IT'S GLOBALICIOUS!
Two servings, half-baked, of the new economy

By Thomas Frank

Discussed in this essay:

The Lexus and the Olive Tree: Understanding Globalization, by Thomas Friedman.
Farrar, Straus and Giroux. 394 pages. $27.50.
Building WEALTH: The New Rules for Individuals, Companies, and Nations in a Knowledge-Based Economy, by Lester Thurow.
HarperCollins. 301 pages. $27.50.

By now most of us have figured out that there's nothing all that new about the "New Economy" and "globalization." We understand that these ringing phrases actually refer to something rather antique: a hopped‑up capitalism stripped of the various reforms and regulations it accreted over the course of the twentieth century. What will surprise readers of The Lexus and the Olive Tree and Building WEALTH is the intellectual contortions through which even respected writers like Thomas Friedman and Lester Thurow will put themselves in order to win for themselves, through a sort of cosmic optimism about all things dotcom, the coveted and profitable title of Most Enthusiastic Pundit. It's as though our national intellectual life had somehow been pegged to the insanely rising Dow, as though each advance on Wall Street were a go‑ahead for a new round of ecstatic superlatives in our social criticism.

Friedman, who is the foreign affairs columnist for the New York Times, aims not merely to describe "globalization" for us in his much‑celebrated and best‑selling new book but to help us "understand" it, by which he apparently means hammering into our heads the notion that "globalization" is the end object of human civilization and will undoubtedly make us rich, set us free, and elevate everything and everyone everywhere. However familiar this incantation has become, one cannot help but be startled by the massive escalation of rhetoric in which this now‑official wisdom is expressed. So grandiose is the tone of arrogance Friedman adopts that one suspects he has taken leave of his senses.

Much of Friedman's millennial enthusiasm arises from the mundane faith that capitalism is functionally identical to democracy. He tells us of the "Democratization of Technology," in which we all get computers and telephones; he marvels at the "Democratization of Finance, in which we all get to invest in everything; he paints for us a miraculous "Democratization of Information," in which we get more TV channels than ever before. All of these forces, he asserts, have combined to subvert top-down hierarchies of all kinds, whether Soviet, Indonesian, or old‑style American corporate. It's not long before he's hailing the Internet as both the most democratic thing on earth and the very "model of perfect competition." Astride Friedman's path, though, stand such blatant errors of fact that one wonders how they were not spotted by his editors. He repeatedly and mysteriously implies that the welfare state and regulatory policies instituted in the 1930s were in fact somehow brought about by the pressures of the Cold War; he incorrectly asserts that "in the old days" foreign securities "were never traded on an open market," whereas now "you and me and my Aunt Bev" can all buy South American bonds, which of course figures as spectacular evidence of the Democratization of Ownership (I guess Friedman has never heard about the infamous Peruvian bonds that were sold to all manner of middle Americans in the 1920s). But let's allow those to pass for the moment. Error is one thing; deliberate propaganda is quite another.

Shall we start with the car and the tree that are counterposed in Friedman's title? These are meant to refer to excellent globalizing economic forces on the one hand and foolish backward regionalism on the other. It's not an original image‑‑one thinks immediately of Benjamin Barber's infinitely more balanced 1995 treatment of the same subject, Jihad vs. McWorld‑‑but Friedman gives no sign that he has read any of the sophisticated expressions of doubt about capitalism or globalization in recent years (the books by William Greider, for example, or Edward Luttwak, or Doug Henwood). Under no circumstances can skepticism about markets be permitted a reasonable articulation, and so he insists on attributing it exclusively to dictators, bigots, "politicians' " the French, and other traditional targets of American loathing. On the other side of the coin are the various customs of capitalism, which Friedman describes in an embarrassingly wonder-filled style: In American barbershops they're talking about the Thai currency! Individuals everywhere are "super‑empowered"! The Japanese are building really fine cars‑and it's globalorious! Nothing tells the story so well as the book's cover, which, with its raised golden lettering and its rendering of orangey dawn breaking over the globey globe, reminds one of a popular religious tract.

Like day traders running up the price of Amazon.com shares, Friedman simply identifies the various fad ideas of the last ten years and bids them up a little more. Take Friedman on countries other than the United States: in one chapter he imagines the nations of the world spread out before him like so many stock listings in the daily newspaper; he recommends that we "buy" some and "sell" others. His definition of democracy is a simple matter of "one dollar, one vote," a system in which the market and corporate interests rightly and naturally get to dictate to everyone else. Thus even as Friedman whoops it up for The People he takes pains to note that the real boss, the market, will not tolerate any sort of political activity beyond its very narrow spectrum of permissible beliefs. No country that wishes to participate in the global gloriosity will be allowed to regulate its markets or provide for its unfortunates beyond what Friedman deems appropriate; he even describes the various punishments that the wrong sort of voting might bring down on a country, as investors "stampede away" and stock markets crash.

Most revealing is Friedman's understanding of the United States itself, a country in whose image markets quite naturally wish to remake the world. In a closing chapter Friedman asks us to wonder with him at how "a visionary geo-architect" (i.e., God) would go about designing the ultimate nation, how He would insist that it have "the most flexible labor market in the world," that all manner of rebellions and zany lifestyle accessories be tolerated in the boardroom as the signs of creativity that they are, that corporate managements be allowed "to hire and fire workers with relative ease." Evidently it's not enough anymore to claim, as Rockefeller did, that "God gave me my money"; in passages like these Friedman is virtually asking us to imagine God ghostwriting the Tom Peters books, God descending from the heavens to bust PATCO, to pass the Taft‑Hartley Act over Truman's veto, to send in the strikebreakers, to make Manpower the largest employer in the land.

In stylistic terms the book seems to belong to that genre of madly triumphalist TV commercial that the software and brokerage industries have been running in recent years, and Friedman quotes such commercials throughout his book‑not as examples of transparent efforts to sell something but as particularly compelling and truthful bits of shamanistic soothsaying that he evaluates only by appending his fervent amens. That Charles Schwab commercial in which regular people talk about how they bought shares in one company or another? Right on! That Merrill Lynch ad that claims "The World Is 10 Years Old"? Exactly!

Thomas Friedman may write like a TV commercial, but he proudly informs us that he thinks like a "hedge fund manager." And when future students of the 1990s seek to categorize his book they will be tempted to understand it as a contribution to that popular genre of business writing known as "futurism," a literature marked by its gawking talk about the ever4ricreasing rate of "change," its ranks of neologisms, and its homegrown metanarratives. But what Friedman has actually written is a dictionary of the shibboleths of our time, awesome in its inclusiveness. They're all there: the de, sire to "rebrand" Britain, casual badmouthing of France for its efforts to retain its welfare state, facile equating of Great Society America with the Soviet Union. Each of them is foolish, and monstrous in its own way; thrown together they leave a truly dispiriting impression. I can only compare the sensation of reading The Lexus and the Olive Tree to the first time I heard Newt Gingrich speak publicly and it began to dawn on me that this is what the ruling class calls thinking, that this handful of pathetic, palpably untrue prejudices are all the ruling class has to guide it as it shuttles back and forth between the State Department and the big think tanks, discussing what it means to do with us and how it plans to dispose of our nation.

Competition among pundits is heating up, though, and Thomas Friedman can't expect to hold the title of the new global order's most fervent celebrator for too long. MIT economist Lester Thurow's new book, Building WEALTH (yes, it's in all caps‑all the way through the book), seems to have sprung from a simple desire to run up the hyperbole averages just a little higher. In a few months the Dow will be sailing off into uncharted five-digit expanses, and it seems only fitting that a well‑known economist should try his hand at the epiphanic, orgiastic style that is clearly becoming one of the trademark literary gestures of this unhappy fin de siècle.

Unfortunately, Thurow doesn't pull it off with anywhere near the wonderment mustered by Friedman. However he may cheer for the great god Creativity or whisper about the all-destroying Entrepreneur, the economic facts to which he is professionally bound keep getting in the way. Several of the alarming declarations with which the book begins have been contradicted by its end, and although Thurow (like Friedman) makes a fearsome show of calling down the fire of the free‑market heavens on those welfare‑stating Europeans, he has acknowledged before long that in some crucial ways they may have the numbers on us.

Like Lexus, Building WEALTH is superficially organized as a sort of layman's guide to the "third industrial revolution" upon which the author believes that we have embarked. But Thurow has come to evangelize rather than to narrate, to tell us why it is that everyone on earth must come around to his way or suffer the hideous consequences. Whenever this simple impulse gets him into a jam, Thurow simply pulls out the concept of "inevitability," a handy logical atom bomb over which he seems to believe that he and his fellow New Economy ideologues enjoy an unquestioned monopoly. Genetic engineering will "inevitably" triumph over its doubters; "trying to defend" old standards of income equality "is impossible"; "all of Europe is an also‑ran" in the "new man-made brainpower industries of the twenty‑first century." Building WEALTH is, in this respect, one long study in the technique of selling what is in many ways a backward social system by enthusiastically announcing it to be the way of the future‑a rhetorical maneuver we haven't seen so much of on these shores since the heyday of old‑school Marxism.

But the working class, whose triumph once seemed so certain, appears in Building WEALTH only as a hapless victim, stripped of any historical agency whatsoever. No, the makers of history here are the billionaires, upon whom Thurow fastens with a curious obsessiveness. Just a few pages into Building WEALTH he commences an ode to the rich and their virtues that matches anything in the history of the Republic for sheer, irony‑free obsequiousness.

Great wealth allows individuals to place their footprints in the sands of time....

Political influence can be quietly bought. Campaign contributions effectively give the wealthy more than one vote....

Those with great wealth are important, to be courted. They are deserving of respect and demand deference. They are the winners.

Wealth ... is the only game to play if you want to prove your mettle. It is the big leagues. If you do not play there, by definition you are second rate.

Thurow has excellent reason for establishing the godliness of the wealthy early on. When the traditional tools of economic measurement don't serve his celebratory narrative‑most notably on the issue of productivity: it seems that dam Web isn't changing everything as much as the TV commercials say it is!—he rolls out a nifty index of his own invention: How many billionaires are there? As evidence of his assertion that "America is back!" Thurow offers the fact that "the world's wealthiest man is once again an American," that "American billionaires number in the hundreds." Asian economic error, meanwhile, is nailed down by the observation that "what had been forty‑one Japanese billionaires fell to only nine at the most recent count." And to persuade us that we should welcome cultural and economic "disequilibrium," Thurow confides that in such a state "billionaires could emerge." Although Thurow doesn't take his logic much further than this, one could easily posit a billionaires‑to‑earnings ratio and conclude that by far the most laudable economic endeavors are the launching of Internet IPOs. Thurow, by the way, is on the board of day‑trading propagandist E*Trade.

Building billionaires, then, is what all our labor is about, and having piled up such a prodigious amount of the stuff that makes life worth living at the feet of Bill Gates, we Americans, in Thurow's telling, have decided to remake both our society and the outside world so that this magical operation might be repeated again and again. Unfortunately, the price of building billionaires is very, very high: to make them sufficiently rich, in fact, we must do nothing less than "destroy the old," a line Thurow repeats like a mantra throughout his text. So crucial is wreaking this destruction‑on culture, on institutions, on the assumptions of the past‑that he sees it as the very nature of entrepreneurship and the organizing principle of society: "Social systems have to be built that give entrepreneurs room to destroy the old."

Destroying the way we live just so we can have more billionaires doesn't sound like a great bargain on the surface. And one of the better features of Thurow's book is that, unlike Friedman, he is occasionally willing to admit that other interpretations of recent economic events are just as plausible as his millennialist account. The stock market runup might be a mere bubble; the making of billionaires might be a sign not of society's health but of its illness. These passages, though, are quickly forgotten as Thurow gets back to what he does best: casually tossing off all manner of staggering assertions about history, society, and the national character of various peoples as proof that (a) we don't have a choice and (b) we aren't good Americans if we don't join him on his knees before the billionaires. This latter tendency is particularly annoying. For Thomas Friedman, employers' ability to fire workers at will is ordained by God; for Lester Thurow, it's an "American‑style right" with "no notice, no severance pay, no justification necessary." And the massive concentration of wealth that has emerged over the last two decades? For Thurow, that, too, is just our nature. America is a land "comfortable with inequalities," a place where one man having as much as nearly half the population (think about that one the next time you feel the phrase "American democracy" forming on your lips) doesn't lead "anyone of importance to suggest that Americans ought to change the system."

In Thurow's telling, history is almost always quaint and ancient, and it almost always comes with an easily deciphered moral: fifteenth‑century China proves this; turn‑of‑the-century Russia proves that. When Thurow finally breaks down and acknowledges the last sixty years of our own nation's history, it's all stereotype and History Channel voice‑over. In his accounting of the postwar period, for example, the United States somehow prevailed alone against an entirely red globe; those treasonous British, you see, elected a Labour government, and "In the 1950s, all of the third world believed in the communist model of development." Add to the bad history and the mad generalizations Thurow's curious refusal to include his footnotes in the book (we're supposed to took them up online) and a persistent problem with spelling and subject‑verb agreement, and one can almost get outraged about this stuff. Even an economist, one feels, should have had the courtesy to run spell-check before calling for the end of Western civilization.