Thomas Friedman Got It Wrong in "The World Is Flat"

Worldisflat I was reading an article about China in the May issue of Smithsonian, when I realized that Thomas Friedman, author of the book The World Is Flat, didn't get the whole story. The book's hypothesis is that because of the Internet and phone lines, we in the US are competing with cheap labor in Asia, Mexico and everywhere else.  US companies are saving money by open-sourcing, outsourcing and offshoring jobs that used to be done here.

In reality, we are taking cruel advantage of impoverished countries, paying them pennies per hour and eliminating technology, manufacturing and marketing jobs in the US. Some 13% of China's 1.3 billion people survive on a dollar a day. US companies heartlessly ignore China's one-party dictatorship, contempt for human rights and censored Internet. 

"The streets are slick with oil and garbage," Smithsonian reports. "Rows of squat warehouses roofed in corrugated steel or terra-cotta tile front sewage-choked waterways."  Workers in the Wenzhou Rui Xing Shoe Factory earn a pitiful $125 to $374 per year. They work from 8 AM to 11 PM.  It's tough to compete with workers in abject poverty.

But the imbalance won't last forever.  In other places in China, gated communities of opulent villas have mushroomed in the suburbs.  Chinese are driving Toyotas instead of riding bicycles.  Some Chinese people can now afford TVs, refrigerators and personal computers, which were once considered luxury items. Some people are getting rich. 

ChinaMeanwhile, there are nearly 75,000 protest incidents a year in China.  Some Chinese workers are getting angry and some parts of China are politically unstable. One China analyst is quoted, "when it comes to China, a number of things could still go wrong.  The stakes are very high."

Here's where Friedman got it wrong: The flat world is a two-way street.  Over time, the Chinese will want what the US has -- child safety laws, the 8-hour workday and medical benefits paid by employers.  They'll organize unions and put an end to sweatshop factories.  And the key: they'll want higher pay so they can, live a modern apartment and own a plasma TV.

Factories will no longer be able to turn out 1,000 pairs of shoes a day and still generate annual sales of millions a year. Angry mobs will insist that the employees share in the new wealth.  They'll want safe workplaces, pensions, disability care, family and medical leave, sick days and 401(k) plans.  They'll want what we have, and of course, this all costs money.  Chinese labor will no longer be cheap.  It will make more sense to keep the jobs in the US.

Friedman failed to notice that in a flat world, nice lifestyles and decent working conditions will flow into the destitute countries that we are now taking advantage of.  Perhaps US companies will move to new hellholes of poverty and rip off the workers there for a while.  But it can't last forever. Information is flows freely in a flat world, and as soon as the overseas wage slaves realize they could have a US lifestyle, they won't be such a bargain any more.

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Andy Havens - May 14, 2006 12:17 PM

Gotta disagree with you on this one, Larry.

What you're talking about here, Friedman covers in the book in discussions of what he'd probably refer to as the earlier stages of making the world "smaller" rather than "flatter." The first phase was the discovery of the New World. The 2nd was the Industrial Revolution, and the ongoing ability to leverage geographic, political and economic inequities for the beneift of specific countries, corporations and individuals. That's what you're pointing out in this post -- the ability to churn out cheap goods or services because of lower standards of living or human rights laws or labor standards in one country, and get the value for those goods elsewhere. That's been going on for about 150 years now.

The fundamental difference between the "small world" that allows for the leveraging of these inequities, and the "flat world" that Friedman discusses, is the ability for (some, and increasingly more) individuals to compete on essentially a level playing field. Without the interference of governments. And with a growing effect on how "porous" the boundaries between previous groups is becoming.

There is no way, for example, that in the "smaller world" scenarios you describe, a sweat-shop worker making shoes could directly compete for work with a cobbler in NYC. Ain't gonna happen. There are layers and layers of government, economic, beauracratic, corporate and geographic hoo-hah between that worker and his/her final customers. Same with steel workers, oil drillers, cotton farmers, etc. etc. These kinds of work are not as ammenable to "flattening," because they take place on dirt itself.

But... more and more of the wealth of nations is being tied up in what I call "content work." Knowledge work. Work done on and for computers and networks and eyeballs and eardrums. Programming, design, writing, music, art, and, yes... legal work. And more and more of other kinds of work is becoming highly dependent on knowledge work, so even "dirt work" is effected by "content work."

So... whereas I will never have a chance to interact with the sweat-shop worker who makes my sneakers... I will be able to DIRECTLY hire the guy in Bopal who will write the neat Javascript code for my new website. And I will put him in touch with the gal in Hong Kong who I've hired to illustrate the Flash demo. And I'll pay them both using PayPal. And they'll send the results to my webmaster in Alberta, Canada. That's not a "small world." That's a "flat world." There is *no* distance between Hong Kong, Bopal and Calgary as far as Apache Linux, Ajax, Flash, PDF, blogs, wikis, podcasts and Lexis is concerned.

Friedman spends lots of time talking about the two-way street, in fact. He points out the new high-rises being built in China and India. He talks about the new Techno Elite in Bangalore. And he points out that it's not just "out-sourcing," but, in some cases, "home-sourcing," as many jobs in the US "flee" from Dilbert cube-land to desks in people's home offices.

It is, as you say, a two-way street. Or a million-way street. But that's covered in the book in some detail; it's just not as popularly yakked about.

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