Friedman is Flat-Footed

13 Apr

Those who keep an eye on the Amazon.com’s bestsellers list would have already noticed that Friedman’s latest effort in punditry sits at number three on the charts. Friedman, the “mid-east scholar”, has of late sunk into crooning pithies about economics, especially globalization. He started his liaison with economics with “The Lexus and the Olive tree” and has now come with a book which rehashes all the old arguments without any extra zing – well except for the title which oozes hyperbolic charm.

The World Is Flat: A Brief History of the Twenty-first Century is a book that is thoroughly bankrupt of any new ideas. That’s not reason enough to stay away from it especially if you have been hibernating in Siberia for the past 15 or so years and have missed the entire debate on globalization. Let me step down from my “Dowdian” (pun intended) verbal gymnastics and go into the main course.

Well the book is about how globalization is increasingly leveling the playing field. It is part alarmist and part congratulatory of the phenomenon for globalization knifes through both ways – while it increases opportunity for the Bangalore geek, it simultaneously makes life more competitive for the kid in Brooklyn. Nothing new here especially for most of us who have been doing the quick step with our resume’ in the employment market without any audience. The book is full of alarmist statistics and can be read as a recipe for protectionism by even more clueless policy wonks.

What Friedman doesn’t quite explicate is that increase in tariffs, protectionism etc. were the cause of the first major market meltdown of a globalized marketplace – the great depression. Friedman also pays little attention to the fact that that world is still a, and will continue to be a very diverse place. In fact a truly “flat” world would mean that there would be no incentive for trade.

What Friedman does get correct or states partially correct is that Capitalism is headed towards a race to the bottom. Capitalists will move production from US to Mexico to China to India to Somalia to slave colonies… you get the idea.. to for not only cheap labor but to bypass environmental legislation, taxes, law itself or accountability. These are admittedly unhappy scenarios but then we here wrongly assume that capitalism is a system without breaks when in fact it may very well have a good breaking system.

So yeah, the final verdict is: read more. Friedman can get you started in the topic with a language as facile as his argument. But then go on and read Stiglitz, Bhagwati and Sachs for flat world is not enough!

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