Things We Understand About Globalization

What do we understand about globalization?

  • We really don’t want to get into the politics associated with globalization. We will leave that for others to debate.
     
  • Globalization is an emotional issue.
     
  • We have had the opportunity to see the emotion that globalization brings out in people. We were in Gothenburg, Sweden in June 2001, the week that President Bush arrived to a massive anti-globalization demonstration. We left town before the demonstration began but we did encounter people on the street who were recruiting others to attend the protest. Lots of emotion was involved.
     
  • Love it or hate it globalization has arrived.

    • “Globalization is not just some economic fad, and it is not just a passing trend. It is an international system—the dominant international system that replaced the Cold War system after the fall of the Berlin Wall. We need to understand it as such.” 1

  • If the Berlin Wall was the symbol of the Cold War the Internet is the symbol of globalization.

    • “The globalization system is also characterized by a single word: the Web. So in the broadest sense we have gone from a system built around division and walls to a system increasingly built around integration and webs. In the Cold Ware we reached for the “hotline,” which was a symbol that we were all divided but at least two people were in charge—the United States and the Soviet Union - and in the globalization system we reach for the Internet, which is a symbol that we are all increasingly connected and nobody is quite in charge.” 2

    We are children of the Internet. We worked in the communications sector for many years and in the United States the telephone companies were early adopters of the technology—in the early 1980’s. It wasn’t until the browser was developed that the Internet became a tool that could be easily used by all. That happened much later in the 1980’s.

    If it were not for the Internet we would not be capable of this odyssey. Because of the Web we are able to remain in constant contact with family, friends, banks, businesses—name it and we have access to it. We have one important rule. If you want to do business with us, we have to be able to do business with you via the Internet. The Internet is also impacting our social life as we meet people who send us e-mail because they saw the web site name on the bikes.

  • We like Friedman’s definition of globalization.

    • “The globalization system, unlike the Cold War system, is not frozen, but a dynamic ongoing process. That’s why I define globalization this way: it is the inexorable integration of markets, nation-states and technologies to a degree never witnessed before—in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper and cheaper than ever before, and in a way that is enabling the world to reach into individuals, corporations and nation-states farther, faster, deeper, cheaper than ever before. This process of globalization is also producing a powerful backlash form those brutalized or left behind by this new system.” 2

  • Three of the four “Ism's” (communism, socialism, fascism and capitalism) are dead.

    • “ Eventually, people came along who declared that they could take [the] destabilizing, brutalizing swings out of the free market, and create a world that would never be dependent on unfettered bourgeois capitalists. They would have the government centrally plan and fund everything, and distribute to each worker according to his abilities. The names of these revolutionary thinkers were Engles, Marx, Lenin and Mussolini, among others. The centrally planned, non democratic alternatives they offered—communism, socialism and fascism helped to abort the first era of globalization as they were tested on the world stage from 1917 to 1989.

    There is only one thing to say about those alternatives: They didn’t work. And the people who rendered that judgment were the people who lived under them. So, with the collapse of communism in Europe, in the Soviet Union and in China—and all the walls that protected these systems—those people who are unhappy with the Darwinian brutality of free-market capitalism don’t have any ready ideological alternative now. 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. The answer is free-market capitalism. Other systems may be able to distribute and divide income more efficiently and equitably, but none can generate income to distribute as efficiently as free-market capitalism. And more and more people now know that. So, ideologically speaking, there is no more mint chocolate chip, there is no more strawberry swirl and there is no more lemon-lime. Today there is only free-market vanilla and North Korea. There can be different brands of free-market vanilla and you can adjust your society to it by going faster or slower. But, in the end, if you want higher standards of living in a world without walls, the free market is the only ideological alternative left. One road. Different speeds. But one road.” 4

  • Love it or hate it, Capitalism is alive and well and it is here to stay.

    • “The driving idea behind globalization is free-market capitalism—the more you let market forces rule and the more you open your economy to free trade and competition, the more efficient and flourishing your economy will be. Globalization means the spread of free-market capitalism to virtually every country in the world. Therefore, globalization also has its own set of economic rules—rules that revolve around opening, deregulating and privatizing your economy, in order to make it more competitive and attractive to foreign investment.” 3

  • The options available to people, businesses and governments are becoming fewer and the political choices available are severely reduced.

    • “I’m not saying that you have to put on the straitjacket. And if your culture and social traditions are opposed to the values embodied in that jacket, I certainly sympathize with that. But I am saying this: Today’s global market system, The Fast World and the Golden Straitjacket were produced by large historical forces that have fundamentally reshaped how we communicate, how we invest and how we see the world. If you want to resist these changes, that is your business. And it should be your business. But if you think that you can resist these changes without paying an increasingly steep price, without building an increasingly high wall and without falling behind increasingly fast, then you are deluding yourself.

    Here’s why: The democratization’s of finance, technology and information didn’t just blow away all the walls protecting alternative systems—from Mao’s little red book to The Communist Manifesto to the welfare states of Western Europe to the crony capitalism of Southeast Asia. These three democratization’s also gave birth to a new power source in the world—what I call the Electronic Herd.” 5

  1. The Lexus and the Olive Tree, (Anchor Books, Random House, New York, 1999-2000 © Thomas L. Friedman, Page 7.
  2. Ibid. Page 8
  3. Ibid. Page 9
  4. Ibid. Pages 103-104
  5. Ibid. Page 109

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