Society is now global. I have money invested in the Australian Securities Exchange, I watch soccer live-streamed from Europe, and I buy my sneakers direct from China.
Ever since the end of the Cold War (and the fall of the Berlin Wall in 1989) a new era of globalization has been brought upon us, riding into the arena on the horses of free market capitalism, global technological connectedness, and democratization. When the world was dominated by the two superpowers, the United States and the Soviet Union, it was a world defined by walls and missiles. But, since the fall of the Soviet Union (and also Maoist China), “when it comes to the question of which system today is the most effective at generating rising standards of living, the historical debate is over,” Friedman writes: “The answer is free-market capitalism.”
Basically, America won the Cold War, their main weapon being superior ideas. Communism failed because it is a top down system where those at the top dictate the shape and function of society for everyone else at the bottom. Capitalism succeeded because it empowers the individuals at the bottom to determine their own path in life, allowing people to choose “what to eat, what to wear, where to live, where to travel, how to work, what to read, what to write and what to learn.” While capitalism does have its drawbacks, it is an inherently democratic system that the United States has made its main export, in addition to its cuisine, fashion, music, movies, assorted cultural ideas (freedom of speech, for example) and more around the globe. Today, there is a McDonald’s in nearly every country on the planet.
The new system we inhabit today is defined by connectedness. The internet gives anyone and everyone with a modem the ability to connect to anyone and everyone else. When you open a business that has a website, “wherever you are in the world, you will have to think globally—in terms of both who you competitors might be and who your costumers might be.” A daunting thought indeed, but a task with tremendous upside if the positives can be harnessed and exploited. Coupled with this, options for investment are also global. The global financial market is driven by what Friedman calls the ‘Electronic Herd.’ This herd consists of anybody with an internet connection, whether they be individuals, corporations, or nation-states, and their desire to invest their money in other individuals, corporations, or nation-states. Being able to send money all around the world from a computer anywhere else in the world is so novel that most people don’t even know they can invest in Mongolian cashmere if they want to. (Fun fact: it is estimated that over 90% of the money in the world is non-physical, meaning that it exists as numbers on a computer.) This book was first published in 1999, but there is a very prophetic paragraph in Friedman’s conclusion where he predicted that “Global financial crises will be the norm in this coming era. With the speed of change going on today, and with so many countries in different stages of adjustment to this new globalization system, crisis will be endemic.” It took the United States over 200 years, with many faults and failures along the way, to figure out the best systems of operation for a capitalistic economy (and there are still many flaws). Now, we are prodding the rest of the world to catch up, and to do so in a fraction of the time. Expecting a formerly communist nation to put on a capitalistic hat without time to develop social safety nets and a Securities and Exchange Commission and to jump head first into the global market is downright crazy. The ride will inevitably be bumpy for some and downright catastrophic for others.
As the walls have come crumbling down, both literally and figuratively, the world has been forced to ‘open up’ and either embrace the free market and democratization or be left in the dust. The sad reality is that those who resist are dragged along anyways (think poor countries in Africa or culturally different places in the Middle East.) “We have moved from a world where the big eat the small to a world where the fast eat the slow,” remarked Klaus Schwab, Executive Chairman of the World Economic Forum, and he is right. Apple coming out with a new iPhone every year is a great micro-example. But while those of us in the first world have either grown up in it or are easily adaptable, the rest of the world is not. One of the biggest differences between the ‘West’ and the ‘East’ is that in the West, we value individualism as our highest ideal. Older cultures, such as those in China, Japan, and most Middle Eastern countries value the community and what is best for the group over the necessities of the individual. You can see how it would be harder for someone in Cairo to adopt a capitalistic and democratic way of thinking, verses someone from Canada or Germany. It requires the citizen from Cairo to adopt an entirely different culture, one that is being forced upon them. But adapt they must, or they will be left behind in the dirt while the rest of the world enriches itself.
This book is called the Lexus and the Olive tree because those two things are metaphorical representations of the divide between the globalized industrial economic future (the Lexus) and the rooted traditions of community and culture (the olive tree.) “The challenges in this era of globalization—for countries and individuals—is to find a healthy balance between preserving a sense of identity, home and community and doing what it takes to survive within the globalization system.” Being able to enjoy aspects of other cultures, ie. going to a McDonald’s in Tokyo or ordering curry in London, is a wonderful delight for many people to be able to experience without having to buy a plane ticket to the United States or India. Where the balance tips too far to one side, however, is when a culture eradicates another, as American culture has done many times over throughout the world. Part of the reason for the rise in terrorist attacks throughout the western world in the past two decades is due to the backlash against our exported ideas and customs, which some people in other cultures find destructive to their own. In his book, Friedman states that the onus is on us, and he is right. We, the United States, introduced this system to the world, and it us our job to help everyone adjust to it as best we can. Yes, we here in the United States are quite literally the leaders of the free world, but freedom comes with tremendous responsibility and we must not shy away from the task. The fate of the world rests in our hands.
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