The Lexus and the Olive Tree

This chapter argues that that the USSR, the Southeast Asian countries, Brazil, China, GM, and IBM all either collapsed or had to restructure at the same time because of the same systemic change that tore down the Berlin Wall: Microchip Immune Deficiency Syndrome (MIDS), which is the “disease” of the globalization system. MIDS occurs when countries and companies fail to adapt to the changes brought about by the microchip and by the three democratizations. The only cure to MIDS is open information and a more even distribution of power.

The onset of MIDS has been a three-stage evolution. In the first stage, from World War One until the late-1970s, everything was protected because the three democratizations had not yet happened. The second stage took place during the 1980s, when the three democratizations destroyed this slow-moving world in what came to be known later as the “Information Revolution,” which was as fundamental a break as was the discovery as electricity. The Information Revolution lowered barriers to entry, which increased competition, as well as letting consumers more easily communicate their preferences to companies, or shift to ones that would give them what they wanted. This culminated with the internet, which is essentially a competitive world market.