The Edge of Flatness

Finished up “The World is Flat” by Thomas Friedman, a NYT columnist, originally from Minnesota. 

One of the things that strikes me from the book is the fact that there are only two political parties, and if you want to be seen as an “intellectual” and hang out with folks that the NY Times, there is really only one. I’m sure Friedman would swear to his dying day that he is a Democrat, but while 97% of the book sounds like a Republican free trader, the only places he actually mentions US political parties are the 5 times he mentions that “The Republican Led Congress” cut funding to the NSF, which he takes as a hugely foolish thing to do. The other is that he gets a couple of Bush bashes by name in, one for Bush’s failure to do the “obvious thing” and start an “energy Manhattan project" , and the other when he claims that history will show that Bush shamelessly used 9-11 to promote a right-wing Republican agenda. 

I hope those small fig leaves are enough to allow the lefties to consider a lot of the highly factual information in the book on globalization, the futility of socialism, and how important it is for us to understand that we are in a global economic competition, and the only way to maintain our standard of living is to compete successfully. A little Republican bashing is a small price to pay for the rest of the book.

Friedman Lists 10 “flatteners”:

1. 11/9/89 – The Fall of the Berlin Wall … no walls, open world, capitalism won.
2. 8/9/95 – Netscape goes public, the birth of the “Internet Platform”
3. Work Flow Software – Breaking work up and controlling it.
4. Open Source – Self-organizing collaborative communities
5. Outsourcing – Y2K … the Indians got a foot in the door, specific pieces
6. Offshoring – Moving whole major parts of business overseas
7. Supply Chaining – Horizontal collaboration
8. Insourcing – UPS, hiring other companies to be part of your company.
9. In-Forming – Google, Yahoo, Information at EVERYONEs fingertips
10. The Steroids – Digital, Mobile, Personal, Virtual

These flatteners, along with the “Triple Convergence”:

1. At Y2K, all ten of the flatteners made the global playing field level.
2. Businesses and individuals adopted new habits, skills, and processes to make use of the flat world. Vertical to horizontal.
3. A whole new group of people walked out on the playing field from China, India, and former Soviet Union.

The core messages of the book are:

· Technology, in the form of transportation, communication, computers, software, standards, the internet, bandwidth, etc creates a “flat world” where distance is hardly a factor, and even barriers like language and local government policies are less important than the “global competitive platform”.

· In a flat world, the barriers to competition are small to non-existent. People at computer terminals with phones in India or China can compete very well with people at computer terminals with phones in Ohio or Utah.

· As has been happening for 1000’s of years, the effect of this in the globe is that the size of the economic pie is increased … drastically. When more people create and compete with better tools and less barriers to competition, the economic pie grows for everyone. (failure to realize this is one of the reasons that some fight globalization, just as they fight capitalism)

· All of this means change, and change is never smooth. The growth won’t happen in all the same places as it does today, income will be distributed differently, economic and political power is changed … shifted, different players “win and lose”. People that are in the business of “keeping things the way they are” will be very angry. Socialists and Islamic Fundamentalists have a lot in common as far as being against globalization. Both lose a lot of power if it is successful.

· Free markets and capitalism go hand in hand with globalization. Tom seems to not particularly like that fact, but accepts that once people are seamlessly connected by something that you can’t, and likely don’t want to stop (the internet), the fact that they will “compete” is sort of like gravity coming with mass. Trying to stop it is a waste of time.

That covers a lot of the key points, more commentary in the next post.