One Economy, Ready or Not: Thomas Friedman's Jaunt Through Globalization

At a time when terms like "global glut" and "commodity-price deflation" are on the tip of every tongue, competent economic journalism may be the one commodity still in short supply. All too often, journalists are assigned to the economics desk even if their only experience lies in domestic politics or foreign policy. The top journalism schools claim to be turning out graduates literate in economics, but a semester or two of instruction is hardly adequate for grasping the complexity of modern markets. For their part, economists writing for a broad audience tend to get bogged down in technicalities and lose sight of the big picture.

Thomas L. Friedman is the exception. With a background in foreign affairs, two Pulitzer Prizes, and a National Book Award-winning book on the Middle East under his belt, he redefined the "Foreign Affairs" column of The New York Times by covering the intersection of economics and foreign policy. "Sure, I'm honored to be asked to serve as foreign affairs columnist for The Times," we can imagine him saying upon being given the beat. "But what exactly am I supposed to write about? For my predecessors, the answer was the Cold War. If it mattered for the Cold War, it mattered for their readers, and their task was to explain how and why. Now that the Cold War is history, everything is fair game. What is my technique for finding order in this chaotic world?"

The metastory, Friedman quickly came to see, was globalization. It may now be obvious that historians will look back on the 1990s as the decade of globalization, but this was less than apparent, even to "informed opinion," only a few years ago. Friedman's columns have done much to transform this state of affairs. Through strategic use of the anecdote and the medium of the travelogue, he has brought home the sweeping impact of globalization on the most remote corners of the world. If it's Monday, Friedman must be in Albania; if it's Tuesday, he must be in Zambia. One envies his frequent flyer account and his battery life.

Although there is nothing startling about the author's theme of the impact of global markets on the post-Cold War world, it is hard to think of another book that succeeds so fully in drawing out the implications. Francis Fukuyama's The End of History and the Last Man identified liberalism as the foundational ideology of the post-Cold War age and market capitalism as its economic superstructure but failed to imagine the world they would create. Daniel Yergin and Joseph Stanislaw's The Commanding Heights emphasized the challenge of global markets for the state but did not anticipate the scope for instability in the transition from statist to market-led economics. Samuel Huntington's The Clash of Civilizations and the Remaking of World Order saw the end of the Cold War as heralding renewed ethnic and religious conflict but failed to appreciate economic interdependence as a stabilizing counterforce. The book closest to Friedman's may be William Greider's One World, Ready or Not -- whose title Friedman should have seized had his timing been better. But unlike Greider, Friedman gets the economics right. His book is a wellspring of economic common sense that will inoculate its readers against the "globaloney" so prevalent in popular discussions of the subject. One can only hope that, despite its ungainly title, The Lexus and the Olive Tree attracts the audience it deserves.1

HOOKING UP

For Friedman, globalization is inevitable and irreversible; the forward march of technology makes it so. Governments can no longer control the flow of information now that the cell phone and satellite television have come to the most remote Indonesian village. Day-to-day economic decisions can no longer be decreed from above by corporate CEOs, much less government planning ministers, now that markets mutate with frightening speed. Finance can no longer be dominated by "white-shoe" commercial banks now that anyone can be a day trader. Capital can no longer be bottled up within borders now that billions of dollars can be moved with the click of a key. And in an age when instantaneous communications let U.S. software companies outsource product development to India, participation in global markets affords the world's poorer countries more opportunities than ever before.

None of this, Friedman says, implies that the nation-state and its distinctive social values are about to wither away. States will still continue to respond to globalization in different ways, and how they respond will determine their economic success or failure. Whether they capitalize on globalization's opportunities will depend on whether they succeed in attracting international investors, dubbed by Friedman the "Electronic Herd." And whether countries attract investors will depend in turn on their willingness to don the "Golden Straitjacket": privatizing enterprises, balancing budgets, lowering tariffs, removing restrictions on foreign investment, and eliminating subsidies for state-owned firms. At a deeper level, states' success in courting the Herd and capitalizing on globalization will depend on whether they install the institutional prerequisites for reliably functioning markets -- internationally recognized auditing and accounting standards, strong financial market regulation, clear shareholder rights, and equitable bankruptcy procedures -- in effect, whether they succeed in replacing cronyism with a culture of transparency. For all his talk about distinctive national cultures and differing responses, Friedman sees the embrace of globalization as the only route toward economic growth.