Globalization's Boosters and Critics.

• Author: Heilbrunn, Jacob

Thomas Friedman, The Lexus and the Olive Tree: Understanding Globalization (New York: Farrar, Straus & Giroux, 1999), 394 pp., $27.50.

John Gray, False Dawn: The Delusions of Global Capitalism (New York: New Press, 1999), 262 pp., $25.

In the early 1990s, many American politicians and economists viewed Germany and Japan as emerging superpowers that were well on their way to supplanting the United States. The chastened former Axis powers, so the thinking went, had figured out that economic, not military, power was the key to success. They were investing in their infrastructures and educating their work forces for the era of globalization, while America, by contrast, was foolishly racking up higher and higher budget deficits - partly as a consequence of military spending for its protectorates in Europe and Asia - and creating, at best, dead-end McDonald's-type jobs. In his 1992 bestseller Head to Head, MIT economist Lester Thurow captured one version of the conventional wisdom: "Future historians will record that the 21st century belonged to the House of Europe."

Seven years later, the opposite seems to be the case. In the wake of the American-led incursion into Kosovo, Europe is scrambling to create its own joint military force and has watched helplessly as the euro plummets. Matters are even worse in Asia. Japan is stuck in a recession that its own Prime Minister Keizo Obuchi has recently called a "depression", and Tokyo bureaucrats have been left fuming impotently as Treasury Secretary Lawrence Summers periodically lectures them about the virtues of the American model. Under President Clinton and Federal Reserve Chairman Alan Greenspan's direction, the United States has eliminated its chronic budget deficits, created fourteen million new jobs since 1991, and enjoyed low interest rates and low unemployment, thereby vanquishing the old bugbear of "stagflation." Prosperity has not only allowed Americans to go on an unprecedented spending binge, but probably also saved President Clinton during impeachment. Indeed, so impressive has the American resurgence been that it would be absurd to quarrel with newspaper magnate Mortimer B. Zuckerman's judgment that globalization will help ensure "a second American century."

Or would it? Doubts about the effects of globalization, whether they end up proving justified or not, have become increasingly commonplace. In the United States, first Ross Perot, then Patrick Buchanan tapped into the domestic discontent of blue-collar workers spurned by a Clinton administration focused on free trade and the middle class. Most recently, a United Nations study suggests that while globalization may benefit the United States - the annual sales of General Motors, we learn, are greater than the gross domestic products of Thailand or Norway, while Ford generates more income than Saudi Arabia - much of the world is being left behind. And so, if the debate was once about whether America was headed for the skids, it is now about whether globalization will simply trigger an anti-American backlash.

On the one side is the triumphalist camp, which includes everyone from the Clinton administration to Zuckerman to Sebastian Mallaby in the pages of The National Interest. The triumphalists see the United States as poised to spread its institutions and values around the globe. On the other side are the debunkers, who view the United States as intoxicated by the idea of a new crusade on behalf of the free market and democracy. Globalization will only ride roughshod over small communities and identities, substituting an empty Western materialism for local traditions. This school includes academics such as Samuel Huntington, who has argued that "the essence of Western civilization is the Magna Carta not the Magna Mac. . . . What, indeed, does it tell the world about the West when Westerners identify their civilization with fizzy liquids, faded...