The World is Flat: A Brief History of the Twenty-First Century
by Thomas L. Friedman (New York, NY; Farrar, Straus and Giroux, 2005).
Reviewed By Elijah Slack
With all of the information flying about these days concerning the effects of globalization, it can be difficult to distinguish rhetoric from helpful insight. In his latest book, The World is Flat,Thomas Friedman of the New York Times does just this by describing his massive journey to uncover the truth about globalization. He deconstructs the opportunities and threats of the rapid technological integration, and consequent openness, in the modern era. In the course of his exploration, he comes across the root cause of success and failure in the emerging sophistication of the modern world. He explains why some are extremely successful in the new hi-tech dynamic and others fall behind.
The different threads of this increasingly relevant topic are woven together masterfully by Friedman as he brings home the reality of how globalization will affect us all. The new rules of global engagement present a significant challenge to the global community. Further, Friedman discovers that Americans find themselves struggling to transition effectively in this new “flat” world—one of immense interconnectivity and wide open competition. He offers, as both a warning and promise of hope, that only the people and institutions that are able to recognize and adapt to the reality of a flat world will find success amid the potential turmoil.
The book begins by examining the factors that lead to the author’s realization that Columbus was wrong: The world is indeed flat. This newfound awareness presses him to discover how such a thing could have happened. He outlines the ten forces that flattened the world, beginning with the fall of the Berlin wall and culminating with the creation of what he calls “the steroids”. The steroids are defined as the proliferation of easy-to-use technology in digital, mobile, personal and virtual form. The eight flatteners in between include the introduction of Netscape, the creation of work flow software, opensourcing, outsourcing, offshoring, supply-chaining, insourcing and in-forming.
The materialization of these ten flatteners alone was not enough to create a flat world. It needed a catalyzing effect that Friedman calls the “triple convergence”— the well timed synchronization of the complimentary action of the ten flatteners, adaptable business practices and inclusive geopolitical changes. Friedman predicts that the threats and opportunities that will emerge in a flat world will cause political, social and religious allegiances to be reconsidered and reformed.
The second section of the book narrows its focus to the impact of a flat world on America. The economic benefits of free trade are balanced against the potential dangers that foreign labor poses to the American workforce. Many new workers in emerging market economies who were previously isolated from the global market, have entered it with an education and eagerness to produce at wages much lower than the American standard.
Friedman acknowledges that the multiple benefits touted by proponents of open borders are desirable and likely correct. Concurrently,hard-working Americans have legitimate concerns about the influx of outside labor. The barriers that for so long protected many of the staple industries, which produced secure employment for the American working class, are coming down. And workers in other countries, who have education and ambition, are pouring into the global workforce. They do so with little regard to these historically effective barriers, which are increasingly irrelevant thanks to the ten flatteners and the triple convergence.
These new foreign workers are not just performing the work that receives so much publicity, in call centers and as computer engineers, but in other fields as well. Friedman relays his experiences of foreign workers who perform a wide variety of services effectively and at a lower cost than Americans: reading X-rays, doing taxes and taking fast food orders. Friedman argues that a reconciliation between American fear and the possible gains from trade must occur in order for Americans to willingly accept the frightening concept of a flat world. It must be made clear to the public how they will benefit and what steps will be taken to ensure a smooth transition. Yes, American jobs are being lost, but that isn’t the whole story. As wealth finds its way into India, China and other emerging countries, a middle class of sophisticated workers will appear where none existed, creating a whole new group of consumers who will demand American services, just as Americans demand theirs. Thus, emerging markets not only offer a source of cheap and effective labor but also a new marketplace for American goods and services. To capitalize on the opportunities and mitigate the challenges the American workforce must be flexible, highly motivated and ably trained. The education and work ethic at the core of America must meet the expectations of an increasingly demanding marketplace. Meeting the challenges posed by a flat world economy must be a joint effort between the leaders of the country and the workforce. Friedman does not believe that the stampeding heard of upgrades and fiber optic cables that are opening the global market can, or should, be stopped. America possesses the necessary resources for success in the global environment; it is simply a matter of whether they are properly applied.
The discussion moves from America to the flat world in a larger context. The challenges that America faces are very real but not singular in their difficulty. Virtually every country is trying to identify its niche and come to terms with the realities of expanding globalization. Traditional concepts that are not conducive to this process can be difficult to change, even when they conflict with a popular desire to be plugged into contemporary society. Countries must learn how to encourage exhaustive human development and get the most out of it, despite any discouraging religious or social belief. They must discover methods of efficient collaboration with other countries, overcoming mistrust or animosity to the outside world. They must become a sincerely open society to create credibility with potential partners, customers and investors without consideration to any traditional urge to withhold information. The countries that are able to do this will succeed where others fail.
Companies now must evaluate themselves in much the same way that countries do. Companies that thrived in the time before a flat world are finding that the falling barriers are creating previously unimaginable competition. As technology proliferates and production is manifestly more able to accommodate progressively individualized demand, additional producers can enter the market. Individuals are wielding technology to successfully compete against corporations. The small can act large and the large must figure out how cater to the small. It has become a race to produce the most customized product most rapidly at the least cost. Friedman compares the process to ice cream: People don’t just want vanilla ice cream anymore, they want vanilla ice cream with syrup, whip cream and a cherry on top. In order to accomplish this, technology must be used to its maximum and collaborations with suppliers and customers become an intrinsic part of the business plan. Success requires that all avenues of improvement be explored and developed.
Clearly the flattening world has had an extensive impact on numerous individuals and institutions, but it is far from a comprehensive event. Populations in far-reaching areas remain untouched by modern globalization and are still living outside the flat world. Disease, corruption and disempowerment are crippling forces that have ossified progress and cemented the existence of an unflat world. Friedman believes that the way to combat these forces is to actively fight them; for example, by making modern medical and educational facilities available to people in the unflat world. Economic and democratic development will tap the currently wasted human ability and create a multitude of potential new collaborators. It is advantageous for all to offer oppressed, marginalized people, who represent a valuable untapped resource, a chance to join the global community. Friedman concludes that we are becoming an global community of unique openness and opportunity. Unfortunately, a myriad of pitfalls accompanies this transformation. The choice before us is whether the world will ambitiously move forward into a period of unprecedented growth, global cooperation and human stimulation despite the hardships that are sure to accompany it. Alternatively, nations may succumb to fear of change and the unknown. Friedman views this as a vital time in the history of the world that will reveal the essence of human nature, and believes that the optimistic imagination embedded in each of us empowers us to meet the challenges of the flat world.
Elijah Slack is the personal income analyst in the national income and wealth division at the Bureau of Economic Analysis. The opinions expressed in this review are his own.