The World Is Flat: Chapters 3–4

Wealth and power will increasingly accrue to those countries, companies, individuals, universities, and groups who get three basic things right: the infrastructure to connect with this flat-world platform, the education to get more of their people innovating on, working off of, and tapping into this platform, and, finally, the governance to get the best out of this platform and cushion its worst side effects.

In the years roughly coincidental with the Netscape IPO, humans began animating inert objects with tiny slivers of intelligence, connecting them into a global field, and linking their own minds into a single thing.

When computers were first introduced into offices, everyone expected a big boost in productivity. But that did not happen right away, and it sparked both disappointment and a little confusion. The noted economist Robert Solow quipped that computers are everywhere—except “in the productivity statistics.”

In a path-breaking 1989 essay, “Computer and Dynamo: The Modern Productivity Paradox in a Not-Too Distant Mirror,” the economic historian Paul A. David explained such a lag by pointing to a historical precedent. He noted that while the light bulb was invented in 1879, it took several decades for electrification to kick in and have a big economic and productivity impact.

We needed the emergence of a large cadre of managers, innovators, business consultants, business schools, designers, IT specialists, CEOs, and workers to get comfortable with, and develop, the sorts of horizontal collaboration and value-creation processes and habits that could take advantage of this new, flatter playing field.

Finally, consider the example of WPP—the second-largest advertising-marketing-communications consortium in the world.

Suddenly, it could look at all its employees from all its companies as a vast pool of individual specialists, who could be assembled horizontally into any number of collaborative teams, depending on the unique demands of any given project.

Instead, I am saying that the effect I want to create is to get the smartest analysis in real time, and the way I get that is by horizontally connecting different nodes in my whole network.

The global economy from here forward will be shaped less by the ponderous deliberations of finance ministers and more by the spontaneous explosion of energy from the zippies.

Zippies are the huge cohort of Indian youth who are the first to come of age since India shifted away from socialism and dived headfirst into global trade and the information revolution by turning itself into the world’s service center.

Yes, he noted, India right now has a great advantage in having a pool of educated, low-wage English speakers with a strong service etiquette in their DNA and an enterprising spirit.

CEOs, with some justification, became guilty until proven innocent of boardroom shenanigans, and even the slavishly pro-business, pro-CEO Bush administration was wary of appearing—in public—to be overly solicitous of the concerns of big business.

You know the “IT revolution” that the business press has been touting for the last twenty years? Sorry to tell you, but that was only the prologue.

They will affect how individuals, communities, and companies organize themselves, where companies and communities stop and start, how individuals balance their different identities as consumers, employees, shareholders, and citizens, how people define themselves politically, and what role government plays in managing all of this flux.

While the shrinking and flattening of the world that we are seeing today constitute a difference of degree from what Marx saw happening in his day, said Sandel, it is nevertheless part of the same historical trend Marx highlighted in his writings on capitalism—the inexorable march of technology and capital to remove all barriers, boundaries, frictions, and restraints to global commerce.

Indeed, reading the Communist Manifesto today, I am in awe at how incisively Marx detailed the forces that were flattening the world during the rise of the Industrial Revolution, and how much he foreshadowed the way these same forces would keep flattening the world right up to the present.

All fixed, fast, frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away

all new-formed ones become antiquated before they can ossify

All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his real conditions of life and his relations with his kind.

The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country.

To the great chagrin of reactionaries, it has drawn from under the feet of industry the national ground on which it stood.

In place of the old wants, satisfied by the production of the country, we find new wants, requiring for their satisfaction the products of distant lands and climes.

The cheap prices of commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate.

It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilization into their midst, i.e., to become bourgeois themselves.

But a flat, frictionless world is a mixed blessing. It may, as you suggest, be good for global business. Or it may, as Marx believed, augur well for a proletarian revolution.

From the first stirrings of capitalism, people have imagined the possibility of the world as a perfect market - unimpeded by protectionist pressures, disparate legal systems, cultural and linguistic differences, or ideological disagreement.

But the open-source devotees are a little too glib when they say that the “network” always can be relied upon to establish these new norms.

The big lie that Jews were warned not to go to work at the World Trade Center on the morning of 9/11 began somewhere in the Muslim world and spread like a wildfire on the Internet, and no amount of news stories debunking it could eradicate that rumor.

The American arm of an Indian consulting firm proposes to save the taxpayers of Indiana $8.1 million by revamping their computers—using both its Indian employees and local hires from Indiana.

In the past, though, a country benefited from and depended upon the success or hegemony of its leading companies to define its economic well-being and its standing in the world.

So Dell wants as flat a world as possible, with as little friction and as few barriers as possible.

So do most other corporations today, because this allows them to build things in the most low-cost, efficient markets and sell in the most lucrative markets.

Since multinationals first started scouring the earth for labor and markets, their interests have always gone beyond those of the nation-state in which they were headquartered.

So the Wal-Mart shareholder and shopper in us wants Wal-Mart to be relentless about removing the fat and friction in its supply chain and in its employee benefits packages in order to fatten the company’s profits—and to keep its prices low.

How flat do you want government to be? How much friction would you like to see government remove, through deregulation, to make it easier for companies to compete on Planet Flat?

The Vioxx debacle [over an anti-inflammatory drug that was found to lead to an increased risk for heart attacks and strokes] shows the extent to which drug safety has taken a backseat to speedy approval.

Some believe the best way to provide incentives for innovation is by fiercely protecting the inventor's proprietary interest.

Ken had a similar lament: So many contracts were going these days to the advertising firms that were selling just numbers, not creative instinct.

Social conservatives from the right wing of the Republican party, who do not like globalization or closer integration with the world because it brings too many foreigners and foreign cultural mores into America, might align themselves with unions from the left wing of the Democratic Party, who don’t like globalization for the way it facilitates the outsourcing and offshoring of jobs.

They might be called the Wall Party and militate for more friction and fat everywhere.