Lexus and the Olive Tree

Topics: Market economy, Capitalism, Cold War Pages: 6 (1817 words) Published: April 11, 2013
Lexus and the Olive Tree: The Analogy
The author is of the view that the functioning and conflicts of the world are determined by the need for ‘sustenance and sense of identity and community’, the origins of which can be traced back to the Genesis. The Lexus represents the ‘global markets, financial institutions and computer technologies with which we pursue higher living standards today’ and the Olive tree is symbolic of ‘whom we belong to – linguistically, geographically and historically’. The challenge and future of the new globalization system will depend on a delicate balance between the process of economic development and the preservation of individual, community and national identities. The Cold and the New

Freidman has interestingly presented what defined the ‘frozen’ Cold War era, equating it to sumo wrestling and what symbolizes the ‘dynamic’ globalization phenomenon, the ‘hundred metre sprint’. The Cold War saw walls dividing the world into ‘friends and enemies’ and a ‘hotline’ connecting the USA and former USSR - which controlled global power play. There was ‘regional cultural homogenization’ and ‘fear of annihilation from known enemies’. State power was estimated by ‘Einstein’s mass energy equation’ and Karl Marx and Keynes were the economists of the era. On the other hand, globalization is all about a web integrated world, urban lifestyles, fear of rapid change and latent causal factors being of paramount importance. Schumpter and Grove are the lead economists in this era of free market economies, promoting innovation. ‘There are no enemies, only competitors’. Power and change is determined by interactions between nation states, super power USA, electronic herds, super markets and super empowered individuals. Freidman explains Globalization

Freidman’s well researched writing is an engrossing blend of history, finance, trade, policy, diplomacy and technology- explained with anecdotes, events and conversations. The author has discussed the impacts and interlinking of major and minor events that have had global ramifications. To name a few : the fall of the Berlin wall; disintegration of former USSR; evolving role of finance and trade in international relations- the Mexican crisis, South East Asia’s financial crisis and its impact on global markets; technological developments that have led to the information age; increased Americanization; and the rise of super powered individuals. Concepts that form the framework of this work:

Six Dimensional Information Arbitrage
With great clarity the author has identified six dimensions to understand globalization and its impact. These are: Politics, Culture, National Security, Financial Markets, Empowering Technologies and Environment. •Democratization of Technology, Finance and Information

Freidman has extensively written on changing trends in technologies, information access and financial markets that constitute the core process of globalization. He writes that ‘democratization of technology happened as a result of pathbreaking innovations in 1980s involving computerization, miniaturization, compression technology, digitization, improvements in microchips’ topped by Berners Lee’s World Wide Web in 1990. The author is of the view that due to technological advancements ‘the potential of wealth creation becomes geographically dispersed, giving all kinds of previously disconnected people the chance to access and apply knowledge’. The author explains the democratization of the financial markets citing the example of the Mexican crisis of the 1980s. The US bailed Mexico out on the condition that economic reforms would be put in place and US backed bonds were sold to individuals and mutual and pension funds.. When Mexico faltered again in 1995, US asked for its oil reserves as collateral. Talking of information democratization, the author says that ‘no wall in the world is secure anymore’ and as a result governments can no longer misinform people, because information is...
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