One of the suggested texts for my Geopolitics of Innovation class at UPB was Thomas Friedman’s The World is Flat: A Brief History of the 21st Century. I found it to be a very valuable book in simply describing how it is that the world economy has changed over the past 30 years as a result of digital communications hardware and software. These technologies along with a number of changes in legislation that facilitated increased the ability of US companies to invest and develop workforces in foreign have radically altered the way in which globalization has manifested itself. The flatness to which Friedman refers has, of course, nothing to do with the peculiar Flat Earth movement but with the lowering of barriers that previously prevented innovative collaborations occurring across borders. Friedman intersperses his own analysis with that of a number of subject area experts within the business, academic and governmental sphere to support his “brief history”.
The book uses two dates 11/9, the collapse of the Berlin Wall, and 9/11, the date of the hijacked plane attacks on America that launched the War on Terror as bookends by which to frame the flattening of the world and, in the final chapter, as examples of potential directions that the new global economy can head. Either there will be increased openness, collaboration, innovation and free trade or there will be a closure of borders, ideas and exchange of goods, services and capital such that the pace of the economy slows and growth shrinks.
Friedman sees this responsibility to adapt to new conditions as being primarily borne by the individual and their family, with the government facilitating to a limited extent the development of new skill sets and abilities. While not blind that a number of people can get left behind in such situations, as a technological determinist and a student of history he states that there is little that can be done other than adapt – personally, culturally, and economically – to the “flattening of the world”.
The ten historic flatteners Friedman cites are as follows:
#1: 11/9/89, When the Walls Came Down and Windows Hit the Tornado
#2: 8/9/95, When Netscape Went Public
#3: Work Flow Software
#4: Open-Sourcing & Self-Organizing Collaborative Communities
#5: Outsourcing & Y2K
#6: Offshoring
#7: Supply-Chaining
#8: Insourcing
#9: In-forming
#10: The Steroids, Digital, Mobile, Personal, and Virtual”
Each of the ten flatteners show how it was that information and communications technologies radically altered the business landscape in ways that goes far beyond railroads and electrification. While embracing technological determinism, Friedman shows through a number of examples that the sort of retail economic reforms needed to exploit these flatteners are insufficient as indicators unless connected to wider changes in social norms. I found the comparative analysis of different countries business environments and cultural norms to be especially informative. Put simply, societies must rapidly adapt to these new environments or they will rapidly see their GDPs start to slow, stop or decline. Because of this the capacity to learn – be it via market vigilance, improvement of customer relations and business processes, etc. – is the most important quality to be able to demonstrate in the workplace.
With the caveat that the book is not intended to be included within the general rubric of business strategy literature, Friedman also shares a number of the insights he’s gained from analyzing the flatting of competition. I won’t include them all, but Friedman’s analysis on the rules seeks to allay fears that all is lost for the average American worker.
“Rule #6: The best companies outsource to win, not to shrink. They outsource to innovate faster and more cheaply in order to grow larger, gain market share, and hire more and different specialists-not to save money by firing more people.”
These rules and their analysis show how globalization – done ideally – leads to a race to the top rather than a race to the bottom. While citing a number of examples within business history that provides the rationales for these new rules to this effect, the book did leave me wanting for a more detailed analysis of the American economy. While increased economic exchanges between the BRIC countries and the US certainly have a number of positives, I think to better make this case as more comprehensive overview of globalizations impact is necessary. While certainly allowing higher-skilled workers and the companies that employ them to do more for their money – there are a number of social and economic ills connected the transition away from an economy with large portions of the work force in manufacturing to those engaged in the service economy that Friedman doesn’t cover.
One of the sections that I found rather interesting given my academic background and that I participated in several anti-globalization demonstrations – such as the FTAA protests in Miami– is a brief engagement with the writings of of Karl Marx. It’s happens via a professor interlocutor that praised his thought as reflective of the realities of capitalism. I cite these passage below at length in order to close the review with a reflection.
I bring this up as Friedman describes class conflict without calling it such and as it relates to the crux of the book’s unspoken argument – “globalization is good for everyone”. While certainly not as naïve as the political pronouncements made by Fukuyama in his book The End of History and the Last Man, there is a growing body of critical voices from the right on shareholder value being the goal of businesses as opposed to stakeholder value. Many contemporary political commentators have mentioned this, with some citing it as one of the reasons that Donald Trump was elected. While I think that Friedman’s optimism is for the most part deserved, I also feel that the destabilizing effects of it make the work at certain points hallucinatory in its choices of coverage.
For example, Friedman cites the antiglobalization movement, which emerged in 1999 at the World Trade Organization conference in Seattle, to highlight this conflict. According to Friedman:
“From its origins, the movement that emerged in Seattle was a primarily Western-driven phenomenon, which was why you saw so few people of color in the crowds. It was driven by five disparate forces.
One was upper-middle-class American liberal guilt at the incredible wealth and power that America had amassed in the wake of the fall of the Berlin Wall and the dot-com boom. At the peak of the stock market boom, lots of pampered American college kids, wearing their branded clothing, began to get interested in sweatshops as a way of expiating their guilt.
The second force driving it was a rear-guard push by the Old Left-socialists, anarchists, and Trotskyites-in alliance with protectionist trade unions.
The third force was a more amorphous group. It was made up of many people who gave passive support to the antiglobalization movement from many countries, because they saw in it some kind of protest against the speed at which the old world was disappearing and becoming flat.
The fourth force driving the movement, which was particularly strong in Europe and in the Islamic world, was anti-Americanism. The disparity between American economic and political power and everybody else’s had grown so wide after the fall of the Soviet Empire that America began to-or was perceived to-touch people’s lives around the planet, directly or indirectly, more than their own governments did.
Finally, the fifth force in this movement was a coalition of very serious, well-meaning, and constructive groups-from environmentalists to trade activists to NGOs concerned with governance-who became part of the populist antiglobalization movement in the 1990s in the hopes that they could catalyze a global discussion about how we globalize. I had a lot of respect and sympathy for this latter group. But in the end, they got drowned out by the whether-we-globalize crowd, which began to turn the movement more violent…”
While this aligns with my own readings and experience – a growing body of literature connects the business practices described in the book to the opioid epidemic, increased rates of depression, alcoholism and other nasty ills. Management of the economy and the workplace according to the new rules of globalization have certainly allowed corporations to extract more value and thereby be in a better position to compete globally, but with so many struggling to adapt and with the new social intelligence capacities created by information and communication technologies that there is a growing distrust and animosity to existent leadership such that populism is increasing – I think it’s worth examining not just “how we got here” but also “how can we make this work in a way that’s managed even better.”