Every once in a while when I am traveling abroad, I need to indulge in a burger and a bag of McDonald's french fries. For all I know, I have eaten McDonald's burgers and fries in more countries in the world than anyone, and I can testify that they all really do taste the same. But as I Quarter-Poundered my way around the world in recent years, I began to notice something intriguing. I don't know when the insight struck me. It was a bolt out of the blue that must have hit somewhere between the McDonald's in Tiananmen Square in Beijing, the McDonald's in Tahrir Square in Cairo and the McDonald's off Zion Square in Jerusalem. And it was this:

No two countries that both had McDonald's had fought a war against each other since each got its McDonald's.

I'm not kidding. It was uncanny. Look at the Middle East: Israel had a kosher McDonald's, Saudi Arabia had McDonald's, which closed five times a day for Muslim prayer, Egypt had McDonald's and both Lebanon and Jordan had become McDonald's countries. None of them have had a war since the Golden Arches went in. Where is the big threat of war in the Middle East today? Israel-Syria, Israel-Iran and Israel-Iraq. Which three Middle East countries don't have McDonald's? Syria, Iran and Iraq.

I was intrigued enough by my own thesis to call McDonald's head- quarters in Oak Brook, Illinois, and report it to them. They were intrigued enough by it to invite me to test it out on some of their international executives at Hamburger University, McDonald's in-house

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research and training facility. The McDonald's folks ran my model past all their international experts and confirmed that they, too, couldn't find an exception. I feared the exception would be the Falklands war, but Argentina didn't get its first McDonald's until 1986, four years after that war with Great Britain. (Civil wars and border skirmishes don't count: McDonald's in Moscow, El Salvador and Nicaragua served burgers to both sides in their respective civil wars.)

Armed with this data, I offered up "The Golden Arches Theory of Conflict Prevention," which stipulated that when a country reached the level of economic development where it had a middle class big enough to support a McDonald's network, it became a McDonald's country. And peopIe in McDonald's countries don't like to fight wars any more, they preferred to wait in line for burgers.

Others have made similar observations during previous long periods of peace and commerce-using somewhat more conventional metaphors. The French philosopher Montesquieu wrote in the eighteenth century that international trade had created an international "Grand Republic," which was uniting all merchants and trading nations across boundaries, which would surely lock in a more peaceful world. In The Spirit of the Laws he wrote that "two nations who traffic with each other become reciprocally dependent; for if one has an interest in buying, the other has an interest in selling; and thus their union is founded on their mutual necessities." And in his chapter entitled "How Commerce Broke Through the Barbarism of Europe," Montesquieu argued for his own Big Mac thesis: "Happy it is for men that they are in a situation in which, though their passions prompt them to be wicked, it is, nevertheless, to their interest to be humane and virtuous."

In the pre-World War I era of globalization, the British writer Norman Angell observed in his 1910 book, The Great Illusion, that the major Western industrial powers, America, Britain, Germany and France, were losing their taste for war-making: "How can modern life, with its over-powering proportion of industrial activities and its infinitesimal proportion of military, keep alive the instincts associated with war as against those developed by peace?" With all the free trade and commercial links tying together major European powers in his day, Angell argued that it would be insane for them to go to war, because it would destroy both the winner and the loser.

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Montesquieu and Angell were actually right. Economic integration was making the cost of war much higher for both victor and vanquished, and any nation that chose to ignore that fact would be devastated. But their hope that this truth would somehow end geopolitics was wrong. Montesquieu and Angell, one might say, forgot their Thucydides. Thucydides wrote in his history of the Peloponnesian War that nations are moved to go to war for one of three reasons - "honor, fear and interest" - and globalization, while it raises the costs of going to war for reasons of honor, fear or interest, does not and cannot make any of these instincts obsolete-not as long as the world is made of men not machines, and not as long as olive trees still matter. The struggle for power, the pursuit of material and strategic interests and the ever-present emotional tug of one's own olive tree continue even in a world of microchips, satellite phones and the Internet. This book isn't called The Lexus and the Olive Tree for nothing. Despite globalization, people are still attached to their culture, their language and a place called home.

And they will sing for home, cry for home, fight for home and die for home. Which is why globalization does not, and will not, end geopolitics. L-et me repeat that for all the realists who read this book: Globalization does not end geopolitics.

But it does affect it. The simple point I was trying to make-using McDonald's as a metaphor-is that today's version of globalization significantly raises the costs of countries using war as a means to pursue honor, react to fears or advance their interests. What is new today, compared to when Montesquieu and even Angell were writing, is a difference in degree. Today's version of globalization-with its intensifying economic integration, digital integration, its ever-widening connectivity of individuals and nations, its spreading of capitalist values and networks to the remotest corners of the world and its growing dependence on the Golden Straitjacket and the Electronic Herd-makes for a much stronger web of constraints on the foreign policy behavior of those nations which are plugged into the system. It both increases the incentives for not making war and it increases the costs of going to war in more ways than in any previous era in modern history.

But it can't guarantee that there will be no more wars. There will always be leaders and nations who, for good reasons and bad reasons, will resort to war, and some nations, such as North Korea, Iraq or Iran,

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will choose to live outside the constraints of the system. Still, the bottom line is this: If in the previous era of globalization nations in the system thought twice before trying to solve problems through warfare, in this era of globalization they will think about it three times.

Of course, no sooner did the first edition of this book come out, in April 1999, than nineteen McDonald' s-laden NATO countries undertook air strikes against Yugoslavia, which also had McDonald's. Immediately, all sorts of commentators and reviewers began writing to say that this proved my McDonald's theory all wrong, and, by implication, the notion that globalization would affect geopolitics. 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 both professionally and psychologically threatened by the idea that globalization and economic integration might actually influence geopolitics in some very new and fundamental ways. Many of these critics were particularly obsessed with the Balkans precisely because this old-world saga, in which politics, passion and olive trees always takes precedence over economics and the Lexus, is what they knew. They were so busy elevating the Balkans into a world historical issue, into the paradigm of what world politics is actually about, that they failed to notice just what an exception it was, and how, rather than spreading around the world, the Balkans was isolated by the world. They were so busy debating whether we were in 1917, 1929 or 1939 that they couldn't see that what was happening in 2000 might actually be something fundamentally new-something that doesn't end geopolitics but influences and reshapes it in important ways. These critics, I find, are so busy dwelling on what happened yesterday, and telling you what will happen someday, that they have nothing to say about what is happening today. They are experts at extrapolating the future from the past, while skipping over the present. It's not surprising this group would be threatened by the McDonald's argument, because, if it were even half true, they would have to adapt their world views or, even worse, learn to look at the world differently

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and to bring economics, environment, markets, technology, the Internet and the whole globalization system more into their analyses of geopolitics.

My first reaction to these critics was to defensively point out that NATO isn't a country, that the Kosovo war wasn't even a real war and to the extent that it was a real war it was an intervention by NATO into a Civil war between Kosovo Serbs and Albanians. And I pointed out that when I posited my original McDonald's theory I had qualified it in several important ways: the McDonald's theory didn't apply to civil wars, because, I explained, globalization is going to sharpen civil wars within countries between localizers and globalizers - between those who eat the Big Mac and those who fear the Big Mac will eat them. Moreover, the theory was offered with a limited shelf life, because, I said, sooner or later virtually every country would have McDonald's, and sooner or later two of them would go to war.

But I quickly realized that no one was interested in my caveats, the fine print or the idea that McDonald's was simply a metaphor for a larger point about the impact of globalization on geopolitics. They just wanted to drive a stake through this Golden Arches Theory. So the more I thought about the criticism, the more I told people, "You know what, forget all the caveats and the fine print. Let's assume Kosovo is a real test, Let's see how the war ends." And when you look at how the war ended you can see just how much the basic logic of the Golden Arches Theory still applies.

Here's why: As the Pentagon will tell you, airpower alone brought the 1999 Kosovo war to a close in seventy-eight days for one reason- not because NATO made life impossible for the Serb troops in Kosovo. Indeed, the Serbian army ended up driving most of its armor out of Kosovo unscathed. No, this war ended in seventy-eight days, using air- power alone, because NATO made life miserable for the Serb civilians in Belgrade. Belgrade was a modem European city integrated with Western Europe, with a population that wanted to be part of today's main global trends, from the Internet to economic development-which the presence of McDonald's symbolized.

Once NATO turned out the lights in Belgrade, and shut down the power grids and the economy, Belgrade's citizens almost immediately demanded that President Slobodan Milosevic bring an end to the war, as

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did the residents of Yugoslavia's other major cities. Because the air war forced a choice on them: Do you want to be part of Europe and the broad economic trends and opportunities in the world today or do you want to keep Kosovo and become an isolated, backward tribal enclave: It's McDonald's or Kosovo-you can't have both. And the Serbian people chose McDonald's. Not only did NATO soldiers not want to die for Kosovo-neither did the Serbs of Belgrade. In the end, they wanted to be - part of the world, more than they wanted to be part of Kosovo. They wanted McDonald's re-opened, much more than they wanted Kosovo re-occupied. They wanted to stand in line for burgers, much more than they wanted to stand in line for Kosovo. Airpower alone couldn't work in Vietnam because a people who were already in the Stone Age couldn't be bombed back into it. But it could work in Belgrade, because people who were integrated into Europe and the world could be bombed out of it. And when presented by NATO with the choice-your Lexus or your olive tree?-they opted for the Lexus.

So, yes, there is now one exception to the Golden Arches Theory - an exception that, in the end, only proves how powerful is the general rule. Kosovo proves just how much pressure even the most olive-tree-hugging nationalist regimes can come under when the costs of their adventures, and wars of choice, are brought home to their people in the age of globalization because in a world where we all increasingly know how each other lives, where governments increasingly have to promise and deliver the same things, governments can ask their people to sacrifice only so much. When governments do things that make economic integration and a better lifestyle-symbolized by the presence of McDonald's - less possible, people in developed countries simply will not tolerate it for as long as they did in the past. Which is why countries in the system will now think three times before going to war and those that don't will pay three times the price. So let me slightly amend the Golden Arches Theory in light of Kosovo and what are sure to be future Kosovos. I would restate it as follows: People in McDonald's countries don't like to fight wars anymore, they prefer to wait in line for burgers-and those leaders of countries which ignore that fact will pay a much, much higher price than they think.

On July 8, 1999, USA Today ran a story from Belgrade that caught my eye. It was about the economic devastation visited on Yugoslavia as a

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result of the war. The story contained the following two paragraphs, which, had I written them myself, people would have insisted I made them up:

"Zoran Vukovic, 56, a bus driver in the city of Niw , earns the equivalent of $62 a month, less than half his salary before the war. The [Serb] government laid off almost half of the roughly 200 drivers last month. The rest had their salaries slashed. With the state controlling the price of food, Vukovic and his eight dependents can survive. But most extras are simply out of the question.

"'McDonald's is now only a dream,' says Vukovic, who used to take his three grandchildren to the Belgrade outlet. 'One day, maybe, everything will be O.K. I just don't think it will be in my lifetime.' "

…..

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The Golden Arches Theory highlights one way in which globalization affects geopolitics-by greatly raising the cost of warfare through economic integration. But globalization influences geopolitics in many other ways. For instance, it creates new sources of .power, beyond the classic military measures of tanks, planes and missiles, and it creates new sources of pressure on countries to change how they organize themselves, pressures that come not from classic military incursions of one state into another, but rather by more invisible invasions of Supermarkets and Super-empowered individuals.

The best way to see this is to take a region, such as the Middle East, and look at it from a multidimensional globalist point of view. You start to see some very interesting things.

In the fall of 1997, I was visiting Israel. The peace process was at a particularly low point, but I happened to notice a story in the business section of the paper reporting that foreign investment in Israel was as strong as ever. This intrigued me, so I went to see Jacob Frenkel, the governor of the Central Bank, and asked him the following question: "How

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is it that the peace process can be going down and foreign investment in Israel be going up?"

The answer that Frenkel and I came up with was that Israel today was rapidly moving away from its old economy of oranges, diamonds and textiles toward a high-tech economy that, in some ways, made Israel much less vulnerable to Arab political pressures, terrorism, boycotts and the ups and downs of the peace process, while making Israel much more vulnerable to a conventional war. Here's why: In the old days Israel grew oranges, Morocco grew oranges, Spain grew oranges. So if a country such as Japan or France was upset with some Israeli policy on the West Bank it could easily punish Israel by buying someone else's oranges. But what happens when an Israeli company, Galileo Technology, Ltd., is the inventor of the single-chip Ethernet switch used in many intranet data communications systems? You can't get those from Morocco. What happens when Israeli companies start to dominate a key high-tech sector, such as online encryption tools for Internet security, which are built around complex algorithms developed in the Technion and Israeli Army? You can't get those from Spain. What happens, as a result, is that everyone comes courting Israel, no matter what the state of the peace process. Every major American high-tech company has a branch in Israel-Intel just put in a $1.5 billion chip plant - or owns part of an Israeli computer company. Japan, which always shied away from Israel, fearing Arab retaliation, is now the second largest venture: capital investor in Israel, after the United States. Japan is weak in software design and today is gobbling up Israeli software companies. I find this particularly amusing since, when I was the New York Times correspondent in Jerusalem in the mid-1980s, the only Japanese car you could buy in Israel was a tin-bucket Daihatsu or a low-end Subaru. Japan, Inc., would only sell its really good cars to the Arabs. Not anymore. You can get any Lexus you want in Israel today, because in economic terms, Israel today is a bigger energy exporter than Saudi Arabia. That is, by exporting software, chips and other high-tech innovations Israel is exporting the power sources of today's information economy, and every country wants that power, no matter what Israel is doing to the Palestinians, just as they wanted the oil in the 1970s no matter what the Arabs were doing to the Jews. This has real geopolitical significance. Just look at the numbers. In 1998, China had 52 scientists doing research at

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Israel's renowned Weizmann Institute. India also had 52. Two countries that would not touch Israel in the 1970s are now dying to send their scientists there.

Another reason Israel is less vulnerable to low-level pressures is that high-tech knowledge exports tend to be very light and not easy to disrupt. Some are exported by modem. High-tech investment in Israel is also largely in people, and brainpower, not in factories that can easily be destroyed. Also, Israel's high-tech exports go not to its neighbors, with whom it is in tension, but to faraway markets in Asia, Europe and North America. In fact, most Israeli high-tech firms sell virtually nothing in the. Israeli or Middle Eastern markets, so they are not that vulnerable to the region's politics. It is not an accident that the Tel Aviv Hilton decided in the 1990s to put in a sushi bar, not an Arab restaurant. Israeli high-tech companies also raise most of their capital on Wall Street or from venture capital firms in Silicon Valley and are not dependent on the Tel Aviv Stock Exchange. And the latest trend now is for Israeli high-tech companies to co-locate their operations, with a branch in Silicon Valley and a branch in Israel. Check Point, an Israeli company that controls about 50 percent of the Internet security market for firewalls to protect information, has an office and research arm in Israel and pays some taxes there, but now also has an office in Silicon Valley, close to the market. A Wall Street analyst I know who covers Israel's high-tech industry told me she now spends more time going to California to cover Israeli companies than to Tel Aviv.

For all these reasons, though, Israel is more vulnerable in another way. While Israel is developing a knowledge economy, knowledge workers are very mobile and like to live in nice places. If the key knowledge workers in Israel decide that the situation has reached an intolerable point-because of a never-ending conflict or religious discord-they will leave, or they will locate more and more of their operations outside Israel. Such a situation is still a long way off, but it is no longer unthinkable. With a $ 17,000-a-year per capita income, Israel today has a standard of living close to England's. Israel is a McDonald's country. If an Israeli Prime Minister ever called on Israeli boys to go back and recapture parts of the West Bank or Gaza in what appeared to be a war of choice but not survival, a lot of Israeli knowledge workers would be out the door.

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Obviously, if someone who is not plugged into the herd, such as Saddam Hussein or some terrorists, gets hold of a nuclear weapon and drops it on Israel, it won't matter how high- or low-tech its economy is. Military power still matters. But I believe the nonmilitary power gap between Israel and the Arabs is going to grow wider and faster in the coming decade, if Israel is able to put the Israeli-Palestinian conflict behind it. When all you have to offer the world is cheap labor or oil, as tends to be the case with most Arab states, you are limited by the size of your labor pool and the price of oil. But when you have an economy that has chosen prosperity and is able to assemble knowledge, capital and resources from allover the world, you are not limited by your size anymore, and Israel is not limited by its size anymore. Historically there have been two river powers in the Middle East: Egypt on the Nile and Mesopotamia on the Tigris and Euphrates. In the twenty-first century, I believe, there will be a third river power emerging: Israel on the Jordan. Israel will be a high- tech locomotive that will pull Jordan and the Palestinians along with it. Already Siemens has linked up its Israeli factory, Siemens Data Communications, near Haifa, and a Siemens team of Palestinian systems engineers in the West Bank town of Ramallah, with Siemens headquarters back in Germany. It's just the beginning.

Article Citation:

Friedman, Thomas. 2000. The Lexus and The Olive Tree: Understanding Globalization. New York: Anchor Books.