Understanding Globalization

In: Business and Management

Submitted By shinysuiteman
Words 2336
Pages 10
The Lexus and the Olive Tree
Understanding Globalization

Financially, Citizens, and countries are no longer islands into themselves. With the advent of globalization, the computer, and in particular the internet, people can easily invest not only in foreign corporations but also in the bonds and other papers of the foreign countries themselves. As a result, what happens in the economies of foreign countries can rapidly affect the investors of countries halfway across the world. This has been the case for only ten years, and the reason why Friedman says its whole new ball game and that --- “the world is only ten years old”.

The cold war no longer is a dominating system for understanding foreign affairs. We are now in a new international system Friedman calls “globalization”. The Cold war was characterized by division; now it’s characterized by integration, integration made possible by rapid-speed airplanes, cheap international telephone charges, satellite communication and more than ever, the computer and the internet. We now have an entirely new set of financial understandings to achieve. What used to be true is no longer necessarily true.

As a result of information Arbitrage, we can no longer think like specialists, because what’s going on in this new world requires us to think rapidly and multi-dimensionally. We can no longer, for example, think only like financiers; we must understand policies, because what happens politically in one country can affect finances in another. How? Why? Because, we can invest in corporations and countries other than the U.S., for the same reason, we can no longer look at the weather patterns in just here in the U.S.; what happens with the weather in a foreign country might affect that country - markets in which we may have invested.

Friedman uses the Lexus as a symbol of “the drive for sustenance, improvement, prosperity…...

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