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The Lexus and the Olive Tree

June 5, 2016

I’ve been reading a book on globalization, The Lexus and the Olive Tree, by Thomas Friedman.  The terms in the title are both symbols.  The Lexus represents participation in the global market.  The Olive tree represents local culture and the concept of home.  He wrote this book in 1999, before the attack on the World Trade Centre of 2001, and before the recession of 2008.  He even mentions weapons of mass destruction in connection with Saddam Hussein, an accusation that we now know to be a sham.  Many things have changed since he wrote the book.

I started reading this book because I wanted to learn about globalization.  It quickly became clear to me that the author had drunk deeply of the neo-liberal coolaide.  That only caused me to become more critical in my reading.  Thomas Friedman does promote free-market capitalism, which imposes neo-liberal principles on all who participate.  He also promotes America as the leader in globalization.  That’s why others often see it as Americanization or Westernization.

Neo-liberalism is a package of political principles, all designed to minimize the role of government, and to enhance the role of corporations in the global marketplace.  The government’s budget must be balanced every year.  They must privatize government corporations and government services.  They must eliminate barriers to international trade by making trade agreements.  As well, they must reduce corporate taxes, reduce or eliminate wellfare systems, and bypass trade unions.  Do you see problems here already?

Any country that wants to participate in the global marketplace must accept all of these political principles in order to compete with countries that have already accepted them.  Friedman writes that all of the other political systems, such as a centrally planned economy, have failed, leaving free-market capitalism as the only one that’s never failed.  Of course, it did fail in 2008, but that was after the book was written.  I wonder what Friedman would say about that event.

To be fair, he does present alternatives to rampant capitalism.  These alternatives are generally not sufficient.  Some of them require activism.  Some require philantrophy.  Often he considers alternatives to be simply an obstacle to inevetable globalization.

I noticed a number of contradictions in the book.  He states that countries participating in globalization must have a social safety net in place.  He also mentions destroying the bloated wellfare system in Canada.  One of the political principles is to eliminate government interference in business.  Yet, he also states that governments must ensure that there is healthy competition between companies in a given market.  Perhaps these are not direct contradictions, but only suggest that a balance must be maintained.

My main objection to the form of globalization described in this book is that it’s fundamentally anti-democratic.  With a smaller role for government, voters lose power as well.  They’re replaced by investors, who vote with their money.  They’re replaced by customers who also vote with their money.  People who have no money are left out of this new system.

I agree that this is a new world, at least financially.  We can’t go back to the way things use to be.  Or, can we?  We certainly can go back, partially and selectively, through government regulation.  Only now, the regulations will have to apply to all countries that participate in globalization, not just one country.  We really need something that approximates a world government.  Leaving it up to international corporations is not going to work.  I’m confident that we will be able to retain the best of the new world along with solutions to some of the problems caused by this new world.


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