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Extremely Loud and Incredibly Close by Jonathan Safran Foer
DATING DIAPERS AND DENIAL
YOU CAN WIN
Ready for Anything: 52 Productivity Principles for Work & Life
The No A****** Rule: Building a Civilized Workplace and Surviving One That Isn't
Go Put Your Strengths to Work: 6 Powerful Steps to Achieve Outstanding Performance
Winning: The Answers - Confronting 74 of the Toughest Questions in Business Today
Know How: The 8 skills that separate people who perform from those who don't
Made To Stick: Why Some Ideas Survive and Others Die
Blink: The Power of Thinking without Thinking
The Five Dysfunctions of a Team: A Leadership Fable
The Power of Nice: How to Conquer the Business World with Kindness
iWoz: From Computer Geek to Cult Icon: How I Invented the Personal Computer, Co-Founded Apple, and Had Fun Doing It
An Inconvenient Truth
The Daily Show with Jon Stewart Presents America (The Book): A Citizen's Guide to Democracy Inaction
Tough Choices: A Memoir
A Hand to Guide Me
Secrets of the Millionaire Mind
Rich Dad, Poor Dad
Teacher man: A Memoir
Cat O'Nine Tales
Partners in crime
Marley and Me
Freakonomics
The World Is Flat
Screw it, let's do it
Phishing : Cutting the Identity Theft Line
Manager's Guide to the Sarbanes Oxley Act
Security and Usability
THE SEA
Great Age Guides
Seeing What's Next
Blue Ocean Strategy
Follow This Path
The GE Work-out: How to Implement GE's Revolutionary Method for Busting Bureaucracy and Attacking Organizational Problems-Fast!
Sack The CEO
Competing for the Future
The 80/20 Principle: The Secret to Success by Achieving More with Less
Bringing out the best in people
A Practical Guide to Easing Tension and Conquering Stress
Working relationships : The simple truth about getting along with friends and foes at work
101 Great Answers to the Toughest Interview Questions
Good to Great: Why Some Companies Make the Leap.. and Others Don't
Competitive Advantage (The profitability differentiator)
Competing for the Future (Blueprint for the future)
Digital Capital
Pipe Dreams (Greed, Ego and Death of Enron)
A Good Hard Kick in the Ass (New rules of business)
What the CEO Wants You to Know (Explicating the building blocks of business)
It's Not the Big that Eat the Small...It's the Fast that Eat the Slow (Reaffirms credo of Business@the speed of thought)
My Forbidden Face by Latifa (Tragedy of women in Taliban's reign of terror)
Big Brands Big Trouble (Jack Trout studies common mistakes of big brands)
No Logo (Crusade that announced death on the brand bullies)
My Pedagogic Creed (John Dewey's famous declaration concerning education)
Lexus and the Olive Tree (Anti-globalization is a search for the Sixties high)
A woman is made not born (Beauvoir's radical statement led to the second feminist movement)
Against Method(Outline of an anarchistic theory of science)
The Structure of Scientific Revolutions (A paradigmatic work that changed the history of science forever)
The Dilbert Future
(Scott Adams applies his trenchant wit to forecast life in 21st century)
Swimming Across
(Intel chairman Andy Grove's journey to freedom)
Dot Bomb (A juicy insider account of the cyber madness of the Nineties)
Jack: Straight from the Gut (The global industrial titan paints a word picture of his self)
Next: The Future Just Happened (A mordantly funny exploration of the brave new world spawned by the Internet)
The Anatomy of Buzz (A groundbreaking guide to creating word-of-mouth magic that cuts through skepticism and information overload of today's consumers)
Rebel Code (A high-velocity chronicle of the open-source transformation taking place in the tech world)
The Attention Economy (An engrossing account of the human bandwidth deficiency facing employees in the internet economy)
An Excerpt from "Second Coming of Steve Jobs" (A fascinating, complex potrait of Apple's tech magician)
IBM and the Holocaust
(A powerful expose of IBM's collusion with Nazi Germany)
An Extract from "Pride Before the Fall" (A book on Microsoft's antitrust case)
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The Lexus and the Olive Tree

The World is 10 Years Old

The Lexus and the Olive Tree
by Thomas L. Friedman
No of Pages:
Price:

From the Introduction, Opening Scene

f nothing else, the cycle from Asoke Street to my street and from Amazon.country to Amazon.com served to educate me and many others about the state of the world today. The slow, stable, chopped-up Cold War system that had dominated international affairs since 1945 had been firmly replaced by a new, very greased, interconnected system called globalization. We are all one river. If we didn't fully understand that in 1989, when the Berlin Wall came down, we sure understood it a decade later. Indeed, on October 11, 1998, at the height of the global economic crisis, Merrill Lynch ran full-page ads in major newspapers through America to drive this point home. The ads read

The World Is 10 Years Old

It was born when the Wall fell in 1989. It's no surprise that the world's youngest economy--the global economy--is still finding its bearings. The intricate checks and balances that stabilize economies are only incorporated with time. Many world markets are only recently freed, governed for the first time by the emotions of the people rather than the fists of the state. From where we sit, none of this diminishes the promise offered a decade ago by the demise of the walled-off world ... The spread of free markets and democracy around the world is permitting more people everywhere to turn their phpirations into achievements. And technology, properly harnessed and liberally distributed, has the power to erase not just geographical borders but also human ones. It seems to us that, for a 10-year-old, the world continues to hold great promise. In the meantime, no one ever said growing up was easy.

Actually, the Merrill Lynch ad would have been a little more correct to say that this era of Globalization is ten years old. Because from the mid-1800s to the late 1900s the world experienced a similar era of globalization. If you compared the volumes of trade and capital flows across borders, relative to GNPs, and the flow of labor across borders, relative to populations, the period of globalization preceding World War I was quite similar to the one we are living through today. Great Britain, which was then the dominant global power, was a huge investor in emerging markets, and fat cats in England, Europe and America were often buffeted by financial crises, triggered by something that happened in Argentine railroad bonds, Latvian government bonds or German government bonds. There were no currency controls, so no sooner was the transatlantic cable connected in 1866 than banking and financial crises in New York were quickly being transmitted to London or Paris. I was on a panel once with John Monks, the head of the British Trades Union Council, the AFI, CIO of Britain, who remarked that the agenda for the TUCs first Congress in Manchester, England, in 1868, listed among the items that needed to be discussed: "The need to deal with competition from the Asian colonies" and "The need to match the educational and training standards of the United States and Germany." In those days, people also migrated more than we remember, and, other than in wartime, countries did not require passports for travel before 1914. All those immigrants who flooded America's shores came without visas. When you put all of these factors together, along with the inventions of the steamship, telegraph, railroad and eventually telephone, it is safe to say that this first era of globalization before World War I shrank the world from a size "large" to a size "medium."

This first era of globalization and global finance capitalism was broken apart by the successive hammer blows of World War I, the Russian Revolution and the Great Depression, which combined to fracture the world both physically and ideologically. The formally divided world that emerged after World War II was then frozen in place by the Cold War. The Cold War was also an international system. It lasted roughly from 1945 to 1989, when, with the fall of the Berlin Wall, it was replaced by another system: the new era of globalization we are now in. Call it "Globalization Round II." It turns out that the roughly seventy-five-year period from the start of World War I to the end of the Cold War was just a long time-out between one era of globalization and another.

While there are a lot of similarities in kind between the previous era of globalization and the one we are now in, what is new today is the degree and intensity with which the world is being tied together into a single globalized marketplace. What is also new is the sheer number of people and countries able to partake of this process and be affected by it. The pre-1914 era of globalization, may have been intense, but many developing countries in that era were left out of it. The pre-1914 era may have been large in scale relative to its time, but it was minuscule in absolute terms compared to today. Daily foreign exchange trading in 1900 was measured in the millions of dollars. It was $820 billion a day, according to the New York Federal Reserve, and by April 1998 it was up to $1.5 trillion a day and still rising. In the last decade alone total cross-border lending by banks around the world has doubled. Around 1900 private capital flows from developed countries to developing ones could be measured in the hundreds of millions of dollars and relatively few countries were involved. According to the IMF, in 1997 alone, private capital flows from the developed world to all emerging markets totaled $215 billion. This new era of globalization, compared to the one before World War I, is turbocharged.

But today's era of globalization is not only different in degree; in some very important ways it is also different in kind. As The Economist once noted, the previous era of globalization was built around failing transportation costs. Thanks to the invention of the railroad, the steamship and the automobile, people could get to a lot more places faster and cheaper and they could trade with a lot more places faster and cheaper. Today's era of globalization is built around falling telecommunications costs--thanks to microchips, satellites, fiber optics and the Internet. These new technologies are able to weave the world together even tighter. These technologies mean that developing countries don't just have to trade their raw materials to the West and get finished products in return; they mean that developing countries can become big-time producers as well. These technologies also allow companies to locate different parts of their production, research and marketing in different countries, but still tie them together through computers and teleconferencing as though they were in one place. Also, thanks to the combination of computers and cheap telecommunications, people can now offer and trade services globally--from medical advice to software writing to data processing--that could never really be traded before. And why not? According to The Economist, a three-minute call (in 1996 dollars) between New York and London cost $300 in 1930. Today it is almost free through the Internet.

But what also makes this era of globalization unique is not just the fact that these technologies are making it possible for traditional nation-states and corporations to reach farther, faster, cheaper and deeper around the world than ever before. It is the fact that it is allowing individuals to do so. I was reminded of this point one day in the summer of 1998 when my then seventy-nine-year-old mother, Margaret Friedman, who lives in Minneapolis, called me sounding very upset. "What's wrong, Mom?' I asked. "Well," she said, "I've been playing bridge on the Internet with three Frenchmen and they keep speaking French to each other and I can't understand them." When I chuckled at the thought of my cardshark mom playing bridge with three Frenchmen on the Net, she took a little umbrage. "Don't laugh" she said, "I was playing bridge with someone in Siberia the other day."

To all those who say that this era of globalization is no different from the previous one, I would simply ask: Was your great-grandmother playing bridge with Frenchmen on the Internet in 1900? I don't think so. There are some things about this era of globalization that we've seen before, and some things that we've never seen before and some things that are so new we don't even understand them yet. For all these reasons, I would, sum up the differences between the two eras of globalization this way: If the first era of globalization shrank the world from a size "large" to a size "medium," this era of globalization is shrinking the world from a size "medium" to a size "small."

This book is an effort to explain how this new era of globalization came the dominant international system at the end of the twentieth century--replacing the Cold War system--and to examine how it now shapes virtually everyone's domestic politics and international relations.


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© 1999-2000 Thomas Friedman

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