THE LEXUS AND THE OLIVE
TREE
By Thomas Friedman (2000)
GLOBALIZATION
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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.
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Examples: GPS and Islam; Kayapo Indians
Globalization is sometimes seems as
 “Americanization.”
(Islam vs. McWorld)

1989 BERLIN WALL FALLS – COLD WAR ENDS
A NEW ECONOMIC ERA BEGINS

Globalization encourages the growth of free
trade. This comes about with the following:
A strong private sector economy
 stable prices
low inflation
 Balanced budget
low or no tariffs
 Eliminate government corruption
 Open to foreign investment
 Promote competition at home
 Privatize state-owned industries
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NEW RULES
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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”