The Lexus and the Olive Tree 
by Thomas Friedman.
HarperCollins, 394 pp., £19.99, May 1999, 0 00 257014 9
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Global Transformation 
by David Held and Anthony McGrew.
Polity, 515 pp., £59.50, March 1999, 0 7456 1498 1
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Thomas Friedman is so much the kind of American that the rest of the world likes to despise that it’s a fair assumption he has, at least in part, adopted the pose consciously. He calls himself a ‘tourist with attitude’ and his attitude is that of the know-it-all, ‘wise up, you dumb cluck’ American journalist who is here to tell you your economy is blown, your politics stink and you haven’t a hope in hell of making it in today’s world. Given that he is writing about the most important political-economic development in the world today – globalisation – it is a shame that he spoils his case by wrapping it in the Star-Spangled Banner.

His voice is born of a century or more of American exceptionalism, of the belief in America as the city on a hill to which all yearn to travel, the superpower whose fin-de-siècle worries that its imperial powers were atrophying as those of other empires had done (see Paul Kennedy’s The Rise and Fall of the Great Powers) were allayed by victory in the Cold War and the subsequent discovery that its economy is the driving force for the rest of the world and a model nearly everywhere. After telling a little parable (this is a book of parables) about how surly and overpaid the staff at petrol stations are in the rest of the world, compared to their clean, helpful and cheap US counterparts, he intones:

what is going on in the world today, in the very broadest sense, is that through the process of globalisation everyone is being forced toward America’s gas station. If you are not an American and don’t know how to pump your gas, I suggest you learn. With the end of the Cold War, globalisation is globalising Anglo-American style capitalism. It is globalising American culture and cultural icons. It is globalising the best of America and the worst of America. It is globalising the American revolution and it is globalising the American gas station.

The need to learn to pump one’s own gas is not directed only at the developing world, but at us, the other rich countries:

As long as the Western Europeans stick with their rigid, protected welfare systems which, by making capitalism less destructive, also make it less creative and enriching, they won’t be a challenge to America. But the further ahead that America gets in this era of globalisation, the more I expect these countries will seek to mirror and mimic America. The inevitable adjustment will be enormously painful, but they will be forced to do it in order to maintain anything like their current standards of living.

Who, you may well ask, are the Americans to tell us how to pump gas or distribute welfare? Friedman does nothing to make himself more amiable; he is the kind of journalist who likes to tell you not only that he meets the top people, but that he parades his ego before them:

In the winter of 1998 I interviewed the Prime Minister of Thailand, Chuan Leekpai. Half joking, half serious, I began the interview by looking across the table at him and saying: ‘Mr Prime Minister, I have a confession to make. I helped oust your predecessor and I didn’t even know his name. You see, I was sitting at home in my basement watching the Thai baht sink (and watching your predecessor completely mismanage the economy). So I called my broker and told him to get me out of East Asian emerging markets. I could have sold you out myself via the Internet, but I decided to get my broker’s advice instead. It’s one dollar, one vote, Mr Prime Minister. How does it feel to have Tom Friedman as a constituent?’

In many European eyes, but especially those of left-wing intellectuals, Friedman is deeply objectionable; but is he also right? Is it the case that we are remaking ourselves, the world over, in the image of US capitalism, because the only alternative is North Korean autarchy? Clearly he isn’t always wrong, though much of what he says in the course of this enlightening and infuriating book can and should be contested. It is best read in conjunction with Global Transformations, which is as dry as The Lexus and the Olive Tree is racy, but far more considered. It was almost ten years in the making, and is so comprehensive in its description of the globalising process as to be indispensable. Friedman has had a lot of fun – he tells us his job, as foreign affairs columnist for the New York Times, is the best in the world – but Held et al. have done the reading, the cross-referencing and the pondering.

Friedman goes wrong in the way that good, attention-grabbing journalists often go wrong when they set out to write at length. He tends to fall back on the belief that the world he is describing started only when he began to cover it. The modern era of globalisation, he asserts, dates from 1989, when the Berlin Wall came down; before that, there had been the imperial and financial globalisation of the 19th century, and then two periods of freeze: the post-First World War depression and the post-Second World War division of the world into two blocs. But this is wrong: read the first chapter of Global Transformations for a densely woven account of the huge expansion of global institutions after 1945, and the equally massive increase not only of human rights treaties but also of non-governmental organisations (NGOs) working in the human rights and ecological spheres. By the end of the Eighties we had seen a definitive shift ‘marked by the internationalisation and transnationalisation of politics, the deterritorialisation of aspects of political decision-making pertinent to states, the development of regional and global organisations and institutions, the emergence of regional and global law and a multilayered system of global governance, formal and informal, [which] has profound implications for the nature of the democratic political community’.

This insight into what has been as much an extension as a dilution of government power is largely missed by Friedman, though he alludes to it in asides. One of the many phrases he coins is the ‘Golden Straitjacket’, which he uses to describe the assortment of policies and attitudes that favour privatisation, low inflation and low budget deficits, the deregulation of financial and other markets, free trade and foreign investment. Once the straitjacket is put on, he says, ‘your economy grows and your politics shrink.’ This is, to say the least, misleading. Even if the economy grows, politics do not simply shrink: they are displaced from former centres like the industrial ministries, to reappear in transnational guise, or in local dress, or in the strategies of NGOs and pressure groups, or in the new zones of conflict round the family and reproduction. To be sure, countries which have put on the Golden Straitjacket tend to lose any socialist politics as traditionally defined, since it inhibits anything more than brief departures from the policies listed above. But politics do not live, or die, on economic differences alone; and even in economic policy, major differences persist, as they do between the Labour and Conservative Parties in Britain on membership of the Euro – and of the European Union.

Friedman delights in finding tiro Americans everywhere he goes. On a trip to China in 1998, he fetches up with a team of international election monitors at a small village in the north-east of the country, called Gujialingzi. In that village and others like it, he finds peasants who believe in the ‘need to get more enterprises here and speed up procedures for generating wealth’ because ‘the whole world is turning into one big market for merchandise.’ In Amman in 1995, he meets a young man who hands him a business card reading ‘Jihad al-Wazir, Managing Director, World Trade Centre, Gaza, Palestine’. His father was Abu Jihad, commander of Palestinian military operations on the West Bank. On meeting him, Friedman thought to himself: ‘That’s amazing. From Che Guevara to Dale Carnegie in one generation.’

The book uses these nascent Americans to make the point that everyone wants to do the best for themselves and their families, and, given the space and the freedom, they will strive to be part of the only world which offers a chance of betterment – the globalising, US-dominated world. I have spoken to many people in the former Soviet Union and Central Europe who say much the same thing as Friedman’s interlocutors say. The problem is that (a) they are saying such things to a Western reporter, in nice clothes with wads of money in pocket or purse and an air ticket out of the country, an enviable figure whom there is a temptation to flatter; (b) they tend at the same time to confess their desire not to pay taxes, or not to suffer from any political change, or to make sure their enemies do; (c) they are enmeshed in cultures which cannot respond like America and the West Europeans states do, for all kinds of reasons, good and bad; and (d) if anyone in the former Soviet Union handed me a card with ‘Managing Director, World Trade Centre’ written on it, the figure who would come to mind would not be Dale Carnegie, but Don Corleone. In Palestine it may be different.

These are the good guys and girls in Friedman’s story: but there are bad ones, too. The Zapatistas, for instance, who held a conference in southern Mexico at which they denounced ‘the most evil, dangerous institution in the world today: the World Trade Organisation in Geneva, which promotes global free trade and an end to protectionism’. Or France and Russia, ‘the biggest trashtalkers in the world, always trying to make up for their weaknesses by giving everybody a lot of lip, especially Washington’. Even deeper in the doodoo are countries like North Korea, Afghanistan, Sudan and Iran. And Iraq, of course. ‘Saddam Hussein would rather pursue his own megalomaniac ambitions, gas and pillage his neighbours than subject himself to the discipline’ of the financial markets. Only the mad, the bad and the dangerous would choose not to be Americanised. Only one standard – agreement or disagreement with Americanisation – is used to judge behaviour that ranges from the genocidal to the culturally divergent.

Globalisation is, nevertheless, real. It is not like the globalisation of the 19th century, when the great imperial spiders spun their webs around the world. Held & Co call the contemporary version ‘thick’ globalisation, which differs substantially from the Victorian version:

By comparison with the late 19th century, when globalisation was defined as a coercive project of global empire-building or geopolitics, globalisation today reflects the varied and self-conscious political or economic projects of national élites and transnational social forces pursuing often conflicting visions of world order. Moreover the institutionalisation of world politics has transformed the politics of contesting and managing globalisation, which at the turn of the century was a purely internal imperial matter, into a global polities of agenda-setting, coalition-building and multilateral regulation.

Above all, contemporary globalisation challenges ‘the territorial principle’ as the sole basis of political authority.

Friedman is more pungent: ‘If the first era of globalisation shrank the world from a size “large” to a size “medium”, this era of globalisation is shrinking the world from a size “medium” to a size “small”.’ Neither Friedman nor Held has any time for the ‘seen it all before’ view of globalisation which flourishes in the European academy, though Friedman simply waves it away with the air of one who has been everywhere and talked to everyone, and thus knows that the future is working, here and now, while Held & Co stake out a middle ground between the ‘hyperglobalisers’, who believe that the state is being swept away by the tide, and the ‘sceptics’, who see globalisation simply as heightened interaction between nation states, each of which remains free to regulate its national economic and political activity.

The sceptics, Held & Co note, often combine this view with the belief that governments should regulate their political and economic activity, usually – though not always – in a socialist or social-democratic direction. Thus in the question and answer session which followed Anthony Giddens’s first Reith Lecture, the left-wing Stuart Hall argued that globalisation came with a right-wing agenda tied to its tail, one which was destructive of social solidarities, while the right-wing John Redwood objected that it came veined with social-democratic notions which discouraged governments like Britain’s from making up their minds to be independent nation states in charge of their own economy and their own politics.

The different styles of Friedman’s and Held’s books mask substantial agreement on what is important in the global agenda. One item of acute contemporary relevance is the globalisation of war. Friedman propounds ‘The Golden Arches Theory of Conflict Prevention’: no two countries both of which have at least one McDonald’s franchise have gone to war. This was disproved as soon as the book was published – Belgrade has more than one McDonald’s – but the theory also emphasises the very high cost of warfare to any country which is even partially tied into the globalisation process. He may have been wrong about McDonald’s, but he is right about the cost of war, as Yugoslavia and Nato, in their different ways, have learned. Globalisation, Friedman says, ‘increases the incentives for not making war and increases the costs of going to war in more ways than in any previous era in modern history’. Held & Co agree that the costs have risen, but in a fascinating chapter called ‘The Expanding Reach of Organised Violence’ show that they have not risen everywhere to the point where war has become unthinkable. For states on the periphery of the rich world, where instability and rivalry are the order of everyday life, war is still diplomacy by other means and there ‘is no deterrent to war as a rational instrument of state policy’.

In Yugoslavia, we see these two worlds in collision, the logic of the first confronting the logic of the second in a struggle which is unlikely to be the last of its kind. We also see something of the reality of the ‘humanitarian war’ on which Nato embarked in Kosovo, and which is quite inexplicable to those for whom war remains a matter of conquest or defence – most of the world, in terms of population. In the rich countries, the imperative of contentment has suppressed what remained of ‘security politics’ after the collapse of the Soviet Union; we live in what the German sociologist Ulrich Beck calls a post-military state. We have also woven about us a ‘human rights regime’ which has, as Held & Co put it,

entrenched in international law the notion that a legitimate political power must be, on the one hand, a form of political power that is accountable to the members of the political community in which it is embedded and, on the other, a promoter of fundamental human rights ... ‘cosmopolitan’ (human rights) law defines and seeks to protect basic humanitarian values which can come into conflict, and sometimes contradiction, with national laws.

As I learned repeatedly in a recent stint of reporting in Russia, this is anathema to those who, like the Russians, cling to the Westphalian model of the sovereign nation state as protection against the depredations of Nato, now the only force able to project itself round the world, and who see in the war in Kosovo only an imperialist attack clothed in a hypocritical appeal to universal values. This is a general and popular view, though how deeply held and how susceptible to counter-argument it is difficult to gauge, since there is little real debate in a country which sees the West as a whole, and the US in particular, as a ravening presence, destructive not just of the infrastructure of Yugoslavia but of all cultural values that are not its own.

That cultural globalisation comes dressed like a Dallas Cowboys cheerleader is again a point of broad agreement between Friedman and Held. Friedman likes to pose as a sophisticated American tourist who wants the foreign spots he visits to be ‘genuine’, unspoiled by American junkery. He complains constantly about the omnipresence of Taco Bell, McDonald’s and Kentucky Fried Chicken. However, he is a good reporter and doesn’t leave the matter there: he reports that Taco Bell, McDonald’s and Kentucky Fried Chicken are not just installed, they are full. People like them. He quotes a Malaysian human rights activist, Ivy Josiah: ‘For a Malaysian kid today the big treat is going to Pizza Hut. Globalisation is Americanisation. Elites here say: “You should not have McDonald’s,” but for the little people, who don’t get to travel to America, they have America come to them.’ Though all Friedman’s interviewees provide him with quotes too wonderful to be wholly true, this sounds right, especially the remark about the élites. In 1992, a few months after Russia had been reconstituted from the ruins of the Soviet Union, the Russian Vice-President, Alexander Rutskoi, wrote in tones of patriotic despair about the queues for Moscow’s first McDonald’s, on Pushkin Square: the death of his country’s culture was taking place in the square named after its most famous poet. That people, not all of them young, were surging into McDonald’s because most restaurant food in Russia was disgusting slop, more or less thrown at the customers, had not occurred to him.

It is nothing new for cultures to export their highest and lowest achievements. The difference now is the scale and the speed at which they do so, and the dominance of Americana. Held and Co show that where the US imports a tiny 2 per cent of its total broadcast output, its exports account for around a quarter of output in European states and Japan, and up to three-quarters of output in Latin American states, in spite of the language difference. US production dominates the market in three-quarters of the countries to which it exports its films, and even countries with powerful movie cultures of their own – France, Italy, Japan and Russia – have succumbed. All the multinational fast food chains are American, even when their main product is a pizza or a taco. The president of McDonald’s International, James Cantalupo, tells Friedman: ‘Look, McDonald’s sells bread, meat and potatoes. They eat bread, meat and potatoes in most areas of the world. It’s how you package it and the experience you offer that counts.’ The main media corporations are American, with Time Warner and Disney turning over almost as much as the rest of the top ten put together. The Internet was developed in the US; the hardware and software are driven from there (but largely manufactured elsewhere). Even when European or Japanese companies make a sizable dent on the world (as against local) media markets, they do so by buying US companies – Bertelsmann bought RCA Records, Doubleday and Random House, Matra-Hachette bought Diamandis Communications and Sony (disastrously) bought Columbia Pictures. Finally and most important, the fact that the two hegemonic powers of modern times have been Britain and America means that English will remain the world language for some time.

On the other hand, everything is not becoming homogenised. Friedman, who devotes much of his book to urging the backward to be more like Americans, sounds a little like a weeping crocodile when he warns against homogenisation – and does so, typically, by laying down the rules for enjoying a Big Mac:

I’m glad a little Japanese girl likes McDonald’s, just as I’m glad my girls like sushi. But it’s important that this Japanese girl likes it because it is different, not because she is fooled into thinking that it is actually Japanese. When that happens, homogenisation is just around the corner. When that happens, there is every chance that this Japanese girl will eventually lose touch with what is really Japanese, and one day she will wake up and discover she has been invaded and there’s nothing left of her original self and culture.

What defines what is ‘really’ Japanese, or really anything? The really Scottish kilt was invented by an Englishman and the really English Bank of England by a Scotsman. The really Russian pelmeny dumplings were invented by the Chinese and the really Russian Kremlin was built mainly by Italians. The really Japanese system of ‘just-in-time manufacture’ was invented by an American, to whom the American manufacturers had not listened until they had to because the Japanese made such good use of his work that they were obliged to copy it. Cultures do not disappear like soft stone eroded by tides: they interact with the visitor or invader cultures, as the Indian did with the British, and the Caucasian did with the Russian. Even when the empires which force these cultures on them collapse, the indigenous cultures continue to work on what they have been left, or what they have taken, to produce new forms. The most formidable film of the late Soviet era was the Georgian director, Tengiz Abuladze’s Repentance, a Russian-language fable that was deeply Georgian in its spirit as well as its mise-en-scène. It anticipated the spasm of revulsion against Soviet cultural domination which shook all the Soviet states in the Eighties and culminated in the Union’s sudden collapse, followed in many cases by doomed attempts to rediscover a culture of ‘their own’, as if centuries of Russianisation and Sovietisation had not, by now, been made ‘their own’. Satyajit Ray’s ‘Apu Trilogy’ was an Indianisation of European film-making, as Kurosawa’s Seven Samurai was a Japanisation of the Western, yet both were ‘really’ Indian and ‘really’ Japanese. Though Held and Co are rather less crude on this point than Friedman is, they are not inclined to say very much more about it than that it’s all very complex, suggesting that groups such as the Scottish National Party or the Basque and Catalonian independence movements may be responding to an erosion of the larger national cultures of which they were a part. We will have to wait, as they say in the academy, on further research.

If Friedman is apparently candid, and over-concerned, about American cultural hegemony, he is emphatic that the US is not to blame for its economic hegemony. In one of several imagined conversations between the big players in the globalised world, he has Robert Rubin, the former US Treasury Secretary, address the Malaysian Prime Minister, Dr Mahathir bin Mohamad, after the latter had used the World Bank meeting in Hong Kong to denounce the evils of globalisation, comparing the global economy to a jungle full of ferocious beasts and dominated by a Jewish cabal.

Excuse me, Mahathir, but what planet are you living on? You talk about participating in globalisation as if it were a choice you had. Globalisation isn’t a choice, it’s a reality. The only way you can grow at the speed your people want to grow is by tapping into the global stock and bond markets, by seeking out multinationals to invest in your country and by selling into the global trading system what your factories produce. And the most basic truth about globalisation is this: no one is in charge, not George Soros, not ‘Great Powers’ and not I. I didn’t start globalisation. I can’t stop it and nor can you, except at a huge cost to your society and its prospects for growth.

This is one of the two most important claims of Friedman’s book. He is not the first to make it, but he does so most vividly and with the greatest insistence that contemporary political leaders in any country, including America, are ultimately helpless before what he calls the ‘electronic herd’ of stockbrokers, bond and currency dealers, mutual and pension fund executives, merchant bankers, individual investors and the financial advisers, analysts and journalists who swarm about them. This is the herd which politicians aim to make comfortable in their countries and, above all, to keep from charging out in mass panic as they did last year from Malaysia and other South-East Asian states, from Brazil and Argentina and, most notably, from Russia. To keep the herd grazing contentedly in your pasture, your country must put on the Golden Straitjacket and smile benignly. For this is the only way to satisfy the other ‘herd’ – the people, the voters, the electorate – who also want what Galbraith has called a culture of contentment. It is not a heroic role for the politician to play: it denies him or her a Churchillian or Gaullist aura, in favour of life as an endless reception for foreign CEOs whom you show the national treasures, fill up with the national booze, introduce to the national spouse and dun for multinational investment. Politics, Friedman says, is now situated between the two herds, between Croesus and the Demos – and that is where it ought to be, for it makes people richer, more peaceful and freer than they have ever been before.

Friedman’s is not a bad description of the way life in the rich Western states is sustained at its present level, which is also the way many of the developing countries and the post-Communist ‘economies in transition’, especially those which are developing or transiting most successfully, are living and continue to live, even after last year’s severe wobble caused many to believe that the electronic herd was composed of lemmings. In a speech last April, Stanley Fischer, first deputy managing director of the IMF and one of the masters of the universe who, according to Friedman, still cannot control it, observed with smugness that almost all the countries which had plunged into crisis or near-crisis a year ago had righted themselves with the aid of policies urged on them by the IMF. Those that hadn’t, of which Russia is incomparably the most important, are still foundering.

Fischer was right, at least for now. The mass retreat into protectionism and statist solutions which many predicted did not occur: instead, the South-East Asian and Latin American states most affected by the thundering out of the herd have sought to trim or restructure their policies to tempt it back. The largest economy in this configuration, Japan, whose rather longer financial crisis was one of the causes of last year’s panic, is undergoing what can only be described as a further round of Americanisation, a process which included, in May, the news that its official unemployment total was now higher than that of the US, for the first time in more than three decades. It turns out that the opaque financing structure, the rigidly hierarchical management culture and the dominance of the large corporation over the innovative start-up were not, in the end, a match for the American model of transparency and entrepreneurialism – or so the Japanese constantly say.

And not just the Japanese. At a recent seminar on the Third Way in Washington, attended by the leaders of Germany, Italy, the Netherlands, the UK and the US, Massimo d’Alema, the former Communist who is now the Prime Minister of Italy, said that the sheer energy and success of the US economy was forcing change in his and other European countries. If the success of the US is an illusion, it is an illusion shared by the Japanese corporatists and European leftists now in government, none of whom has time to spare for illusory models. US multinationals, as Held & Co note, ‘continue to expand on the basis of their technological superiority’, though the merger of Daimler Benz with Chrysler, with DB clearly the senior partner, shows that a very good European corporation can still play in the biggest games. US banks dominate in the investment sector and have wiped out the British competition by taking it over, even within the City of London. The US Government is incomparably the largest influence on the Bretton Woods institutions, the most important of which have their headquarters in Washington. The American Way is the world’s way and, for the present, it is the world’s way of choice.

This leads Friedman to make his second large – not to say, breathtaking – claim: that the US, because it has attained the status of leader, must now also be the model for the rest of the world and must make the other countries not just into good capitalist regimes but into good social democrats. At the end of a book in which he slaps everyone, or almost everyone, about the head for not realising how to get on with the market, he turns around and says: ‘but of course, the market is not enough.’

There is, he says, a political matrix for the globalising world, with a vertical and a horizontal axis. At one extreme of the horizontal line are the separatists, who ‘believe that free trade and technological integration are neither good nor inevitable, because they widen income gaps, lead to jobs being sent abroad, homogenise culture into some global mush and lead to life being controlled by distant, faceless market forces. They want to see globalisation stopped in its tracks.’ At the other horizontal extreme are the integrationists, who welcome globalisation ‘and want to see it promoted through more free trade, more Internet commerce, more networking of schools, communities and business, more electronic mail so that ultimately we have global integration 24 hours a day.’ On the vertical line, one extreme is occupied by the ‘let them eat cake-ers’, who are hostile to safety nets, want lower and lower taxes and less and less government and believe that wealth and morality are best served by people learning that they are responsible for themselves. At the other end are the ‘safety-netters’, who want to ‘cushion the fall of the left-behinds, bring them into the system by helping them acquire the tools and resources to compete’ and to ‘encourage democratisation in developing countries because there is no sustainable globalisation without democratisation’.

Friedman regards himself as an integrationist safety-netter, a position he says is occupied by Bill Clinton. The argument he advances in its favour is essentially a globalisation of one of the old arguments for social democracy:

I believe that you dare not be a globaliser today without being a social democrat (that is, a safety-netter), because if you don’t equip the have-nots and the turtles in your society to survive in this new system, they will eventually produce a backlash that will choke off your country from the world. And I believe that you dare not be a social democrat, or safety-netter, today without being a globaliser because without integration with the world, you will never generate the incomes you need to keep the standards of living rising and to take care of the left-behinds.

This is not just a good shorthand description of Clinton’s position: it also describes that of Tony Blair and New Labour. It is, in other words, the Third Way, which is the reason the Third Way, despite all the suggestions that the phrase means nothing at all, is an important concept, whose imprecise lineaments are now becoming clear. The Third Way is social-democratic globalisation; and just as social democrats accepted capitalism with a more or less good grace when it was a largely national phenomenon, so the modern social democrat is asked to accept globalisation – indeed, to further it, to encourage it, to revel in its possibilities – because it means increasing wealth.

This, Friedman says, involves a new politics; but because he has already said that no one can control the electronic herd or loosen the Golden Straitjacket, it is not quite clear what the politics is for. Held & Co, who believe that ‘globalisation is not, nor has it ever been, beyond regulation and control,’ naturally have more to say about this, and though they say it numbingly at times, they at least make it clear both that the world has been developing more institutions of transborder control and regulation, and that these institutions, coupled with the growth of transnational financial and corporate power, pose the starkest of challenges to national political structures: ‘Political space in respect of effective government and the accountability of political power is no longer coterminous with a delimited national territory. The growth of transboundary problems creates overlapping communities of fate: that is, a condition in which the fortunes and prospects of individual political communities are increasingly bound together.’

The recognition that we live in ‘overlapping communities of fate’ has to be accompanied by the further recognition that not all communities, or states, see life that way, but instead see themselves, and are encouraged to see themselves, as victims of the West. They are sure that someone is in control, and that people like Robert Rubin consciously shape the world to suit the interests of America and the other developed states. This is not always a delusion, whatever Friedman may say; after all, what is a US Treasury Secretary for, if not to increase the wealth of Americans first? And is that always good for everyone else?

The Third Way-ers, or integrationist safety-netters, have a tough job, as the war in Kosovo has, I think, made many of them realise. The end of the Cold War has left the developed West in possession of the commanding heights of the world economy; the ideology which the West says was ultimately responsible for its victory – liberalism founded on a capitalist economy – dictates that the freedoms won must now be shared. ‘Our political institutions,’ as Held & Co finally and judiciously put it, ‘will have to change if some of our more cherished notions – a circumscribed political realm distinct from ruler and ruled, the rule of law, political accountability, social justice and a self-determining people, to name but some – are to retain their relevance and efficacy.’ Which is, as Friedman would put it, quite a mouthful.

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Vol. 21 No. 18 · 16 September 1999

John Lloyd dislikes the smug, in-your-face style of Thomas Friedman’s celebration of US-led globalisation in The Lexus and the Olive Tree, but in the end does no more than shrug his shoulders in a helpless, ‘it’s inevitable’ kind of way (LRB, 2 September). Those of us who have travelled as consultant economists on the same route as Lloyd from Prague and Warsaw to Beijing, with detours to Kampala and Delhi, will recognise Friedman’s anecdotes as just a racier version of the blundering and factually ill-founded advice given by IMF/World Bank/ USAID advisers and consultants. This advice, as Lloyd hints, simply boils down to supporting US financial interests wherever they choose to go by giving up all control on matters as diverse as capital movement, tariffs, taxes, public expenditure and labour law. Those who have no controls lose control.

The issue is not one of denying globalisation but of ignoring the fact that each of the various globalising forces derives from a separate source and, in its own way, is subject to national control. Globalisation of culture (primarily by television), of information (primarily now by the Internet), of production, of political organisation and ethics, and of finance are all different. Lloyd makes the mistake (as Friedman does) of assuming that globalisation of finance is the most important and the least controllable. But take the Chinese and Indian economies, by far the largest in Asia: they avoided the financial cataclysm South-East Asia suffered (and probably saved the world economy) by relatively crude controls over capital movements and exchange rates. Despite these controls, China still sells into world markets and multinationals still build factories there.

In refusing to square up to the central hollowness and partiality of Friedman, Lloyd adopts one of the loneliest positions in the world: that of the integrationist safety-netter. I have sat in on meetings in a dozen capitals and heard the US and British acolytes of the IMF integrationist school pour scorn on just about every conceivable version of a national safety net.

Michael Prior
Hebden Bridge, Yorkshire

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