THE LEXUS AND THE OLIVE TREE By Thomas Friedman (2000)

GLOBALIZATION Globalization consists of the flow of goods and services, capital, and people across national borders. Forces of Globalization consist of world-wide markets, financial institutions, computer technologies, instant communication, convenient travel, etc. Friedman calls this the “Lexus.” This force began in the 1980’s and has been picking up speed ever since.

The “Olive Tree” refers to the customs, religions, ways of life that keep a particular culture alive. Balancing the Lexus and the Olive Tree is difficult but essential. Examples: GPS and Islam; Kayapo Indians Globalization is sometimes seems as “Americanization.” (Islam vs. McWorld)

1989 B ERLIN W ALL F ALLS – C OLD W AR E NDS A N EW E CONOMIC E RA B EGINS Globalization encourages the growth of free trade. This comes about with the following: A strong private sector economy stable priceslow inflation Balanced budgetlow or no tariffs Eliminate government corruption Open to foreign investment Promote competition at home Privatize state-owned industries

N EW R ULES Countries which follow the previous guidelines grow fastest. International Accounting Standards have to be used for business to trust countries with their investments. “The Golden Arches Theory of Conflict Prevention”