Adonis Diaries

Posts Tagged ‘Joseph Schumpeter

“The Lexus and the Olive Tree” by Thomas Friedman,(Written on July 28, 2006)

Note: Friedman owe it to his readers to revise his opinions after the Wall Street financial crash of the century.

Friedman coined Globalization as “Globulation”, which is a process for the Electronic Nerds and multinationals to invest in bonds and stocks throughout the world, using the internet and the fast communication facilities.

This process is forcing many countries to reform their political, economic, financial, and legal institutions to encourage these nerds to invest capitals in order to modernizing banking, services, public institutions and industrial complexes in developing and developed countries as well.

There are many advantages and serious handicaps to joining this bandwagon of the world open free trade system.

The book is of 4 parts.

The first part is divided into Seeing the System, Plugging into the System, The Backlash against the system, and America and the System.

The second part explains how the System works so that after reading the first part I skipped to the third part.

I got interested in the third part:  I wanted to know the reasons of this serious backlash over the World Trade Organization (WTO) that united many disparate organizations from the environmentalists, the saving of nature, the saving of the rain forest, the coalition of protectionist labor unions, anti-sweatshop protesters, and the anti-genetically altered food activists.

All these anti-globalization organizations view the WTO as setting the rules for an unfair world commerce and basically hostile to the real interests of human beings.

The main political issue is that the electronic nerds are becoming major unseen voters in elections:  governments that were elected under a certain platform would quickly change their programs to cater to the requirements of the electronic nerds for financial transparency, international accounting standards, free press, and more flexibility to a changing world, more democracy, and more connectivity.

Although politics will always remain local, and even if the nerds who basically don’t care much about politics, the electronic nerds do insist on a system that may encourage them to invest profitably in specific markets, inevitably lead to drastic changes in politics, management, and social and legal structures.

Friedman borrowed computer jargons to drive in his idea. He claims that after the fall of the Berlin Wall, and the walls of the Cold War System, the only hardware that survived was the free market capitalism.  Hardware is not enough; to be successful in this new System societies need performing operating systems and software.

Countries have to switch from the archaic and slow operating systems DOScapital 1.0 to the fast and performing DOScapital 6.0 that encourage the electronic nerds to have confidence and transparencies in their bond and stock markets.

The new system will no longer discriminate among developed or developing or emerging markets in countries, but among the transparent and non-transparent countries for honest legal systems, open information flow and a steady democratic process to the international financial communities.

The winners in this competition are for the shapers of new standards and the fastest in recognizing the consumers’ trends. He gave as an example of how Compact took the lead over IBM by quickly integrating the fastest chips in the market in its personal computers because the customers around the world were vying for the fastest computers; in the same time, Compact fell off the race when it failed to ride the internet on time and was displaced by Dell within six months.

Globalization revolves around the capitalist concept of Joseph Schumpeter in his classic work “Capitalism, Socialism and Democracy” that the essence of capitalism is the process of creative destruction of the less efficient companies, products or services and replacing them with better adapted systems that can cater quickly to customers and market demands.

Companies have to constantly reinvent themselves and produce quarterly strategies to stay in the game.  Managers have to be able to grasp the complexities of the current system by being knowledgeable to thinking in 6 dimensions, geopolitics, economy, finance, environment, technology and trends.

Since sociology almost always dominates technology, it is then essential that societies learn to be ready to break with the past if they are wiling to let small entrepreneurs thrive..

One of the serious backlash to globalization is its increased trend to distort communities and weaken the everyday human interactions.  It is the tug of war between the attachment to the olive tree traditional structure of societies and the newly fast and independent behavior of individuals to get to the fast track of prosperity and material acquisitions.

It would be essential that institutions provide a human alternative at the end of the phone line instead of complete voice mail choices; people are willing to wait in order to be in contact with a real person listening to their requests and explaining their predicaments.

Thomas Friedman advances this theory:  no countries that opened up it market for McDonald franchises have suffered military conflicts after the fall of the Berlin Wall, and that those leaders who ignored that fact will have to pay a dear price for their adventures. I suspect that he selected McDonald because he liked the “Golden Arch” title for his theory since it is of paramount importance to have a balanced basket of multinationals in selected markets as proof of serious US involvement in the peace and security of a country.

Well, Lebanon is flooded with every kind of US franchises in the food business, but it was not spared complete destruction this time around.  Or maybe the theory is about right: these US multinationals are concentrated in Beirut which was spared on the basis of not weakening the Lebanese Seniora PM government!

Amazing that this theory could be applied even selectively on specific cities within one country!  McDonald, Burger King, and Kentucky Fried Chicken might be common in Lebanon but Lebanon will never fall under the “Golden Arches” theory until the technologically advanced companies such as Intel, Cisco and Microsoft are permitted by the US administration to invest in Lebanon.

May be the Middle East will have to wait until Israel gives the green light, which is never, or until the US policy makers discover that Israel’s deterrence forces for fulfilling the US agenda in the Greater Middle East are not as important as they used to be during the Cold War system.

You might have the impression that Friedman is promoting the Lexus or the Electronic Nerds system, but my own feeling was that he was warning us about its collateral destructions and the need to save our olive trees.

The new system is too fast in demolishing everything that make us “feels home” and the alternative public and private institutional powers are not as fast and dedicated at saving us from alienation everywhere we travel and even at home.

Languages are disappearing quickly: roughly 6,000 spoken languages not taught to children are practically dead, 300 languages are spoken by more than a million people.  Languages, like culture and species, are being lost at an alarming rate.

Ken Hale of the MIT stated that “when we lose a language, it is like dropping a bomb on the Louvre” because we are sacrificing raw knowledge, the intellectual achievement of millennia.

Indigenous cultures are being eradicated by the insidious homogeneous development of the multinationals because the hard filters are not being installed quickly and effectively to ward off the damages done by the electronic nerds and the multinationals. The corner bakeries and family shops are being transferred to mega malls and everywhere you tour exotic towns you see the multinational logos dominating the main hills and major intersections and leaving you we the impression that local cultures are retreating fast before the invasion of homogenization.

One example is the Japanese girl who was visiting the US and exclaimed that even here they have their Japanese McDonald because this franchise is so pervasive in Japan.

Warding off the dangers of the new system requires the coordinated efforts of strong planning by bureaucrats, honest politicians, private organizations, culturally minded corporations and the elites in communities who are ready to assign a real value to cultural preservation.  The same process applies to the rain forests, the natural preserves, the historical sites, and the preservation of the plant and animal species.

Ultimately, the main power that might shift this trend to homogenization and “winners take all” are the mainstream political parties who adopt policies to reverse this tragic trend.

The UN and mainstream political parties can secure jobs for locals in order to withstand this devastating typhoon of the new system that threatens to crush human diversity and preserving the olive trees for the communities.

Securing jobs and re-educating the children and local communities should go hand in hand.




September 2021

Blog Stats

  • 1,479,543 hits


Join 811 other followers

%d bloggers like this: