The Incredible Shrinking World

The World Is Flat: A Brief History of the Twenty-First Century

Thomas L. Friedman. 2005. Farrar, Straus and Giroux, New York. 488 pages.

Globalization and Its Discontents

Joseph E. Stiglitz. 2003. W.W. Norton & Company, New York. 288 pages.

In Defense of Globalization

Jagdish Bhagwati. 2004. Oxford University Press, New York. 308 pages.

Change inevitably enriches a language. So when we think about the fast pace of change throughout the past century, it shouldn’t be surprising that we’ve added thousands of new words to our collective vocabulary.

One example is globalization. The word has been around since World War II, yet it’s still not fully understood by most who use it. In an attempt to define the term, a number of helpful books and articles have been written in the past few years. But attempts at definition have not necessarily led to agreement as to the impact—or even the reality—of globalization.

The World Is Flat

As the discussion continues, Pulitzer Prize–winning journalist Thomas Friedman (author of From Beirut to Jerusalem and The Lexus and the Olive Tree) has provided an accessible new resource. Titled The World Is Flat, his latest work succeeds—on various levels—more often than it fails.

Friedman argues compellingly that the world is integrating and growing smaller at an accelerated pace. In a sense, he says, integration is the crux of understanding globalization. He hopes his book will trigger a national debate on the subject at a time that is pivotal for America. Few Americans, he believes, understand what has happened to bring about an integrated world seemingly overnight.

Citing a conversation he had with the CEO of a growing software company in India, Friedman recalls having commented on that nation’s sparkling new buildings. He also expressed surprise at the number of U.S. companies now outsourcing services to India, China and other parts of the world. The CEO informed him that many are not aware of the immense integration and economic change that has taken place. “Tom,” he said, “the playing field is being leveled.” In other words, the Western world (specifically the United States) had better prepare for a very different economic order.

The journalist in me was excited at having found a framework to better understand the morning headlines and to explain what was happening in the world today,” writes Friedman. “Clearly, it is now possible for more people than ever to collaborate and compete in real time with more other people on more different kinds of work from more different corners of the planet and on a more equal footing than at any previous time in the history of the world—using computers, e-mail, networks, teleconferencing, and dynamic new software.”

The concept of tight integration on a global scale is the book’s main thesis. The theme is repeated in various ways, but the author makes his point best with a suggestion that the reader consider looking at the world through a different lens: “When you start to think of the world as flat, a lot of things make sense in ways they did not before.”

One of the most helpful concepts is discussed early in the book. Friedman identifies the eras or phases that globalization has gone through since the time of Christopher Columbus, to whom he attributes the discovery that the world was round. (It was actually Ferdinand Magellan’s voyage 30 years later that proved the fact.) These eras led to a shrinking world as nations and peoples were free to communicate and trade with one another in a competitive environment. He dubs the first phase “Globalization 1.0,” saying that it lasted from 1492 to about 1800. The various colonizing peoples were concerned about the extent of their individual power and the best way to extend their influence. The power of individual nations began to be felt in many places on the globe. As a result, the world became more integrated. In the first period, then, the world shrank from large to medium.

Just in the space of a few years we went from competing with firms down the street to competing with firms across the globe.”

Thomas Friedman The World Is Flat (quoting ad agency CEO Ken Greer)

The next phase, “Globalization 2.0,” lasted from 1800 to 2000. The initiators of integration shifted from nations to multinational companies. Harnessing new technologies such as the steam engine and the railroad and taking advantage of “falling telecommunications costs—thanks to the diffusion of the telegraph, telephones, the PC, satellites, fiber-optic cable, and the early version of the World Wide Web,” these companies helped shrink the world from medium to small.

Globalization 3.0” is the present phase—one that the world is just beginning to comprehend. The world is shrinking not only from small to tiny, but also to flat. The power behind this flattened world is not national power, military capacity, multinational reach or economic dominance, but individual action. The ability of individuals to collaborate and compete on a global level gives this era “its unique character.” Globalization 3.0 began after the year 2000, when major technologies and computer software became available, allowing a small group of people or individuals the ability to connect with almost anyone on the face of the earth. Another major difference that sets this phase apart from its predecessors is that it will not be dominated by people from the Western world but by “individuals from every corner of the flat world.” He explains, “Globalization 3.0 makes it possible for so many more people to plug and play, and you are going to see every color of the human rainbow take part.”

Many expect that a fast-accelerating global outsourcing of services of every description—from accountancy to advanced software—will continue in this newly flattened world. The growth is made possible by the vast array of satellites and fiber-optic cable produced before the dot-com bubble burst in early 2000.

The rest of The World Is Flat discusses how the change from a large round world to a tiny flat world has taken place in such a short time. It outlines in detail ten major occurrences that brought about the increased integration between individuals.

Globalization and Its Discontents

Nobel laureate economist Joseph E. Stiglitz offers a more jaundiced view in Globalization and Its Discontents. Stiglitz’s book is a complex but readable look at globalization. But unlike Friedman’s, this work is not upbeat about the future of such a closely integrated world.

Stiglitz and Friedman agree that globalization is real—that the world is leveling out and becoming smaller. But Stiglitz focuses primarily on the effects of this integration on those who are not able to “plug and play” with the more affluent nations in the world. He is not blind to the benefits of globalization for many in the developing world, including access to knowledge and international trade that provides accelerated economic growth. He believes that globalization has “reduced the sense of isolation felt in much of the developing world” and that “many people in the world now live longer than before and their standard of living is far better.” But Stiglitz looks beyond these benefits to the challenges that integration has set before the Western world. He chides the proponents of globalization for their apparent unwillingness to see that for many in the developing world, “globalization has not brought the promised economic benefits.”

In his view, the failure does not lie with technology but with failed policies and poor management of the global economy. While he states early in his book that he believes globalization is good, he later writes that not only is it not working for many of the world’s poor, but neither is it working for the environment or for the stability of the global economy. He argues that global decisions and agreements need to be rethought for real integration to happen on a wider and more just scale.

Those who vilify globalization too often overlook its benefits. But the proponents of globalization have been, if anything, even more unbalanced.” 

Joseph E. Stiglitz Globalization and Its Discontents

In short, Stiglitz is more concerned with the effects of globalization on the developing and poorer nations of the world and less on the glitzy glamour of a flattened world. He believes that globalization is here to stay. But global institutions need to regulate the collective actions of a few for the benefit of those who are being left out of the process.

The latter portions of his book discuss his proposals regarding global oversight, including reforming the United Nations, the International Monetary Fund, the World Trade Organization, and national economies. “Globalization,” he concludes, “has meant that there is increasing recognition of arenas where impacts are global. It is in these arenas where global collective action is required—and systems of global governance are essential.”

In Defense of Globalization

As a former special adviser to the UN on globalization, Jagdish Bhagwati offers an engaging and comparatively optimistic view on the subject. In Defense of Globalization presents a detailed and balanced view. Positioned somewhere between Friedman’s giddiness over the flattened world and Stiglitz’s focus on economic unfairness, Bhagwati acknowledges the challenges of the technological advances that have integrated the cultures, economies and information systems of the world. The book is a serious look at most of the anti-globalization arguments that have been the foundation of international debates.

Because Bhagwati’s focus is primarily economic globalization, he travels some of the same territory as Stiglitz. His intent, however, is to refute anti-globalization rhetoric by providing an extensive assortment of facts and data. He argues persuasively that the perils of globalization have been exaggerated.

Like Friedman, Bhagwati recognizes that globalization is not a new event. But instead of defining it in three phases, he simply says that it has been with us for hundreds of years. He suggests that anti-globalists recall the East India Company, or Dutch East Indies Company. Such early corporations were instrumental in bringing about economic expansion and growth of nations in a largely disjointed world. But he is quick to admit that today’s force of global integration has a “special, and at times sharp, edge.”

Regrettably, many of the leaders in the poor countries have now come to believe that the trading system is unfair and hypocritical, and therefore they can focus on others’ protectionism and forget about their own.”

Jagdish Bhagwati In Defense of Globalization

The real trends in globalization today “must be written in two inks: one colored by technical change and the other by state action.” Twenty-first-century globalization is accelerated by the unprecedented exchange of information allowed by technology. The nations of the world have the power to work for greater collaboration (or greater distance).

He suggests that many of the opposing views are at their core anti-capitalist, anti-corporate and anti-American, and that this drives most of the anti-global rhetoric in the Western world. The book provides anecdotes where possible—rather than a list of figures—to combat attacks from the opposing side.

Though he sees much to welcome in globalization, Bhagwati warns his readers that it is “not good enough.” He offers plausible solutions to the downsides of the movement, which he says must be contained by international governance and appropriate policies.

As a veteran lecturer, Bhagwati adeptly puts a human face on this hard-to-define subject. He devotes much space to the effects of globalization on poverty in the developing world, child labor, women’s rights, national cultures, working conditions and political ideologies. He cautions pro-globalists not to place total faith in the perceived benefits: “If the policy maker retreats behind the unpersuasive claim that—more or less, and over time—the difficulties will always be surmounted and the globalization tide will surely lift all boats, she is on treacherous ground.”

The Good, the Bad and the Unknown

These three engaging volumes present compelling evidence of globalization’s growing effects. Despite their differences, and the fact that the authors address diverse elements of the phenomenon, one fundamental point is common: the world is more integrated and connected than it has ever been. Whether we call it globalization, a flattened world, or open, free societies, these massive changes have the potential to affect the daily lives of every human being on the face of the earth. An immense shift has clearly taken place, and few understand it.

The question these authors attempt to answer—whether globalization is ultimately for the good of humanity or not—will take many years to answer. There is cause for much optimism. In an economic and material sense, all societies could benefit from this major shift on the world scene. Everyone hopes that “all boats are lifted” by the rising global tide. But a far more important question concerns the world’s spiritual well-being. Economic prosperity and better living standards have not always brought with them spiritual health. In fact, a case for the opposite could be made.

If Friedman is correct, we have just entered a phase of integration that is relatively unknown to most. But it is not the first time the world has been “flat.” The ancient book of Genesis describes a city with a tall structure, whose builders attempted to reach heaven. The construction of the Tower of Babel was enabled by cultural, economic and political integration. We are told that at the time, humanity had “one language and one speech” (Genesis 11:1). But God decided to cause them to speak in different languages, thereby thwarting the massive project. Obviously God was not under any threat from the tower reaching into His spiritual realm. What, then, was the danger posed by such an engineering feat?

The name Babel meant “gate of god” in Akkadian. According to the New Bible Commentary, “Babylon considered itself closer to god than anywhere else on earth. It regarded itself as the religious, intellectual and cultural capital of the ancient world, the showpiece of human civilization.” The builders had said, “Let us make a name for ourselves.” The Genesis account records that such spiritual arrogance and independence displeased God. He reacted to the building project by noting, “Now nothing they propose will be withheld from them.” Could it be that the efficient communication provided by a common language was allowing knowledge and information to increase exponentially and that, as a result, humans were on a fast track to ill-conceived independence from God through their own technology? As the New Bible Commentary continues, “Put in modern terms the building of the city and tower may be seen as a human bid for self-achieved security on the basis of technological progress.”

On reflection, this story serves as a warning against a flattened world built without an adequate foundation. Friedman alludes to the challenge when he writes that individuals, empowered by new technologies, can present a threat to everyone around them: “The small can act very big today and pose a serious danger to world order—without the instruments of a state.”

With the reality of globalization, the world may be building the Tower of Babel once more. Because of unrestrained arrogance, Babel came to mean “confusion” and “folly” in Hebrew. Without a foundation of dependence on God and appropriate humility supporting the new technological tower, history might yet record a similar definition for globalization.