The World Is Flat: A Brief History of the Twenty-first Century
Lively and provocative as always, Friedman returns with an updated thesis on globalization. In The Lexus and the Olive Tree, Friedman argued that technological innovation, foreign investment, capital flows, and trade were transforming the world -- breaking down national borders, constraining governments, and triggering grand struggles between nationalism and the forces of economic integration. Here he argues -- in a swirl of anecdotes about software designers, intrepid entrepreneurs, globetrotting investors, and the famous telephone call centers in Bangalore, India -- that globalization has reached a new stage. Now individuals, rather than governments or corporations, are the agents of change, empowered by e-mail, computers, teleconferencing, and production networks, all of which are drawing more and more people around the world into competition and cooperation on an equal footing. In this sense, Friedman argues, the world is becoming flat, and his book is organized as a sort of travel guide to globalization, a kinetic portrait of the wired global village. The rest of the book examines how countries, companies, and workers will need to adapt to flatness. For the United States, this entails, above all, investing in education, technology, and training.
But Friedman's image of a flat earth is profoundly misleading -- a view of the world from a seat in business class. Flatness is another way of describing the transnational search by companies for cheap labor, an image that misses the pervasiveness of global inequality and the fact that much of the developing world remains mired in poverty and misery. It also misses the importance of the global geopolitical hierarchy, which guarantees the provision of stability, property rights, and other international public goods. The rise of China and India is less about flatness than it is about dramatic upheavals in the mountains and valleys of the global geopolitical map.
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Robert Gilpin fears that globalization is at risk because the Cold War-era foundations of today's liberal capitalist order are eroding. In fact, they are stronger than ever.
The principal problem with which the world's economies must deal during the coming decade is the unsustainable imbalance of international trade. The United States cannot continue to have annual trade deficits of more than $100 billion, financed by an ever-increasing inflow of foreign capital. The U.S. trade deficit will therefore soon have to shrink and, as it does, the other countries of the world will experience a corresponding reduction in their trade surpluses. Indeed, within the next decade the United States will undoubtedly exchange its trade deficit for a trade surplus. The challenge is to achieve this rebalancing of world demand in a way that avoids both a decline in real economic activity and an increase in the rate of inflation.
Nixon was not the only one who went to China; Ronald McDonald is there now, too. McDonald's triumphed -- in a cultural zone where many adults think fried beef patties taste bizarre -- by catering to China's pampered only children, the so-called little emperors and empresses. The "Golden Arches" have become part of the landscape of Beijing and Hong Kong. But is McDonald's trampling local culture in the name of a bland, homogeneous world order? Not really. Global capitalism pushes one way, and local consumers push right back. Herewith, a parable of globalization.

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