we have already seen or realized that in every event there is a powerful or a talented individual who will control and walk away with everything, that is how the world is in this system. If you are not strong enough economically and in military wise, you powers and capabilities are limited. As he explained in his book that “the phenomenon on “winner take all “- which refers to the fact that the winners in any field today can really cash in because they can sell into this massive global market place, while those who are just a little less talented, or not skilled at all are limited to selling just their local market and therefore tend to make a lot, lot less.” (308)

The backlashes is viewed as if globalization seems to be favoring the rich countries because the rich countries are getting richer and more advanced, whereas, the poor countries having difficult times caching up with the fast moving world. One of the other reasons of the backlash is that more and more in the undeveloped countries think that globalization is a threat to their traditional cultures and their religion.

Everyone wants a better life and a bright future, but things aren’t balanced in this system. Some people are not use to the changes globalization brought. That is why more and more people are suffering. This system is actually a process that takes time. As counties develop and grow they profit from globalization, as Mr. Friedman said that “and it is this: globalization emerges from below, from street level, from people’s very souls and from their deepest aspirations. Yes, globalization is the product of democratization of finance, technology and information. But what is driving all three of these is the basic human desire for a better life – a life with more freedom to choose how to prosper, what to eat, what to wear, where to live, where to travel , how to work, what to read, what to write, and what to learn.” (348)

Rational exuberance explains America’s position in globalization. America is not dependent on globalization, while most of the countries in the world are struggling to deal with globalization and its new faces. In reality, globalization is an Americanization that is why some people feel threatened by the Americanization. America has everything it needs; it is stronger and independent than ever before. And the unique thing about America is how diverse it is, it has people from all over the world. This is how Mr. Freidman explains what he calls a rational exuberance “if you look at globalization as the dominant international system today, and you look at the attributes that both companies and countries need to thrive in this system. You have to conclude that America has more assets and fewer liabilities in relation to this system than any other major country. This is what I call rational exuberance.” (368)

Furthermore, some countries will never be able to catch up with globalization, and how some major nations expect America to help them grow economically. Things have changed in this system and those who are not willing to change will face the consequences of this system. The countries Mr. Friedman mentioned in this chapter are those who are living in secrecy, and don’t want to share their information and culture, finally they are the countries that are having a difficult time keeping a stable economy , and have a tough time improving their living standards.

Works Cited:
Friedman, Thomas L. The Lexus and the Olive Tree. New York: Farrar, Straus & Giroux, 1999. Pg. 32, 33, 31, 368, 348, 308, 253, 238, 227, 106, 73, 61, 45, 40,