RECENT NONFICTION

Thomas L. Friedman, The Lexus and the Olive Tree, Anchor Books (updated and expanded edition), 475 pp.

The "Lexus" in Thomas Friedman's title refers to the luxury Japanese car made almost entirely by computerized robots, the technology of the future, according to Friedman. The "olive tree" refers to the conflict over land that marks the modern history of the Middle East. To Friedman, it symbolizes the enduring hold of tradition and the past. Friedman acknowledges its good aspects, like community and a sense of place; but he also recognizes that closed-minded provincialism engenders a fear and hatred of outsiders and "the other," and that racial, ethnic, and religious conflict often results.

In this exasperating but important book, Friedman effectively makes the conventional liberal case for globalization and free market capitalism as the most effective way of organizing society. He didn't persuade me and he probably won't persuade you. But if we are going to challenge this vision, we are going to have to understand what we are up against and (a bitter pill) accept those of Friedman's assumptions that, unfortunately, have the ring of truth.

According to Friedman, we are at the beginning of a technological revolution that, like the Industrial Revolution, will utterly transform the way people live. Alas, he is probably right. Dot.coms and internet start-ups may rise and fall, but the impact of digital technology will forever change the way people communicate and do business.

The most important aspect of this revolution is the way the financial community can now, with the click of a mouse, transfer money anywhere in the world. Using internet technology to invest money wherever the prospects of profit are greatest, the "electronic herd" (as Friedman calls the financial community) has the power to make or break communities and countries. As Friedman argues (effectively, I believe), there can be no turning back.

Friedman further proclaims that free market capitalism has triumphed and socialism is dead. Socialism may produce a rough equality, but it is entrepreneurial capitalism (and not command economics) that creates wealth. There are models of market socialism and cooperative enterprise that challenge this truth. But, for the moment at least, socialism, as the world has experienced it, is no longer high on any democratic agenda.

Friedman's premises are the conventional wisdom of Democrats like Bill Clinton and Al Gore. A dovish reporter who covered the Middle East for the New York Times and now writes the Times' column on foreign affairs, Friedman is a good stand-in for mainstream neo-liberal pols.

Unlike Republican, Social Darwinist, free-market ideologues, Friedman concedes the downside of global free-market economics. He readily admits that communities will be uprooted, cultures ravaged, and peoples' lives destroyed. Echoing the views of economist Joseph Schumpeter, Friedman hails capitalism's process of "creative destruction." "Those countries that are most willing to let capitalism quickly destroy inefficient companies, so that money can be freed up and directed to more innovative ones, will thrive in the era of globalization," Friedman writes.

Some good can come of this, I'll concede. That corporate and financial institutions have investments all over the world lessens the risk of war between fully-developed countries. Friedman asserts that countries that have McDonalds will not fight one another. I won't predict the inevitability of burger wars, but the social upheaval that the global free market provokes is sure to heighten social tensions. The income disparity (which Friedman acknowledges results from free-market capitalism) will surely lead the have-not majority to challenge the minority's ever-increasing power and wealth.

Friedman supports a social safety net to protect individuals and communities from the upheavals to come. But not at the expense of the innovation that free-market capitalism sets loose. I do not think that in this Friedman can have it both ways.

Friedman's optimism is that of cheerleader rather than analyst. Significantly, he interviews and quotes numerous partisans of free-market globalization, but caricatures the ideas of those who raise questions and criticisms. Friedman speaks of millions of investors and talks about the democratization of finance, as if small stockholders, day traders, and retired workers living off pension funds have any power to influence global markets. It's elite financial managers who wield the power to shape the economy of the world.

Friedman's idea of economic efficiency is, of course, bogus. It takes into account short-term profit, nothing else. The cost of environmental despoliation, social upheaval, and human misery are not computed by spreadsheet software. Technology might change, but important economic truths remain constant.

The public sector is expected (at least by liberals) to provide infrastructure for, and then pick up the pieces that follow, the private sector's creative destruction. But if the financial sector is intent on maximizing its return on investment, the public sector will be starved for money. I am not expecting a stock market crash (as opposed to market shake-outs and corrections), but deregulation and the defunding of the public sector is a recipe for disaster.

How then do we counter the economic revolution that Friedman describes?

We demonstrate against the institutions of global capitalism, yes; but we also need to articulate a vision of fair trade in which environmentalism and economic justice are valued more than short-term economic "efficiency" and the morally-sanctioned accumulation of wealth. Environmentalists and the labor movement have to think and act internationally -- much more than they are doing today.

We have to challenge the financial sector for control of pension funds and other assets. Those who own stocks and mutual funds have to make their presence felt at shareholder meetings. We need campaign finance reform that breaks the hold that corporate wealth has over everyday politics. That's just a beginning.

Capitalism has shown its ability to inspire technological innovation and adjust to economic change. Friedman's description of the current and future economy is depressing but real. The Nader campaign provides an opportunity to present an alternative vision, but Nader's strength has always been as a critic, in opposition. Globalization is here to stay. Our challenge is to present a humane and democratic alternative vision.

Marty Jezer, author of The Dark Ages: Life in the USA, 1945-1960 and Abbie Hoffman: American Rebel, writes from Brattleboro, Vermont.