The Lexus and the Olive Tree by Thomas Friedman

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The Lexus and the Olive Tree written by Thomas Friedman is not important because it simply refutes the long held belief that globalization is a temporary side affect to the machinations of American foreign policy interests, but because Friedman takes it one step further by claiming it is a totally new world system which has completely replaced the old Cold War system. Even the title of his book is representative of this idea. The Lexus and the Olive tree represent "symbols of the post-Cold War era: half the world seemed to be emerging from the Cold War intent on building a better Lexus, dedicated to modernizing, streamlining and privatizing their economies in order to thrive in the system of globalization. And half of the world-sometimes half of the same country, sometimes half of the same person-was still caught up in the fight over who owns which olive tree. The Olive trees represent what roots us, anchors us, identifies us and locates us in the world." According to Friedman, the trick to being successful in the global market is finding a balance between the Lexus and the Olive Tree. However, on the other side of the coin, any conflict between these two forces can cause a terrible backlash.

The concept of the post cold war era being dramatically different is important because it shows just how much global economics (globalization) has shaped the political outcome of the world we now live in. Politics are no longer the driving force of change, it is now economics. Politics have become less and less important, economics, the free market, are now the catalyst for social change and political initiative: both good and bad. Friedman is quoted as saying that globalization "is the inevitable integration of markets, nation-states and technologies to a degree never witnessed before – in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper and cheaper than ever before and in a way that is enabling the world to reach into individuals, corporations and nation-states farther, faster, and deeper, cheaper than ever before." It is the idea of conforming to globalization that Friedman continues on to his next important idea, the "golden straitjacket."

Friedman's concept of the "golden straitjacket" is important because, as Friedman says in his own words, "to fit in the golden straitjacket a country must either adopt, or be seen as moving toward, the following golden rules: making the private sector the primary engine of its economic growth, maintaining a low rate of inflation and price stability, shrinking the size of its state bureaucracy, maintaining as close to a balanced budget as possible, if not a surplus, eliminating and lowering tariffs on goods, removing restrictions on foreign investment, getting rid of quotas and domestic monopolies, increasing exports, privatizing state owned industries and utilities, deregulating capital markets, making currencies convertible, opening its industries, stock, and bond markets to direct foreign ownership and investment, deregulating its economy to promote as much domestic competition as possible, eliminating government corruption, subsidies and kickbacks as much as possible, opening banking and telecommunications systems to private ownership and competition, and allowing its citizens to choose from an array of competing pension options and foreign run pension and mutual funds. When you stitch all of these pieces together, you have the golden straitjacket." In order to achieve this kind of integration, Friedman says that we must, as countries, put on our "golden straitjacket" and conform to globalization, not expecting globalization to conform to us. It is that mistake which can keep countries from joining the rest of the integrated and fully functioning "global marketplace." It also explains why the United States is the most successful, because, frankly, we have always been able to adapt, once we know how our...
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