Lexus and the Olive Tree

Lexus and the Olive Tree Thomas Friedman's the Lexus and the Olive Tree examines the emergence of new actors and institutions in the global geopolitical and economic landscape bringing about the demise of the centrally planned Cold-War system, heralding the new international order under the rubric of globalization. Along with this new international system is the transformation of how individuals, institutions, and even nation-states relate with one another.

He contends that the new system challenges culture, identity and tradition as people are put to the task of re-evaluating how they can respond to the processes of global integration in social, political, and economic spheres.

In this second edition of the book, Friedman revisits his Golden Arches Theory and introduces a new chapter entitled, "Shapers, Adapters and Other New Ways of Thinking About Power," where the author explores "new ways of measuring economic power and potential" under globalization, which is basically through the competitive advantage of skills and domestic policies that adhere to what the international demands.

The 1997 Asian financial crisis that reverberated in Russia, Latin American and, eventually in the United States (U.S.) was a key flashpoint in the 21st century, which demonstrated how intergrated the global economy has become. Under a seamless, "very greased, interconnected" milieu, the crisis stressed the fluidity of the movement of capital, as well as the triumph of individual mobility over the "fists of the state," which exercised control cross-border movement of people during the Cold War era.

Friedman uses the crisis as an apt background to build his case for globalization and characterizing the crisis as growth pains that nation-states had to grapple with in the midst of the negative consequences of the emerging global system. He maintains that globalization is not an entirely new phenomenon in the history of the world. What makes the current era novel, he argues, is the greater degree and intensity of interconnectedness whether technologically or politically as illustrated by the advancement in information and communications technology, and political reconfiguration.

The great dispersion of business operations across the globe under an integrated and unified organizational systems and processes likewise underpins economic integration. The book is an attempt to make sense of the post-Cold War era departing from the lenses of post-Cold War scholars such as Francis Fukuyama, Paul Kennedy, Robert Kaplan, and Samuel Huntington. Friedman contends that globalization is the era where American political power, culture, currency, and military power dominate domestic and international relations (ix). With the U.S.

As the power among nation-states, the author identifies it as a key player among the three balances in the globalization system: nation-states and the U.S., nation-states and global markets, and nation-states and individuals (12). This is the key focus of the second chapter of the second edition, zeroing in on how the different contending forces of nation-states, communities, individuals, and the environment interact with the system.

The chapter elaborates on this new system of globalization by providing what can be considered as a typology of nation-states' macroeconomic systems, which is but a fitting introduction to provide context upon which the new system was built on. With the collapse of the wall representing the demise of the Cold War era, the shift of adherents from the communist, socialist, or any of what Friedman terms as the hybrid systems revealed one of the core issues that will hound the transition process: that of "premature globalization" (152-153).

He correctly points out the importance of readiness of internal or domestic policies to make transition economies competitive in the globalized, free-market world. While Friedman may have provided a plausible explanation as to why the rush to join the globalization bandwagon, he, however, fails to explain the politics behind such policy actions of nation-states. That the more powerful, developed nation-states which have more resources at their disposal to turn international economic policies that influence domestic macroeconomic policies to their favor is lost in the author's discussion.

He is keen to caution that caution is utmost necessary for governments to take into consideration not so much as whether to globalize but how nation-states undertake the transition process to respond accordingly to the vagaries of globalization (163). The author makes a clear case emphasizing the importance of the role of government in the era of globalization, which appears to be a very strong position for a free-market advocate. The elements of an effective state in the age of globalization are characterized by transparency, efficiency, and a lean bureaucracy (159).

But while the author acknowledges the crucial role of government in providing an economic environment that satisfies the appetite of Friedman's so called "herd" for "stability, predictability, transparency" and to "protect its private property" (172), he does not conceal his belief in the predominance of the power of the herd and the Supermarket to dictate the rules of the game in this era of globalization.

In what he calls the process of "globalution," the Herd and the Supermarkets can impose changes in domestic policies that do not conform to international standards, changes which local political powers are not able to instigate. With such power, the author aptly recognizes that the nebulous "the Electronic Herd and the Supermarkets are fast becoming two of the most intimidating, coercive, intrusive forces in the world today" (169) all in the name of democratization.

While these faceless power brokers are seen to introduce values such as transparency to curb corruption, the main assumption is that apart from their profit objectives, the Herd is value-free and is not subject to the wiles of human.