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 / Fourth Quarter 2001 / Issue 25(originally published by Booz & Company)


Best Business Books: Global Management

This perspective is close to being the “official future,” expected to happen based on conventional economic wisdom, and it is generally dismissive of danger and compassion. When any issue clashes with economic orthodoxy, Micklethwait and Wooldridge brush it deftly aside. For example, on the subject of child labor, they stigmatize all attempts at “fair trade” as protectionist. What those who object to six-year-olds working in Pakistan’s sweatshops “really” want is to protect American textile industries, they argue. Interestingly, they approve of protesting these practices if the protest takes economic forms — labeling textiles as free of child labor, for example. Where they found the moral radar to examine the child-labor critics’ “real” motives they do not say.

I regard child labor as both morally abhorrent and stupid, saddling nations with unschooled adults for the rest of their natural lives. An economy like Singapore’s, which has risen from a gross domestic product per person of $450 in 1967 to $28,000 today, has educated every citizen to the hilt and punished companies paying low wages to its citizens with an education tax. We do not hear of these kinds of regional adaptations.

The authors’ reluctance to let go of their purely economic perspective and even consider what the information revolution might be doing to economic “science” limits the book’s value. Not surprisingly, they criticize Schwartz’s new paradigm and anyone who suggests that 19th-century economic metaphors of great machines might need revision.

This book is at its best in exploding myths. These include “size trumps all.” The authors relate cases of smaller players running rings around lumbering giants. McDonald’s is often thought of as an example of the universal product; in fact, the company has survived via its international division and its infinite variations across the globe. Another myth is that globalization is a zero-sum game. The authors argue convincingly that additional value is created, even if some players lose.

The Precarious Balance
One of the best books discussed here is The Lexus and the Olive Tree: Understanding Globalization (1999). Author Thomas L. Friedman has two Pulitzer Prizes and one National Book Award and has worked for many years for the New York Times. Most noticeable about his writing is his wonderful way with metaphors, of which the Lexus and the Olive Tree are but two, powerfully contrasted.

Although metaphors are generally regarded as forms of literary license and style — more common, perhaps, in journalism than in academia — Friedman uses them brilliantly to capture the major tensions between global forces. The resulting work, in contrast to the one-sided views of Hertz, is balanced and well reasoned, which is of real value to puzzled executives.

Friedman dates the globalization phenomenon from the fall of the Berlin Wall in 1989, which ended so dramatically the principle of division that had ruled the world since 1945, when the Iron Curtain descended. If the metaphor for the Cold War period was “the Wall,” the metaphor for globalization is “the Web.” “Your threats and opportunities increasingly derive from whom you are connected to,” Friedman writes. Hence the overnight failure of 56 of Thailand’s 58 investment houses, all doomed by the falling baht and the withdrawal of American funds. “Globalism is the triumph of free-market capitalism. The technologies driving globalism are computerization, miniaturization, digitization, satellite communications, fiber optics and the Internet, which reinforce its defining perspective of integration,” argues the author.

Friedman uses opposing metaphors to create a powerful play of ideas. Whereas the defining measurement of the Cold War was “weight” (e.g., the throw weight of missiles), the defining measurement of globalism is “speed.” The defining question used to be, Whose side are you on? Now it is, Who are you connected to? There are similar shifts between “Big Missile” and “Fast Modem,” “The Treaty” and “The Deal,” “Taming Capitalism” and “Unleashing” it.

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