The Lexus and the Olive Tree is a 1999 book by Thomas L. Friedman that posits that the world is currently undergoing two struggles: the drive for prosperity and development, symbolized by the Lexus, and the desire to retain identity and traditions, symbolized by the olive tree. He says he came to this realization while eating a sushi box lunch on a Japanese bullet train after visiting a Lexus factory and reading an article about conflict in the Middle East.





Friedman leads the reader on an international quest for a new understanding of the often misunderstood and misapplied term 'globalization' by tapping on to stories of his actual experiences in interfacing with many of the global movers and shakers. He proposes that 'globalization is not simply a trend or fad but is, rather, an international system. It is the system that has replaced the old Cold War system, and, like that Cold War System, globalization has its own rules and logic that today directly or indirectly influence the politics, environment, geopolitics and economics of virtually every country in the world.'





Friedman attempts to dissect, analyze and categorize this new international system, and explains it by introducing colorful new terms such as: Microchip Immune Deficiency; The Golden Straightjacket; The Electronic Herd; DOSCapital; The Backlash; The Groundswell.





Bestseller author Robert Kiyosaki on page 200 of his book 'Guide to Investing' enthusiastically recommends The Lexus and the Olive Tree to 'anyone wanting to understand the new era of global business we are in' and emphasizes the importance of the 'Electronic Herd' in the Asian Financial Crisis of 1997.





The 'Big Idea' in The Lexus and the Olive Tree is found on page 232 where Friedman explains that: 'if you can't see the world, and you can't see the interactions that are shaping the world, you surely cannot strategize about the world.' He states that 'you need a strategy for how to choose prosperity for your country or company.'





Perhaps the most famous theory presented in this book is the Golden Arches Theory of Conflict Prevention, which states: 'No two countries that both had McDonald's had fought a war against each other since each got its McDonald's'. (A variant of the democratic peace theory.)





However, an apparent contradiction exists due to the fact that Israel and Hezbollah were in a state of war beginning 1973 and had McDonald's franchises opened in 1995 and 1998, respectively, when both countries were still involved in an active war (which ended only with Israel's withdrawal in 2000). Hostilities began again in 2006.





In the 2000 edition of the book (ISBN 0-385-49934-5; Anchor Books), Friedman answered criticism of his theory as follows:





'I was both amazed and amused by how much the Golden Arches Theory had gotten around and how intensely certain people wanted to prove it wrong. They were mostly realists and out-of-work Cold Warriors who insisted that politics, and the never-ending struggle between nation-states, were the immutable defining feature of international affairs, and they were professionally and psychologically threatened by the idea that globalization and economic integration might actually influence geopolitics in some very new and fundamental ways.'[1]





He also explains how globalization can cause Brazilification -- the loss of the middle class and increase in income gap -- of countries impacted by the trend. Brazilification is a neologism included in Douglas Coupland's book Generation X.[2]