International Political Economy Communication

Friedman’s Lexus and the Olive Tree is an interesting and a very thought provoking book. Friedman’s desire to accommodate the olive tree within his concept of globalization however, introduces a number of contradictions. Friedman’s advocacy of United States as a benevolent superpower has proved grossly incorrect in the years following the publication of the book. Technologically superior nations had been promoting globalization even before ‘Fast World’, ‘Slow World’ split described by Friedman

The poor countries of the world, even those who have joined the Fast World do not have the resources to “have a virtual seat on the New York Stock Exchange”. While the investors from rich countries are buying assets of the third world countries from corrupt government officials, at throwaway prices in the name of free market reforms. Globalization will widen the gap between the rich and poor countries. The strength and weaknesses of Friedman’s analysis are discussed below:

Strengths 1. His assertion that countries of the world will have to adapt themselves quickly to benefit from the changes brought by Internet and the electronic world 2. His recognition that even a free market economy will have to have trampolines and safety nets to protect those who need help in this age of globalization. Weaknesses •    Friedman’s assumption that resistance to globalization comes from a desire to hold on to traditions is not justified by the global observations.

Most of the countries who are not in favor of a Friedman favored free market based globalization are not counting the olive trees. The changes in these countries have included mass migration from villages to cities and a willingness of people to change to the ways of the industrialized world. These countries built up heavy debts because of attempt to industrialize in admittedly a corrupt governing system and now have to sell ‘national silver’ in the name of market reforms and privatization to companies of developed countries to pay off these debts.

People represented by olive tree do not yearn for the olive trees of tradition but often find that globalization is taking away their livelihood and not offering anything in return. •    Friedman shows his bias in his attempt to justify heavy subsidies to agricultural sector in European Union while he does not deem subsidies in countries like Kenya as correct. •    Friedman failed to examine the implications of his views on the rest of the world. The United States and Western countries urge to dominate is simply too strong, to support the democracy and individual freedom, Friedman considers necessary for success of globalization.

From an analysis of the Lexus and the Olive Tree, identify, from Friedman’s perspective, the costs and benefits that an individual country might experience from the globalization process. Which of these costs and benefits do you consider the most significant and why? Friedman acknowledges that countries, which will not be a part of electronic herd, will be left behind in poverty,  The electronic age competition, where countries and individuals are competing in a worldwide market will leave behind those who either do not join the electronic herd.

They (the turtles) will be run over by the herd, those who join the herd but cannot keep pace with the most competitive will be left aside like the ‘wounded gazelles’. The countries of the third world do not have the resources to join the Fast World. Even if they were to invest their resources, put themselves in ‘golden straight jackets’ and use correct ‘Doscapital 6. 0’, the technologically advanced countries will be in a better position to compete and leave the wounded gazelles behind licking their wounds and even deeper in debt as they will have to purchase the Fast World technology from technologically advanced countries.

The cost of Friedman’s version of globalization is only for the poor developing countries. Technologically advanced developed world is the beneficiary. Friedman’s analysis is more suited to the advanced countries that are not properly ‘webbed’ to build the necessary infrastructure to join the electronic herd. These countries can also be reasonably expected to protect their ‘olive trees’, the social welfare infrastructure to protect and help their countrymen to join the herd.

The developing countries will be the main sufferers, as they do not have the resources or competitiveness to keep up with the herd and the benevolent United States attempt to put the Golden Arches in countries worldwide is preventing establishment of ‘globalution’ that requires transparent government an end to systemic corruption. Introduction of the quaint terms in the book make the books interesting to read and realistic analogies help follow the book philosophy.

The concern for the olive tree has given Friedman’s free market philosophy a number of problems. Friedman admits that globalization will bring great prosperity to some people, widen the gap between rich and the poor and leave many very impoverished. This is what is happening in countries like Russia where corrupt collusion of some with the global partners created many overnight billionaires while the majority did not enjoy the benefit of privatization and globalization. The corrupt, undemocratic and poor countries will not be much different.

They will have to be happy to have their Golden Arches for fears of the benevolent fist and no real benefit to show for joining in globalization. Q3. In your own words, explain how Friedman uses TWO of the following concepts to better understand the impacts and effects of globalization. Either: The Electronic Herd Or: DOScapital Or: The Golden Straitjacket. How realistic are these analogies in describing what he sets out to illustrate? Friedman coins many terms to describe his views on globalization and its impact on the world and concerns relating to globalization.

He very ably emphasizes the importance of correct economic policies for benefiting from the worldwide economic reforms. In order to succeed in the modern competitive world the importance of golden straightjacket cannot be denied. He uses the term golden straightjacket to emphasize that sound economic policies, controlling expenditure, limiting or eliminating inflation are essential to attract foreign investment and also for developing the country’s economic on sound economic basis.

This is a very valid argument and is true even if a country cannot join the herd with a view to open competition. His term for having the infrastructure and a sound financial system DOScapital is also very relevant to his analogy of using computers and Internet for various aspect of globalization. Electronic herd with long and short horn cattle invading an economy creates an image of fear. The electronic herd of investors (shorthorn cattle) and multinationals (longhorn cattle) invading an economy gives the image of fear for the underdeveloped countries.

The moderately advanced and advanced countries can join the herd and go for the easy picking. All the resources starved developing countries can hope for is a seat at the virtual New York Stock Market with their ‘tuppence’. Q4. Consider in what ways Friedman’s views of globalization might be shaped (determined) by the fact he is an American. Friedman being an American is happy to give the control of the world to United States. He sees U. S. as essential for supplying stable power for sustainable globalization.

American power and her willingness to use that power against those who would threaten the system of globalization – from Iraq to North Korea seems to suggest that the globalization is an American agenda only and not the need of the world. “The hidden hand of the market will not work without a hidden fist. ” Friedman’s argument that the rest of the world should accept United States as the benign hegemon has not gone well with the rest of the world during the last few years. The assertion that “No two countries (in the author's travels) that both had McDonald's had fought a war against each other since each got its McDonald's (as of 1999).

”Friedman points to Israel, Saudi Arabia, Egypt, Lebanon and Jordan has also proved wrong as Israel attacked Lebanon only last year and the US attempts to put the Golden Arches in Iraq have also back fired and alienated most of the world including Europe. Jordan, Saudi Arabia and Egypt are not good example for democracies based on US values but examples of countries whose governments are unrepresentative and have accepted to take dictation from the ‘benign hegemon’, the United States.

Definitely, not a good example for Friedman’s case of globalization Globalization as Friedman sees it with dominance of United States with an American Fist on whoever disagrees with America is not a very pleasant feeling for the rest of the world. Globalization received a knock when a UAE based Middle Eastern company acquired a British owned company managing six American shipping ports. United States, which had allowed the British company to operate the ports, refused to let the UAE based company operate the ports (both UAE and UK have McDonalds!) suggesting that globalization is a one way street where the western countries can acquire developing countries assets and not the other way round.

Conclusions Internet revolution has brought huge advantages for the world; it has made the world a global village. Developing countries need time due to limitation of resources to join the Fast World. Opening up the economies to the threats of the electronic herd is a matter of policy for these countries and cannot be treated as an inevitable consequence of electronic revolution.

The herd needs to be welcomed but at the pace acceptable to developing countries. Even the developed countries of Western Europe and countries like Canada are concerned for protecting their ‘Olive trees’-the social protections for their population and are not willing to abandon the olive trees or let them be run over by the Lexus.

Reference

1. Thomas L. Friedman, (2000), The Lexus and the Olive Tree, Farrar, Strauss and Giroux, 469 pages, ISBN-10: 0374185522