The World is Flat: A Brief History of the Twenty-First Century
by Thomas L Friedman
Farrar, Straus and Giroux, New York, 2006
Tom Friedman has written a brief history of globalization since 1987. It explains how economies around the world have become very integrated over the past quarter century, focusing on many “events” that were not recognized at the time as being so important or crucial. In this particular book, he largely ignores the reality of the ecological and environmental constraints that are fast approaching in a world of over seven billion (and increasing) population. He devotes a later book, Hot, Flat, and Crowded, published in 2008 to that topic. That book will be a focus of a future review.
Friedman starts The World is Flat with ten things that flattened the world. While he fall of the Berlin Wall, and the attack on the World Trade Center on September 11 are “geo-political” events, most items covered are advances in computer technology. Most people understand many of the terms he uses, such as downloading, uploading, outsourcing, and insourcing.
The development of the Internet began with CERN, the European Organization for Nuclear Research in Switzerland in 1991. The public appearance of Netscape as a browser on August 9, 1995 was a pivotal event. Now there was a user-friendly means of browsing the World Wide Web. It quickly became possible for information to be exchanged by people from around the world. This quickly led to all types of innovative systems of cooperation among people, often complete strangers and becoming “known” to each other only through e-mail or various Internet tools.
This cooperation on software development and other people connected due to common interests be they scientific, social, literary, education, of business interests has quickly become an essential feature of doing business in many different fields. Just one of many examples that Freidman describes throughout his book: the images or raw data of an MRI done on a Thursday someplace in California may well be transmitted via computer networks / Internet to India. There someone in India interprets it during the American overnight, then retransmitted back to the source as a final report by the next morning.
One of the more important developments of the past 3 decades is supply chaining. Wal-Mart is a key developer of this phenomenon. Using a diversity of suppliers around the world, on a very large scale Wal-Mart has been a leader in developing the ability to track goods through the whole process, ensuring whatever the item of the season might be (snow blowers in late fall and swimming pools in the spring, or seasonal apparel, there is a system in place to assure that the item in question arrives on the shelves of local stores “just in time” for consumer demand.
Wal-Mart is indeed quite controversial. It is seen variously as a job creator, and the destroyer of local mom and pop commerce. For the working poor and much of the middle class, it is the cheapest place to purchase almost anything, from food to clothing, house wares to electronics, sporting goods to music. By keeping prices low and affordable, Wal-Mart is heavily patronized by the working poor, and increasing, the middle class.
Opponents of Wal-Mart complain about their discriminatory employment practices against women, keeping many employees part time and thus deprived of employer sponsored insurance, and dominating a local grower’s expanded market, then cutting what they will pay, ultimately forcing some small to medium scale farms or orchards out of business.
Be that as it may, there is no doubt that supply chaining has served Wal-Mart and its customers well. In the regional disaster of Hurricane Katrina, in Wal-Mart was one of the few institutions up and running in Biloxi, providing the survivors with a variety of emergency supplies from shovels to buckets to boots and cleaning tools that were virtually unavailable elsewhere. Victims of the hurricane along the Gulf Coast were urging outside donations of Wal-Mart cards in lieu of food or clothing.
One of the great weaknesses of Friedman’s book is his lack of acknowledging one basic economic fact: While supply chaining has worked well in the past, inevitably rising energy costs, particularly the price of oil, will make this distribution of the Wal-Mart products to local store shelves “just in time” economically unsustainable.
Despite his largely ignoring environmental constraints that are approaching fast, Friedman does propose three basic areas where the United States must place more attention if we are to retain our economic and social importance on the world stage.
Perhaps the largest and most controversial of these is drastic reform of our health care system. His views on this are generally vague, and He admits that a focus on this issue could easily be an entire book. Providing health care benefits through the employer places a burden on businesses trying to compete in a global market where their foreign counterparts do not have this expense. Friedman falls short of calling Medicare for all, but recognizes that we should and can do much better.
A second idea is the portability of pensions. Retiring after working at the same company for 40 years is not a realistic option for most people. Friedman feels that all employees should have the option of starting a portable retirement account that would follow them from job to job. This would be in addition to social security, and would provide nearly everyone with an additional “pension” upon retirement after a varied career of working for 5 or 10 different companies.
Friedman correctly notes that the two issues of health insurance based largely on the benevolence of one’s employer and the lack of portability of pension plans both discourage many people from taking the risk of changing jobs. This stifles innovation, limiting the options for entrepreneurs. Losing one’s job often includes losing health insurance and rights to a pension at a time when most vulnerable to economic hardship.
A third focus is on education. By most standards, the United States is failing in academic achievement in secondary education, particularly in sciences and technology, but also in history and foreign languages. Our universities have a large number of foreign students from China, Korea, Russia, and many countries from around the world, many of whom outshine their American counterparts. In secondary education the preparation of university students for the next decades, we are falling behind many Asian countries.
This newly flat world is full of paradoxes. It is likely that millions will remain behind a digital divide, impoverished, often residing in failed states with constant war, violence, famine, and disease. There will be pockets of domestic digitally disconnected, having great difficulty navigating day to day mainstream society, with good employment opportunities only a dream.
We have to realize the importance of a universal health care system, preferably a single payer system, and some type of simplified and secure form of independent retirement fund. Only with strong systems supporting the elderly, adequate health care for all without fear of bankruptcy, and a strong reinvigorated educational system can we expect to retain a role of world leadership in the coming decades.
As history of an era, this book succeeds very well. Despite its lack of insight on the impacts that higher energy costs and rapid climate change will have on the globalization process, its historical perspective on modern rapid technological change is refreshing. Friedman has written a very good survey of major developments in computer technology of the past quarter century and how they have affected every day life in many ways now taken for granted. Written during a time of rapid change and innovation, it describes how we have arrived at this point of having American technological and economic advantages seriously challenged from around the world. It also prescribes very important domestic changes needed if the United States is to retain its leadership role and not be surpassed by India, China, and other innovative economies around the world.