Globalization
November 12, 2008

RADIO 2GB NEWS COMMENTARY BROADCAST ON FRIDAY OCTOBER 1 1999 ON RADIO 2GB’S “BRIAN WILSHIRE PROGRAMME” AT 9 PM, AND ON OCTOBER 3 1999 ON “SUNDAY NIGHT LIVE” AT 10.30 PM.

This week’s survey of the most influential people in Britain showed that while Tony Blair the British prime minister ranked number 1, the next three positions went to foreigners: Bill Gates of Microsoft, Alan Greenspan the head of the US Federal Reserve Bank and Rupert Murdoch the media magnate. The Queen came in at number 47. This is an example of the impact of globalization.

Thomas Friedman of the “The New York Times” has been in Australia to promote his excellent book on globalization “The Lexus and the Olive Tree”. I caught up with him at a recent lunchtime meeting at the US Information Service.

What he had to say was music to my ears. I have been talking about globalization for almost two decades and have four written books on the subject. But the academic world has been slow to catch on to globalization. Now more progress can be made outside academia.

The essence of globalization is the declining role of national governments. Instead, according to Friedman, national governments are competing against three “democratizations”: finance, technology and information. Governments have to comply with the new rules of global finance: they have to maintain low inflation, reduce the number of bureaucrats and balance their budgets. Australia has been able to do – hence the popularity that Australia enjoys with overseas investors.

The title of the book comes from Mr Friedman’s visit to the highly automated Lexus factory in Japan. He decided that that particular brand of luxury car represents all those in who are “intent on building a better Lexus, dedicated to modernizing, streamlining and privatizing their economies in order to thrive in the system of globalization”. The olive tree, for Mr Friedman, represents “everything that roots us, anchors us, identifies us and locates us in this world – whether it be belonging to a family, a community, a tribe, nation, a religion, or, most of all, a place called home”.

In the old Cold War system, the most likely threat to your olive tree was from another olive tree. It was from your neighbour trying, so to speak, to dig up your olive tree and replace it. In the Lexus world, the threat is not from another olive tree (such as the Soviet Union) but from the anonymous, transnational market forces and technologies that make up today’s global economic system.

The challenge is to strike a balance between the advantages and disadvantages of globalization. Globalization has many advantages, such as the spread of information and indeed people around the world can now hear Radio 2GB on the internet. On the other hand, it would be a tragedy if all the world were reduced to just one culture made in Hollywood.

Therefore, attention needs to be focussed on this challenge. Unfortunately, many people are in a state of denial. They do not want to think about this challenge because they do not believe it exists or that it is merely a passing fad. This is not the case.

“The Lexus and the Olive Tree” is a wake-up call that globalization is the main game in town and we need to pay far more attention to it.