The Lexus and the Olive Tree: Understanding Globalization (Thomas Friedman, 1999)

Microchip Immune Deficiency Syndrome, or MIDS

A disease that can afflict any bloated, overweight, sclerotic system in the post- Cold War era. MIDS is usually contracted by countries and companies that fail to inoculate themselves against changes brought about by the microchip, and the democratizations of technology, finance and information-which created a much faster, more open and more complex marketplace, with a whole new set of efficiencies. The symptoms of MIDS appear when a country or company exhibits a consistent inability to increase productivity, wages, living standards, knowledge use and competitiveness, and becomes too slow to respond to the challenges of the Fast World. Countries and companies with MIDS tend to be those run on Cold War corporate models - where one or a few people at the top hold all the information and make all the decisions, and all the people in the middle and the bottom simply carry out those decisions, using only the information they need to know to do their jobs. The only known cure for countries and companies with MIDS is 'the fourth democratization.' This is the democratization of decision-making and information flows, and the de-concentration of power, in ways that allow more people in a country or company to share knowledge, experiment and innovate faster. This enables them to keep up with a marketplace in which consumers are constantly demanding cheaper products and services tailored specifically for them. MIDS can be fatal to those companies and countries that do not get appropriate treatment in time.

Golden Straitjacket

Making the private sector the primary engine of its economic growth, maintaining a low rate of inflation and price stability, shrinking the size of its state bureaucracy, maintaining as close to a balanced budget as possible, if not a surplus, eliminating and lowering tariffs on imported goods, removing restrictions on foreign investment, getting rid of quotas and domestic monopolies, increasing exports, privatizing state-owned industries and utilities, deregulating capital markets, making its currency convertible, opening its industries, stock and bond markets to direct foreign ownership and investment, deregulating its economy to promote as much domestic competition as possible, eliminating government corruption, subsidies and kickbacks as much as possible, opening its banking and telecommunications systems to private ownership and competition and allowing its citizens to choose from an array of competing pension options and foreign-run pension and mutual funds.

Electronic Herd Groups

One group I call the "short-horn cattle." This includes all those people involved in the buying and selling of stocks, bonds and currencies around the world, and who can and often do move their money around on a very short-term basis. The short-horn cattle are currency traders, major mutual and pension funds, hedge funds, insurance companies, bank trading rooms and individual investors. They include everyone from Merrill Lynch to Credit Suisse to Fuji Bank to the Charles Schwab Web site, where anyone with a PC and a modem can trade on line from his living room. The other group I call the "long-horn cattle," These are the multinationals--the General Electrics, the General Motors, the IBMs, the Intels, the Siemenses - which are increasingly involved in foreign direct investment, building factories around the world or striking international long-term production deals or alliances with overseas factories to make or assemble their products. I call them the long- horn cattle because they have to make longer-term commitments when they invest in a country. But even they now move in and out, like a herd, with surprising speed.