Globalization Won’t Stop

NEW HAVEN:

Nayan Chanda: Since The Lexus and The Olive Tree was published in 1999, the world has changed. How do you see this change has affected globalization as a phenomenon?

Thomas Friedman: The most important effect on globalization has clearly been 9/11. It has clearly been a huge olive tree event.

Chanda: If you could explain what an olive tree event is...

Friedman: A huge assertion of ethnic or religious identity, anger, rage, into this globalization system. But because it was targeted on the United States, which after all, is the heartbeat of this system, it's slowed down the system a little bit. It's interdicted travel a little bit. We see its impact on the airline industry. I won't say it's interdicted trade, but it's certainly slowed down commerce. It's put sand in the gears of the system, not in a fundamental way, but the danger that 9/11 poses, is if there is another 9/11. If there is another 9/11 that prompts the United States to really shrink the apertures into our country, whether it's the Canadian border, or seaports, or airports, or our rail lines, that really could have an effect on slowing down globalization, at least for a little while. That's the biggest impact, the biggest change since the book came out. But there's another important thing to keep in mind, because there are a lot of misunderstandings about this. A lot of people associated the dot-coms with globalization. And so when the dot-coms blew up, people wrote that globalization is over. My answer to them is very simple. It's true that there are no longer five websites where you can get 100 pounds of dog food delivered to your house in an hour, but there is one. And that's what's new. That's what you have to keep your eye on. People who say that globalization is over...

Chanda: And that one is Amazon.com?

Friedman: And the one is Amazon.com, or one other that we don't know. Dogfood.com or Pets.com, if it still exists. I just use it as an example. People who say globalization is over, I would like to introduce them to two pretty good sized countries; one's called India, and one's called China. These are two countries that have bet their future on a globalization strategy - on educating, empowering their people, and designing their infrastructure, trade and governance policies to succeed in globalization. They are two fifths of the planet. Go tell them that globalization is over.

Chanda: One of the features, you said, the most striking feature of the globalization system, as opposed to the Cold War system, is integration. Do you think that the integration aspect is being somewhat hampered by what has happened since 9/11?

Friedman: There is no question. One just looks at a place like Yale. I don't know this, but I assume that you have foreign students that may have come for a semester, gone home, and not been able to come back after spring break because of visa problems. This is a tiny example. I've had ambassadors around the world writing me about the problems that they're having with smart, bright kids, or professionals who have job opportunities, or study opportunities in the United States, that haven't been able to take them up as a result of 9/11. That will slow down globalization if it is permanent. My guess is that there will be technological fixes to all of these things. Some of them may not be pretty, because some of them may involve infringements on civil liberties as we've known them. But there will be fixes over time. We're in the adjustment period now.

Chanda: You know, in one of your pieces you wrote, that Ramzi Yousef, the guy who blew up the World Trade Center the first time - his desire to blow up the World Trade Center was because, as you said, "globalization as Americanization had gotten in his face, and it had empowered him, as an individual, to do something about it." Do you feel that globalization and Americanization are the same thing?

Friedman: I think that it was true to a point, and it was certainly true early on, but it's less and less true every day. My image of globalization, when one speaks about culture; I always ask people 'What's the most popular food in the world?' Is it the Big Mac? No, no. Is it spaghetti? No, no. The most popular food in the world is pizza. Now why is pizza such a popular food? Because every culture has a flat piece of bread on which you can stick all kinds of local ingredients and products. So in India you can get curry pizza, and in China you can get sweet and sour pizza, and in Mexico you can get chili pizza, or fajita pizza. And I look at the internet, which is now so much of a driver of globalization, as like a big pizza that every society basically puts its own local culture on. I don't know exactly when, but it will be sometime near 2010, where there will be more Chinese and Indian internet users than there are Americans. And that's going to change the flavor of the internet pizza. So, yes, initially America was the driver of this system and dominated in the cultural sense, but I think that will be less and less true with every passing day.

Chanda: You also coined the phrase, "super-empowered angry men," who are challenging globalization in many ways. These people are products of globalization themselves, but they are trying to create a different kind of globalized world. Is that right?

Friedman: Well, in some ways they're products of globalization - in that the hijackers of 9/11, some of them booked their seats on travelocity.com. They were very adept at communicating through the internet, even sending encoded, embedded messages, with steganography, as far as we can tell. Cell phones were a basic instrument of Osama Bin Laden, for passing messages and instructions. They were global men in many, many ways. And they have a global vision. I call them Islamo-Leninists. Because in another life, had Osama Bin Laden or Ayman al-Zawahiri of Egypt been students at Yale, they would have been Trotskyites or Marxists. These are people with Utopian visions. They want to bring the kingdom of God on Earth. But not a kingdom of a race, like the Nazis. Not a kingdom of a class, like Marxists, but a kingdom of a religion - Islam.

Chanda: One of the things you said about the need for fundamentals that countries need to have in order to better integrate into the globalized world, like good governance, rule of law, education, and the stuff you said that cannot be downloaded. The point is that the countries which are unfortunate to be in a geographically wrong area, or economically not endowed, how do you pull up these countries into the globalized world?

Friedman: Well, it's really good governance in space. Now what do I mean by that? I mean that the key to globalization is that it's not in the bandwidth, it's not in the wires, it is actually in the good old fundamentals. You get your governance right and clean; get your oversight; the regulatory bodies that look over your banking system and financial system in decent shape; get me a basic rule of law that as a foreigner I can invest in your country, and feel that if there is a dispute between me and a local businessman I can get it adjudicated without having to bribe the judge with a goat. And you get those basics right and a good education system so I have a pool of educated people to draw from, and you'll do fine. You'll do fine if you are Taiwan. Think about Taiwan for a second. This is a barren rock in a typhoon-laden sea off the coast of China, with what, twenty million people on it? They have the third largest foreign reserves in the world. It doesn't have climate going for it; it doesn't have natural resources going for it. All that it's got going for it are good fundamentals. So if you get your fundamentals right, the world will find you, the wires will find you, the bandwidth will find you. But if you get them wrong, then nobody will find you, or nobody will stick with you for very long. So really, success in globalization is all about that good old basic stuff. And that good old basic stuff is open for any country to acquire. How did Hong Kong succeed? It succeeded with the basics. Lord knows there is no natural resources there.

Chanda: Except the fact that some of the policies of the western countries, the developed countries, especially the United States, like steel tariffs, farm subsidies, and also the US attitude towards the Kyoto Protocol, International Criminal Court - all this kind of suggests the US is trying to hew its own course at a time when the US is the cutting edge of globalization, and the US is the major beneficiary of globalization. How do you explain this contradiction?

Friedman: Nayan, you're far too polite. It's not just a contradiction; it's a shameful contradiction. It's wanting it both ways. It's wanting to force open other people's markets for what we make and export successfully, while keeping our markets closed to some of the things they make and export successfully, often food and textiles for developing countries. It's wrong; it's a travesty, and it's the great Achilles heal of the globalization system. Someone told me the other day, though this may not be accurate. But a friend of mine from India told me that there was a study done about farm subsidies from developed countries, and if you took all those subsidies and put them together, you could fly every cow around the world first class. I don't know if that's accurate, but I bet the direction is roughly right. These are political questions. Hopefully we'll eventually get over them. I'm all for buying off our steel workers. I'm all for buying off our farmers. Let's cushion them from the ravages. But what I'm not for is being stupid. And when someone is knocking on my door as a country and saying that we'd like to sell you steel for less than it costs us to make it, and we slam the door and say no, no, no, we don't want that, that's just stupid, and that's what retards your growth as a country. We all need to take advantage of this system, but we need to make it fair. And there I believe the third world, the developing world, has a big and justifiable complaint.

Chanda: And that complaint of course is being expressed mostly at the WTO forum. And do you have any thoughts as to what should one do about the intellectual property right issue in the WTO, which is becoming a major obstacle to global trade?

Friedman: I don't know enough about where the proper compromise should be there, but what I know is this. People want to talk about whether we globalize; them, I don't have much patience for, because globalization here is being driven by technology, and it's the wave of the future. But people want to talk about how we globalize, how we do it technologically, how we do it legally, how we do it in terms of trade, and how we make it fair; that's a discussion I'm ready to have all day long. So I would have to defer to the experts on where the right compromise is on issues like patents, but it's certainly a discussion we should be having.

Chanda: And finally, as you know, the earlier period of globalization in the late 19th century abruptly ended at the beginning of the twentieth century with tariff walls rising and the immigration barrier rising. Do you see the same phenomenon being reproduced now with what's happening in Europe, vis à vis immigrants, even in this country about immigrants from third world countries facing more difficulty. How do you see this?

Friedman: Well, the first era of globalization was really built around falling transportation costs, thanks to the steamship and the railroad. This era of globalization is built on something different. It's built on falling telecommunications cost, and the transfer of voice, and data, and information, in an era of service economies. I see it being hampered potentially by the rise of this terrorist phenomenon, and how it could put sand in the gears of the system. But unless you tell me that people are ready to accept radically lower standards of living, I don't think we will consciously, as governments and societies, want to go back to the pre-globalization era. Now it may be that there is going to be a transition here where we find the technological ways. You know I was just at the Davos World Economic Forum, and when you go there as a participant they give you a name tag which you wear around your neck and it has your picture and bar code on it, and you can go to a computer and get all your messages, and when you go in and out of the Davos Conference Center, you press this and it gives you entry and your picture and your whole bio comes up. We may be going to that system. Certainly, if there is another 9/11, we're all going to be wearing Davos badges around our necks. To get into the airport, to get into the sports stadium, to get into any public place. That is, alas, I fear where we will go. But where we won't go, I believe, is backwards, to some prehistoric age.

Chanda: In the last several months some developments- especially in Argentina, Brazil, and now Peru, which are leading people to say, maybe Latin America is going to sign off from globalization. Do you see that as a possibility?

Friedman: I don't see it at all. I see Latin America afraid in my golden straightjacket, struggling to find a way to succeed in this system, consistent with its own culture. The reason globalization is going on so successfully, I think, is more and more countries are learning how to glocalize - how to fit their own culture, society and social needs into the demands of the global market. And the countries that are doing the best, I think, are countries like India, which hasn't opened up its markets fully, or China, which has gone slowly into this, but at the same time moved ahead. I always say, in this globalization system there is just one road; folks there is just one road. When someone comes and they say they've discovered a whole new road to prosperity. Oh, I grab my wallet. I know I came in here with $50; I'm leaving with $50. There is just one road, and it's the road, I believe, of free markets, of liberalized markets, and liberalized politics. But there are many speeds, Nayan. There's one road, and there's many speeds. Every country should go down the road in a way that is consistent with maintaining its cultural cohesion, its social cohesion, but at the same time its economic development. For some it might be 5 miles an hour, for others it may be 50. But promise me you just won't do one thing - not go down the road at all. If you do that, I promise you, you'll bring nothing but ruin and devastation to your people.

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