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The World Is Flat 3.0: A Brief History of the Twenty-first Century Paperback – July 24, 2007
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“Captivating . . . an enthralling read. To his great credit, Friedman embraces much of his flat world's complexity, and his reporting brings to vibrant life some beguiling characters and trends. . . . [The World is Flat] is also more lively, provocative, and sophisticated than the overwhelming bulk of foreign policy commentary these days. We've no real idea how the twenty-first century's history will unfold, but this terrifically stimulating book will certainly inspire readers to start thinking it all through.” ―Warren Bass, The Washington Post
“Nicely sums up the explosion of digital-technology advances during the past fifteen years and places the phenomenon in its global context. . . . Friedman never shrinks from the biggest problems and the thorniest issues.” ―Paul Magnusson, BusinessWeek
“[This book's] insight is true and deeply important. . . . The metaphor of a flat world, used by Friedman to describe the next phase of globalization, is ingenious.” ―Fareed Zakaria, The New York Times Book Review (front cover review)
“A brilliant, instantly clarifying metaphor for the latest, arguably the most profound conceptual mega-shift to rock the world in living memory.” ―David Ticoll, The Globe and Mail (Toronto)
“No one today chronicles global shifts in simple and practical terms quite like Friedman. He plucks insights from his travels and the published press that can leave you spinning like a top. Or rather, a pancake.” ―Clayton Jones, The Christian Science Monitor
“[The World is Flat] is filled with the kind of close reporting and intimate yet accessible analysis that have been hard to come by. Add in Friedman's winning first-person interjections and masterful use of strategic wonksterisms, and this book should end up on the front seats of quite a few Lexuses and SUVs of all stripes.” ―Publishers Weekly (starred review)
About the Author
Thomas L. Friedman has won the Pulitzer Prize three times for his work at The New York Times, where he serves as the foreign affairs columnist. He is the author of three previous books, all of them bestsellers: From Beirut to Jerusalem, winner of the National Book Award for nonfiction; The Lexus and the Olive Tree: Understanding Globalization; and Longitudes and Attitudes: Exploring the World After September 11. In 2005 The World Is Flat was given the first Financial Times and Goldman Sachs Business Book of the Year Award, and Friedman was named one of America's Best Leaders by U.S. News & World Report. He lives in Bethesda, Maryland, with his family.
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It is a mark of Friedman's approach and personality that he dates the beginning of "Flat World" phenomena to a few years ago, when he discovered them. He seems blissfully unaware of the long history of globalization. A few examples: 200 years ago, before refrigeration, North American entrepreneurs destroyed the English trade in domestic ice by building insulated ships and shipping New England ice to London (and even Calcutta); cheap water power and cotton in the US destroyed the British weaving trades 50 years later; 500 years ago, the takeover of Peruvian silver mines by Spanish entrepreneurs bankrupted silver production in Spain; there are countless examples of the effects of globalization from the Roman Empire's rise and fall as well (well-managed during the rise, disastrously so during the fall). Friedman's "born yesterday" myopia on this topic, and on the lessons of history, is puzzling.
Friedman glances by what is, in my mind, the central issue (e.g. the one that has the biggest impact on people): the different ways governments act and respond. He admits no expertise in economics, yet declares himself to be a Ricardian (without reflecting on the irony of a self-styled futurist relying on 200-year-old economic theory), and moves on. The rest of us, however, can learn a lot by looking at the differences and subtleties (or lack thereof) of governmental policies, a topic which is completely absent from Friedman's book. Asian countries, and to a lesser extent Western European countries, have created a regulatory environment that promotes a productive response in their own countries. Some examples:
If GM wants to sell cars in China or Europe, it is obligated to build a factory there, and transfer some of its technology to local partners. Intel has just announced that its next processor fab will be built in China; the economics of IC manufacturing is something I know quite a lot about, and labor costs are a negligible factor. Intel was forced to do this by Chinese economic policy, not by cheap Chinese labor. Ditto putting a previous Intel chip plant in Ireland when Intel started selling in volume in Europe. On the other hand, our own government has been a willing partner in the evisceration of American industrial and high-tech production. The governments of Asian and European countries shake their heads at our short-sightedness and short-term consumption greed.
I credit Friedman with making more people aware of this important topic. That earns him one star!
Now let us go through the chapters of the book and critique each one in succession. The first chapter in this book is titled "How the World Became Flat", and begins with a section where Friedman recalls his conversations with different parts of the global economy now located in India, or run by Indian entrepreneurs. Friedman passes of these international connections into India as something that was just waiting to happen given the right mix of technology, public policy and innovators. Rubbish! Starting with the Roman Empire, through the British Empire and now the American Empire, the expansion of business across borders has never been spontaneous or random, but has always been driven from the top-down. Every US president who has gone abroad has brought with him representatives from numerous cartels and trade associations looking for business opportunities. This entourage of business lobbyists also follow every US governor, Congressman, Cabinet Secretary, city mayor, state legislator who travels abroad on the taxpayer dime, which happens on a daily basis. In fact, if American businesses were not expanding overseas at both the employment, investment and customer level, we the taxpayer should be impeaching our elected officials more often for wasting their time and our money traveling abroad.
Still the question remains as to why it is only in the past two decades have we seen the massive extension of US business overseas. The answer is two-fold, and Friedman gets the first half of it correct, and that is the end of the Cold War and the subsequent dropping of the Iron Curtain. The second answer is more subtle, but probably more important, and that is the US population is essentially maxed out on all three fronts, as consumers, as investors and as employers. Americans buy more on credit, and save less than any other developed nation on Earth, so there is not much more growing of the pie that American retailers can do on native soil. As a country, just about everything that can be privatized already is, whether it be our prisons, universities, hospitals, airports, and even our national laboratories... So outside of the occasional Napster or Facebook, the US economy really does not offer any untapped avenues for investment. And last, every American who can and wants to work, is working. In fact, most Americans are working too much for too many years of their lives... So the US labor pool is essentially tapped out. Together, these three caps have forced US businesses to expand overseas in order to continue growing. Unfortunately, this is what Friedman fails to mention, but which every American citizen feels on a daily basis.
The next portion of the book is titled "America and the Flat World". Here Friedman explains the logic and consequences behind Free Trade, with a throwback to David Ricardo. Taking the examples of China, Friedman attempts to show how free trade benefits a greater percentage of people than any other economic system possible. I would call this chapter wishful thinking. For starters, there never has been free trade between the US and China. China has for decades, and continues to support barriers to the entry of foreign-made goods into the country. These barriers come in various forms, from outright demands of bribes, to requirements that importers employ locals on their staff, to a maze of permits designed to protect local businesses, to the anecdotal electricity blackout when the store is about to open... Together these barriers have protected Chinese manufacturers from foreign competition in every business sector one can imagine.
Likewise Japan, South Korea, Taiwan, Malaysia, and Vietnam used forms of economic protection to provide their labor force with stable employment levels, wages, and price supports of specific goods throughout the 1960s, 70s, and 80s. In fact, it was only after these countries lowered tariffs to goods, and lowered barriers to capital flight did they become susceptible to financial bubbles and busts in the 1990s and 2000s. One does not even need to look across the Pacific. Every American citizen could and should just look back at our own history... From the Civil War onwards to the early 1900s, America had a high tariff rate that shielded American manufacturers from the predation of the British Empire. This allowed America to grow economically into the powerhouse that swept the fields of Europe in both World Wars. So no Dr. Friedman, free trade does not provide the maximum benefit to the largest number of people.
The next chapter of this book is "Developing Countries and the Flat World". Here Dr. Friedman keys in on several countries to see how well their economies have developed in the Digital Age. These include China, Mexico, and the Arab world highlighted by countries such as Egypt and Saudi Arabia. Here Dr. Friedman reveals his neo-conservative leanings by explaining away the relative successes of these countries as due to differences in culture, adaptability, and other "soft" qualities. For example, Dr. Friedman looks at how successful China has become and contrasts this with the Arab countries which have been mired in religious fundamentalism. Unfortunately for the less aware reader, Dr. Friedman's book is lying. The key to economic success in the Digital Age, as it was in the Renaissance, is economic independence. China after the Communist Revolution developed its own banking and finance system that answered to the needs of its people. Hence the country has devoted financial and human resources into building roads, dams, mass transit, power plants, and universities to push its population into the digital age. In contrast, Mexican banks have been intertwined with and dominated by larger more powerful American and European banks via the oil and narcotics industry. The former has clouded Mexican economic and political policies with fears of imperialism, while the latter has introduced levels of corruption unseen in any other established democracy. And last the Arab countries, or more generally the Middle East. Starting with Operation Ajax in the Eisenhower administration, the NATO countries have relied on their intelligence agencies to overthrow any Middle Eastern leader that tried to allocate resources (i.e. tax oil exports) to developing their countries. The names of such victims include Nasser, Sadat, Arafat, Mossadegh, and more recently, Qaddafi and Assad. So no, its not culture, or religious extremism in the Muslim countries that have stifled economic growth... Its covert black ops stemming from Western governments.