The world is flat

“The World is Flat,” by Thomas Friedman, chronicles the influx of a large number of new players on the global economic stage that has created a strong force that is already starting to affect Americans. Friedman believes that these looming changes have the potential to produce both positive and negative results.

An example that illustrates the range of Friedman’s analysis is his argument about the impact of the dot-com bubble and its eventual bust. He suggests that although the bust was bad for some investors, it turned out to be good in opening up global markets. The overcapacity which produced the bust also produced very low prices for telecommunications, thereby enabling players from smaller economic regions to participate in a game usually reserved for bigger players.

Friedman describes several examples of different firms in these regions that have emerged to provide technology services to American business. One example, involving an Indian firm that does basic tax-return work for an American accounting company, reflects his view that although cost advantages are important, the real significance are the competitive proportions and innovations made possible by this new technology. One of the most important acumens of his book is that Americans should get used to the fact that the United States will not long remain the strongest player on the field. From my point of view, the United States have badly needed a good dose of humility, and these global shifts Friedman identifies promise to move us that way.

While many passages point toward the advent of a system of global cooperation where no one player claims dominance, many others assume a win-lose scenario, in which Americans will be dominated by the Indians and Chinese if they don’t get their act together. Friedman starts one of his chapters with a brief recounting of what happened to America’s previous world dominance in basketball, describing it as a great metaphor for what is happening in the global economy. Instead of grasping the new flatness of the global economic system, he wishes for the glory days when the United States was still head honcho. He writes too often as if the only choice Americans have is to play and win, or to be losers. This propensity is particularly self-evident in his frequent references to the determination of high-stakes competition. “There is no time to rest; we have to work harder; the Europeans are delinquent because they value having more holidays.” Friedman writes as though this is not an option, but there are choices, or there ought to be. If the current system diminishes many of those choices, perhaps we should change the system.

Globalization is about efficiency. But as Friedman admits, there’s more to it than that. He considers the stresses and downsides in globalization in the chapter titled “The Great Sorting Out,” but he still seems reluctant to seriously explore the consequences. Friedman seems unwilling to acknowledge that the system is significantly affected by global political structures or the absence thereof. For example, he mentions the need for the United States to develop an energy-independence policy, especially to cope with the expected huge increases in the demand for energy by China and India. But most of this discussion occurs in a chapter on how to jump-start American science and technology education so we can stay competitive.

Friedman does a pretty good job of acknowledging globalization’s impact on workers. He recognizes that the world is not yet really flat yet because there are still millions of people who are not able to compete in the global market. But he is still reluctant to point at structural problems. Friedman offers an evaluation of how the non-democratic political structures of the Middle East do not include much of the population who live there from the benefits of expansion and improvement.

I should think that we need more than hope; The United States needs to develop public policies that have global reach, that make certain that at least the key players are at the global dining table can cooperatively address some of the well-known problems. If the price of these policies produces a loss of efficiency, we should have an honest debate about this trade-off, rather than assuming that efficiency always wins.