El Lexus Y El Oilvo

FIRST ANCHOR BOOKS EDITION, APRIL 2000
Foreword to the Anchor Edition
Welcome to the paperback edition of The Lexus and the Olive Tree. Readers of the
original hardback version of the book will notice that several things have changed in this
new version. But what has not changed is the core thesis of this book: that globalization
is not simply a trend or a fad but is, rather, aninternational system. It is the system that
has now replaced the old Cold War system, and, like that Cold War system, globalization
has its own rules and logic that today directly or indirectly influence the politics,
environment, geopolitics and economics of virtually every country in the world.
So what has changed? I have reorganized the early chapters to make my core thesis a
little easier for thereader to identify and digest, and I have used the year since the book
was originally published in April 1999 to gather more evidence and to update and expand
the book with all the technological and market innovations that are enhancing
globalization even further. I have also re-examined some of the more controversial subtheses
of this book. One is my Golden Arches Theory-that no two countriesthat both
have McDonald's have ever fought a war against each other since they each got their
McDonald's. I feel the underlying logic of that theory is stronger than ever, and I have
responded to those who have challenged it in the wake of the Kosovo war. Another
change is that the chapter originally entitled "Buy Taiwan, Hold Italy, Sell France" is
now broken into two parts. The new chapter,called "Shapers, Adapters and Other New
Ways of Thinking About Power," builds on a question I raised in the first edition: if
economic power in the globalization system was first based on PCs per household in a
country, and then on degree of Internet bandwidth per person in a country, what comes
next? This chapter tries to answer that question by looking at evolving new ways of
measuringeconomic power in the globalization era. Finally, I have tried to answer some
of the most oft-asked questions I got from readers of the first edition: "Now that you have
described this new system, how do I prepare my kids for it?" and "Is God in
cyberspace?"-which is another way of saying, "Where do moral values fit in?"
The new world order is evolving so fast that sometimes I wish this were anelectronic
book that I could just update every day. My more realistic hope is that when the day
comes years from now when this book can no longer reside on the Current Affairs shelf
in bookstores, it will find a comfortable home in the History section - remembered among
the books that caught the start, and helped to first define, the new system of globalization
that is now upon us.
Thomas L.Friedman Bethesda, Md.
January 2000
Opening Scene: The World Is Ten Years Old
It's aggravating - we have nothing to do with Russia or Asia. We're just a little
domestic business trying to grow, but we're being prevented because of the way those
governments run their countries.
- Douglas Hanson, CEO of Rocky Mountain Internet, Inc., speaking to The Wall Street
Journal after the 1998 marketmeltdown forced him to postpone a $175 million junk
bond issue.
On the morning of December 8,1997, the government of Thailand announced that it was
closing 56 of the country's 58 top finance houses. Almost overnight, these private banks
had been bankrupted by the crash of the Thai currency, the baht. The finance houses had
borrowed heavily in U.S. dollars and lent those dollars out to Thaibusinesses for the
building of hotels, office blocks, luxury apartments and factories. The finance houses all
thought they were safe because the Thai government was committed to keeping the Thai
baht at a fixed rate against the dollar. But when the government failed to do so, in the
wake of massive global speculation against the baht-triggered by a dawning awareness
that the Thai economy was not...