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Thomas Friedman, Lexus and the Olive Tree (1999)Thomas Friedman, Lexus and the Olive Tree (1999)


American New York Times  journalist and expert on globalization (pictured right), terrorism and climate change.


See also...

Thomas Friedman in the Management Gurus section. 


Book summary

Thomas Friedman, Lexus and the Olive Tree (1999)


Global society should...

Balance the:

  • Lexus (the wealth creating global economy).
  • Olive tree (preserving the identity of individuals, communities and countries).


Characteristics of this globalized world

 Thomas Friedman, Lexus and the Olive Tree (1999)

1. Democratization of technology, finance and information

Computers and the Internet give worldwide access to knowledge and information that can be used economically and politically.

Global financial markets and institutions (the “Economic Herd”) can

  • trigger global economic crises.
  • finance economic expansion based on economic and political reforms (“globalution”).


2. Microchip Immune Deficiency (MIDS)

Countries must find a cure to this fatal disease of resisting new information technology (see point 1). Global competitiveness depends on new technology, knowledge, creativity and learning.

 Thomas Friedman, Lexus and the Olive Tree (1999)

3. The Golden Straitjacket

After the failure of communism, countries are prepared to:

  • accept the “golden straitjacket” of a free market economy.
  • expose themselves to global competition, economic change and innovation.

So Joseph Schumpeter’s idea of creative destruction is vital.

 Thomas Friedman, Lexus and the Olive Tree (1999)

4. Inequality and political opposition

Globalization may be unpopular because it:

  • increases the gap between the rich and the poor within and between countries.
  • threatens people’s cultural identity.


5. Superpower USA

The USA can thrive in a globalized world because of itsThomas Friedman, Lexus and the Olive Tree (1999):

  • language (English is spoken globally).
  • geographical location
  • democracy and political stability.
  • global corporations.
  • innovation, creativity and freedom of information.

But America can’t be complacent because of:

  • increasing global competition.
  • international terrorism in an interconnected, politically unstable world.

 Thomas Friedman, Lexus and the Olive Tree (1999)

6. Environmental problems

Globalization increases prosperity, so leading to:

  • higher consumption.


7. Peace

Globalization can improve international relations through:Thomas Friedman, Lexus and the Olive Tree (1999)

  • trade.
  • economic interdependence.
  • worldwide Americanization.

“There are no enemies only competitors”, says Friedman.

The “Golden Arches Theory of Conflict Prevention” states that two countries will never fight each other, if they both have McDonald’s restaurants.

 Thomas Friedman, Lexus and the Olive Tree (1999)

8. Balance between the trapeze, trampoline and safety net

A balance has to be struck between the:

  • trapeze (allowing people to take risks and become entrepreneurs)
  • trampoline (new skills and lifelong learning)
  • safety net (welfare payments and health care for the poorly educated losers from globalization).


Key quotes on globalization

A healthy global society is one that can balance the Lexus and the olive tree all the time.

If globalization were a sport, it would be the 100-metre dash, over and over and over. And no matter how many times you win, you have to race again the next day.

The driving idea behind globalization is free-market capitalism.

In the era of globalization knowledge is the key to economic growth.


Key quote on education and training

In an age when technological change is so rapid, and the walls around companies and countries so small, only new skills and lifelong learning can ensure job security.


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