- Electronic herd
The Electronic Herd is a term coined by
Thomas Friedman in his bookThe Lexus and the Olive Tree . The term covers two different sub-groups; Short-horn cattle and Long-horn cattle.hort-Horn Cattle
Short-horn cattle represents all the stock, bonds and currency traders around the world. Whether they are individual traders; currency traders; mutual, pension and hedge funds; insurance companies or bank trading rooms. They are known as short-horn cattle because they move money around the world, often on a very short-term basis.
Long-Horn Cattle
Long-horn cattle represents the large multi-national corporations e.g. General Electric, General Motors, IBM, Intel, Siemens etc, which increasingly invest in or move production to foreign countries. They are known as long-horn cattle because they have to make long term commitments when investing.
Effects of the Herd
Friedman, linking the herd with globalization, suggests that it cannot be stopped without a huge cost to each society and its prospects of growth. Also, globalization and the effects of the herd are things that no one intentionally created (112). The Herd has changed the idea that existed in the pre-1970s Cold War system that a government's own monetary policy completely dominated the setting of its own interest rates and a government's fiscal policy was far and away the dominant instrument for stimulating growth. [These closed economies had capital controls, tariffs to protect domestic national corporations, and tightly controlled the value of their currencies] (115).
The Herd has been able to play one developing country off of each other because that developing country lives under the fear of a "no-confidence vote from the herd" (134). The fact that this competition exists between these countries in order to produce the most stable, inviting and attractive environments for the herd makes them able to indirectly control the economic policies of the governments(139). Friedman claims that all of the world leaders have now been reduced to governors, and their main job is to entice the herd into investing in their states(139).
Wikimedia Foundation. 2010.
