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The Lexus and the Olive Tree: Understanding Globalization
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Customer Reviews
Rating:  - Pseudo-Economics and Market Fundamentalism
I read part of this book for a Globalization class I was taking, plus a few chapters from a different book "Globalization and Its Discontents" by Joseph Stiglitz. I initially liked what I read from Friedman. It seemed positive and interesting in comparison to Stiglitz (which focused on IMF economic policies and was VERY angry). However, upon reading the whole Stiglitz book and then going back to Friedman, I found Friedman to be poorly educated in economics and a waste of my time. It is indeed a cheerleader book for Globalization and has so many holes in it you can drive a car through.
Friedman is a market fundamentalist with an agenda, which becomes very clear after reading a REAL book on economics. He embraces this "golden straightjacket" (or restrictions that globalization puts on an economy) as inevitable and advocates a rapid transition to free-market systems with abandonment of old systems. He also favors excessive deregulation of the economy and wants government to completely relinquish control. The success of this strategy isn't backed by any evidence. It's only Friedman's theory. For instance, he goes into great detail about the hardships that this golden straitjacket puts on government, the population and all the entrenched interests... but never proves with evidence that the countries that put it on are better off than countries that don't. The fact is, countries DON'T have to follow this golden straitjacket model. Southeast Asia in particular... with all the "crony" capitalism that Friedman complains lingered on for decades, was successful before the 1997 market crisis specifically because of this crony capitalism. They didn't follow the IMF, Wall Street, and the electronic herd who were all clamoring for them to immediately open up their markets and push down barriers and completely eliminate government interference in the economy. They kept those barriers up, built up their own businesses and industries, and when those industries were ready to compete in the global market, they slowly reduced trade barriers and integrated themselves into the global economy. This is the correct way to approach globalization, not the stupid way Friedman and the IMF and Wall Street lobbyists advocate (ensuring US companies dominate ALL competition in the developing world).
I'll give another example of why Friedman is wrong. Look at Russia. Russia's transition from communism to capitalism was guided by the IMF and the US Treasury Department. It was one of the most radical transformations of an economy in the history of mankind and under Friedman's theory, it should have been an enormous success because "the quicker you adopt the golden straitjacket, the better". WRONG. They transitioned to free markets so quick that it was devoid of competition. There was no regulatory structure to compete fairly. Banks didn't operate well. Businesses were sold to well-connected, corrupt bureaucrats for next to nothing (who proceeded to strip the businesses of their assets and put most of the profits in foreign bank accounts). Corrupt government leaders shared in these profits at the expense of the state's wealth. The leaders further raided funds by taking out massive loans from international banks, the IMF and the US government at high interest rates and diverted much of the money into their bank accounts. Inflation ran wild for awhile and many people lost their life savings and retirement as a result. Exchange rates were kept artificially high which prevented exports. Crime and mafia control spread everywhere. People in abject poverty become commonplace (from ~2% of the population living under $2 a day under communism....... to after the market failure ~25% of the population under $2 a day and ~40% of the population under $4 a day. GDP per Capita went DOWN so people were poorer with capitalism than they were under communism). It was altogether complete chaos and an economic disaster.
Compare this with China, who also moved from Communism to Capitalism but they started in the 70's and they did it much slower and much more carefully. Through protectionist barriers, they built up their own industries, significantly reduced poverty, became a major world economy and provided many of the amenities that first world economies have. While they aren't completely free-market yet, they are doing it very well and completely ignoring Thomas Friedman's "Golden Straitjacket".
With that said, there are some good things about Thomas Friedman's book. First off, he explains a very popular... but failed... ideology very well. There is significant support for it in IMF, Wall Street and the Treasury Department and its important to understand. Secondly, he explains Capital Markets (or what he calls "short horned cattle") far better than my other book does. Capital Markets, or investment in currency, is a hard concept to understand and Friedman makes a very good effort at explaining it.
Rating:  - Heavy
Had some good ideas but pretty heavy reading. Not for the short attention span person.
Rating: - Heavyhanded, Not Recommended
This is the first book I've read on the hot topic of globalization and I think it's fair to say I was disappointed, especially considering how popular this book is. What is most odd about this book is that it does not feel like it was written by a journalist at all: it rarely relies on facts or scenarios that actually happened. Much of the book contains dialogues (mostly among world leaders) that Friedman invented for literary effect. He also goes overboard on inventing his own terminology for the subject. But what is most annoying while reading the book is that while you would expect a book on globalization to be nuanced and subtle, Friedman comes off as arrogant and heavy-handed in his treatment of the subject. It occurred to me many times while reading the book that being a globetrotting journalist did not qualify Friedman to be the quasi-theorist that he thinks he is. Revealing, this book has aged very poorly, very quickly. Most of the companies he praises (Enron and Compaq for instance) have either gone completely defunct or been bought out by other companies. As if to further underscore his shallow understanding of the subject, his Golden Arches Theory was disproven soon after the publication of his book. Friedman is not without his insights but I imagine there must be much better books out there on the subject.
Rating:  - Didn't bother finishing
If you have a short attention span, then this book is not for you. I thought being a newspaper person would have made Friedman concise and to the point, but Friedman spends so much time talking about things that are not directly related to the point that I gave up on this book. I may have cheated myself (I thought the same of Ayn Rand but did make it through Atlas Shrugged which is one of my favorites.) but I don't have the time for his wanderings.
Rating:  - The Lexus and the Olive Tree
This book provides a very good understanding of globilisation by integrating various issues and concepts with critical, illustrative and at times poignant examples. This helps appreciate what globilisation means currently and the historical summary helps explain how we got to where we are today. Consequently we are better able to forecast trends and determine meaningful business and social strategies that will enhance our lifestyles. It is an easy, informative and enjoyable read.
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