Our Brave New (Flat) World
By Kevin Frost
In a strange way, this month’s release of Thomas Friedman’s new globalization book, The World Is Flat: A Brief History of the Twenty-first Century, represents the end of an era for me personally. Prior to the first day of classes my freshman year at Lehigh a friend told me about a book called The Lexus and the Olive Tree, thinking that it would be of interest to me. It was of interest, of course, and from then on I became a big reader of Thomas Friedman.
Prior to reading Lexus, however, I did not know much about globalization. I knew how to spell it, and I knew that it, in its most basic sense, meant that the world is getting “smaller.” I did not know that I could come to Lehigh and essentially study globalization – the synergy of economics, technology, and international politics. As a freshman, I had my interests; as a sophomore, I had my majors; now, as a junior, I have my concerns. The World Is Flat just woke me up.
To be sure, I support globalization. My “concerns” will never materialize into calls for protectionist tariffs, prohibiting outsourcing, or the abolition of free trade agreements. What I want for the United States is economic supremacy within the parameters of a global free market. This can continue in the nascent years of the new millennia, but it has and will continue to become increasingly difficult.
Here in lies the end of my era. According to Friedman, the world is now “flat.” His argument makes perfect sense: a generation ago, if given the choice, one would rather be an average student in America than a genius in China or India. This is no longer true, as technology, heavy intellectual investment by foreign nations, and global economic liberalization has leveled (or flattened) the playing field. It pays to be a genius anywhere in the world today, and the American free ride is screeching to a halt. This hit me like a ton of bricks because, not only is it true, it’s coming when I am a year from graduation. Three years ago, during the Lexus era, there was all the reason for optimism. Today there is all the reason for increased skepticism.
The barriers to entry in the global marketplace today consist of a computer and internet connection. Friedman argues that the United States needs to wake up and realize that this is all it takes to plug into the global economy. For an example of our obliviousness to this reality let us look to outsourcing. Outsourcing was a hot-topic in the past election cycle, one which became a political issue for the absolute wrong reasons. It is not a question of big business versus the average worker, but a window into the future which shows a greater battle: one, perhaps, for our economic survival.
Outsourcing is not a bad thing; in fact I contend that it is a great thing. Today, we outsource production and services. The ideas, intellectual property rights, and vast majority of capital remain in America. In the not too distant future, Friedman argues, this will change, as the tags will go from “‘made in China’ to ‘designed in China’ to ‘dreamed up in China.’” Places like China and India are investing heavily in science and engineering and some day they will develop newer and better technologies on their own. Think Japan with ten times the population. Japan is a huge competitor at present, but they are hampered by a smaller, aging population, scarce land, and few natural resources. China and India have a seemingly limitless population to educate, and though we may have more people per capita graduating in science and engineering, the important statistic is the arithmetic total. As Bill Gates said recently, “in 2001, India graduated almost a million more students from college than the United States did. China graduates twice as many students with bachelor's degrees as the U.S., and they have six times as many graduates majoring in engineering. In the international competition to have the biggest and best supply of knowledge workers, America is falling behind.''
Now add these statistics to your own knowledge or hunches about our economy. Our trade deficit is growing, as is our national debt. We are fighting a senseless war in Iraq and maintaining troop levels overseas which require an “emergency” support bill of several billion dollars from Congress seemingly every other month. Are we investing in our future? Sure, it’s great that the Iraqi people are free, but has it been worth the toll on our economy? It has, only to the extent that it prevents another attack which would cost us more than what we are spending on the war. First, I don’t think anything has been prevented. Second, if we are attacked the economic damage will be, save a nuclear blast, significantly less than what has been spent in Iraq.
Our elected representatives are spending time bickering about Terri Schiavo, stonewalling appointees, and leading us down an ever-perilous path where religion and government combine to blind us all. This will be the failure of the United States if we do nothing.
Four years ago, if we had invested money in stem cells it is entirely possible that we could be on the verge of a huge breakthrough which would pour billions of dollars into our economy. You can thank the evangelicals for sending that potential windfall to Europe. If it leads to a cure for Parkinson’s, I’m fairly certain the evangelicals will not hesitate to use the therapy, and their money will leave the country to feed one of our biggest competitors.
Ten years ago, if we had invested more money into alternative energy sources it is entirely possible that the truck my father just bought would be getting triple the mileage it gets today. We would not be buying as much oil, and other countries would be coming to us with their money for our technology. But I guess it’s not all bad; Exxon Mobil recently posted the largest quarterly earnings in history for a publicly traded American company at $8.4 billion. Those of us who dislike wealth redistribution should be mildly upset about that number.
Indeed, the world is becoming flat. We can no longer look down on the other economies in the world. Some day soon, being born in America may not be the blessing it is today – we may even have to look up. I hope we aren’t too lazy to climb back up that summit if we fall, because I’m fairly sure we are lazy enough to procrastinate ourselves down the mountain.