It seems almost quaint for me to review Thomas Friedman's The World Is Flat (TWIF), as it has already passed into the firmament of "classic" business books. I doubt that there has been a more cited or talked-about book in economics over the past three years. And this review is of the first edition from 2005, not the third edition released the middle of last year. So why bother? Because influential books always deserve a look.
Let me briefly outline my pre-existing sense of Tom Friedman. I've seen him on TV a couple of times, and I've seen many quotes from TWIF in other books and articles. My opinion (before reading): good, boots-on-the-ground reporter; unabashed cheerleader for globalization; entertaining, enthusiastic speaker. After reading: pretty much the same, except I think that some of his arguments have been minimized by other writers, and some of his arguments are pretty half-baked.
I'm not going to attempt a full review of these 488 pages. I will try to pull out some low points and offer my opinions of them. [That sounded a little harsh. There's a lot that's good here, a very accessible writing style, entertaining anecdotes. But a book with this much mindshare needs to have its flaws pointed out, as it suffers no lack of fans.]
First, Friedman's basic contention that the speed at which the world operates is increasing is essentially incontestable. Amazon, UPS, Dell, Google, etc., all provide proof that the world is getting smaller and that increasing numbers of people have access to more information and more goods.
However, the first 200 pages of TWIF appear to be a long press release from the Globalization Institute (if there is such a thing), as Friedman travels around China and India to discover that those countries are becoming more integrated into the world system. This is presented in rosy terms, the happy foreigners with perfect English manning the call centers in India, the world-class engineers of China producing flawless designs.
As a software developer, I've been involved with a couple of offshoring projects. Here's the truth: it's work, not magic. India has no monopoly on technical brilliance (nor are they, as one letter writer to a technical magazine stated about a year ago, "genetically superior" in technology). I've worked with Indians. Some of them are excellent, some are lousy, and the vast majority are right in the middle. I could say the same about Chinese, or Pakistanis, or, for that matter, Americans. To read Friedman, you would think that we are inexorably fated to lose out to the brilliant, eager young people he sees in Bangalore. Maybe Friedman needs to spend some time in his own country.
What's most curious is that he blows by the cost factor. It's incontrovertible that many companies have outsourced to get rid of union contracts, many have offshored to save major dollars (many of which seem to end up in the accounts of the CEOs and CTOs). You won't read that in TWIF, except for a brief mention that it isn't happening, that American countries are forced into offshoring by the pull of the vast talent found overseas. That the CEOs Friedman interviews might have an incentive to cover up the real reasons, especially as offshoring threatened to become an issue during the period that he did these interviews.
This is pure bunk. Most executives have surprisingly little sense of the quality of their complex products. The prime mover behind offshoring has been variable compensation packages that reward CEOs who get a quick cost advantage over competitors, not the need to tap rare talent wherever it may be. The CEOs love to talk this up, or the extent to which they're helping the downtrodden of the world, but none of those explanations are convincing.
I'm not saying that companies are turning work over to rankly unqualified contractors; India and China have done a remarkable job building their human infrastructure, laying that on top of a telecommunications infrastructure (largely built by America at low cost).
A note here about asymmetry: It is not popular to think about our government building us up in the same way. After all, that would be trying to pick winners, and, according to current conventional wisdom, government just can't do that. China, on the other hand, decided that engineering was going to be a winner - India, computer technology. These were not exactly huge gambles. And they support their students with public money. A student at the fabled Indian Institute of Technology pays about $750 a year for tuition, room, and board. Textbooks identical to those used in America cost at most a tenth of what they do here. In contrast, MIT charges approximately $45,000 a year.
Friedman, a long-time political reporter, occasionally lets his exuberance get away from him. His contention that China will almost certainly become more politically free as their economy frees them is not based on anything but hope. It would be nice, but the Chinese seem far more interested in snowboarding and cars than in having a voice in their nation.
There are times in TWIF when you will wonder if Friedman is reading his own text for anything other than corporate profits. I, Robot was a profoundly disappointing movie for me, given my respect for Dr. Asimov, but there was a very true moment in the beginning. The first robot encountered by Will Smith was a UPS driver. Read the pages devoted to the sparkling brilliance of the UPS corporate model, particularly the part where their Maryland think tank churns out algorithms that tell drivers how to pack their trucks, exactly what route to take, and the precise order of delivery (a driver is not allowed, by the technology, to deliver out of order). Essentially the UPS driver is already a robot, the Maryland eggheads just haven't figured out how to get the mechanical ones to drive. The conflict between this and the oft-mentioned contention that the offshoring of menial jobs will lead to an upgrade of jobs in the U.S. is obvious.
I won't discuss the individual forces that Friedman says are flattening the world (and if you aren't tired of the word "flat" by the end of this book, you are made of sterner stuff than I am). His coining of terms like "the triple convergence" and "the great sorting out" get to be a little "look-at-me" sometimes, but I can't deny that they are reflecting real world occurrences. The question is, does Friedman really understand the causes and implications?
Here, about halfway through TWIF, Friedman finally discusses America. There's a good chance the average reader has, by this time, wondered if he would ever get to it. But he does.
First, a defense of free trade. This short chapter of 12 pages is important, which is why it's a shame that it's so muddled. Friedman is not an economist, probably a good thing, but he reduces the complexity of this argument to slogans. His only source seems to be Stanford economist Paul Romer, and single-sourcing is rarely a good idea. The thrust of his argument is: "There may be a limit to the number of good factory jobs in the world, but there is no limit to the number of idea-generated jobs in the world [author's emphasis]". No real basis for this is provided, it says nothing about the mismatch between jobs and human endowments, it says nothing about the rate at which those idea-generated jobs can be absorbed - it's just magic.
And just a short time later comes the next italicized point: "The Indians and Chinese are not racing us to the bottom. They are racing us to the top - and that is a good thing!" This, I think, is the intellectual core of the whole book, the idea that the U.S. will basically hold where we are, and the billions of other people will build their suburban subdivisions, buy their big-screen TVs, wear their Louis Vuitton - and nothing else will change.
But Friedman himself has just spent pages showing us how change brings about other unforeseen changes. This is when I find TWIF most unsatisfying, when Friedman fails to follow his own logic to a conclusion that isn't utopian. His example of India's plan to develop a $2200 car, does he have any idea what the logical consequences of such a car would be? I don't know for certain if the result would be good overall or bad overall, but I know the world would change, creating winners and losers.
After this, TWIF moves into advice for Americans. As I understand it, the two newer editions elaborate on this part, so I should perhaps withhold most comments until I read a newer version. I will just say that he posits that the people who will flourish in this new world are those who are either special or adaptable. Special people cannot be outsourced, and Friedman chooses as examples Michael Jordan's jump shot and a bypass surgeon's technique as things that are non-fungible, so not offshorable. Neither example is particularly potent, as the NBA discusses an overseas team, and insurance companies are seriously looking into paying for overseas surgery.
So we're left with adaptability. How will we acquire that skill, the ability to "learn how to learn"? Obviously, the answer is lifelong learning. I want you to look nine paragraphs back, where I discussed the relative cost of acquiring that learning. While the U.S. blathers over whether to increase small Pell Grants by a minor amount, China and India are sending thousands of students through school. I understand the theory that, one day very soon, Americans will have to plan on having five or more careers; I just don't see how we'll get there from where we are.
And this is my basic contention about this book. It's something I've written about before, but all of Friedman's talk about how under-educated Americans are, how unambitious we are compared to those Indians who "looked as if they had scored 1,600 on their SATs," all of this is pretty much true and well-understood. The question is, how do we change our institutions and our attitudes to get us to take education seriously, to understand the challenge that faces this nation? If you believe that education is the answer, and I have reservations as to how true that is when the playing field depends more on comparative salaries than comparative value, then you have to provide a mechanism by which Americans are going to rise to that. Just saying that the answer is to fund the NSF (to get more American kids into science) and opening the doors to immigration (so smart foreign kids can come here and become Americans) is facile, and unhelpful.
Friedman also minimizes the way in which American corporations "cook the books." He cites the remarkable success of Microsoft Research Asia without discussing the differences in policy. I spent a few years at AT&T - Bell Labs in the early '90s, a time when it was still considered one of the pre-eminent research institutions in the world (in retrospect, they were already slipping, but...). My group was made up of PhDs and masters' degree holders, but, in monthly rotation, we each had to take the responsibility of filing standards documents. In effect, trained engineers were acting as clerks. In contrast, at Microsoft Research Asia, the researchers "have administrators - we hire people to do the dirty work."
Similarly, something Friedman doesn't cite, but could have - the attainment of certifications by Indian software companies. I've written about this before, how certification is done and how frequently it's taken as a joke by American companies. But many articles tout the achievement of CMM level 5 by Indian software companies. (For a discussion of the controversy about this, look here.) Regardless of the value of such "achievements," these are the result of an investment of time and money. In America, companies won't pay to get these, largely because they take real resources, usually expensive ones, off-line to create process flows and other non-software documentation. The cost is far less in India, so they're easier to get, and then that's used as justification for moving jobs.
At any rate, Friedman attempts to find solutions to our growing gap (he doesn't hit on one obvious one, American companies could start rehiring experienced engineers back from Best Buy and Circuit City, where they're working because they have to eat). I'm not going to go through this, it's the usual laundry list of lifelong learning opportunities, wage insurance, and other things that government or business will provide. Corporations "should" become more socially active, using their power to improve the world. And parents should get better by inspiring their children. All of these sound fine, none of them is going to happen, so now what do we do? (And it's just irritating when a reporter who should know better is led through a "compassionate corporate" program by a PR person and believes that we can solve problems with more of the same - pretty naive.)
The final 160 pages of TWIF present more heroic stories of the glories of globalization. There are various Friedman rules, neologisms, and vague advice as to how developing countries and businesses can thrive. Again, the author fails to reason certain things through.
Venture capital firms will not touch a company that doesn't have an outsourcing strategy. Doesn't that imply that the new-idea firms that will lead the U.S. into the new century won't generate many jobs? Of course it does (that's why Hillary Clinton's idea that alternative energy will inexorably lead to well-paying U.S. jobs is flawed).
Trust is critical in the new flat world, as we do business with people we don't even know over the Internet. But we don't trust our current businesses, largely because our executives do everything possible to gain at the expense of others. How do we reconcile that?
The world will be a better, safer place when we are all part of the same vast global supply chains. But there's more to do, for example limiting nuclear proliferation so that stateless entities, not part of any supply chain, can't destroy us all. So we won't allow any new nuclear states. That a country that has moved itself into a strong economic position might want what at least eight powerful countries already have, well, we'll surmount that, somehow.
There are other examples of this "best of all possible worlds" thinking. It's disappointing that such an influential book, one that is practically a handbook (and, realistically, a justification) for globalization didn't deal more rationally with the big issues that arise, especially as they affect the United States.
You see, when the world becomes flat, anyone who sticks up is going to be leveled off, whether they like it or not. The U.S. sticks up in a lot of ways; for better or worse, the sandpaper is coming, and we are most assuredly not ready for it. This book doesn't help us with that anywhere close to as much as it thinks it does.
Let me briefly outline my pre-existing sense of Tom Friedman. I've seen him on TV a couple of times, and I've seen many quotes from TWIF in other books and articles. My opinion (before reading): good, boots-on-the-ground reporter; unabashed cheerleader for globalization; entertaining, enthusiastic speaker. After reading: pretty much the same, except I think that some of his arguments have been minimized by other writers, and some of his arguments are pretty half-baked.
I'm not going to attempt a full review of these 488 pages. I will try to pull out some low points and offer my opinions of them. [That sounded a little harsh. There's a lot that's good here, a very accessible writing style, entertaining anecdotes. But a book with this much mindshare needs to have its flaws pointed out, as it suffers no lack of fans.]
First, Friedman's basic contention that the speed at which the world operates is increasing is essentially incontestable. Amazon, UPS, Dell, Google, etc., all provide proof that the world is getting smaller and that increasing numbers of people have access to more information and more goods.
However, the first 200 pages of TWIF appear to be a long press release from the Globalization Institute (if there is such a thing), as Friedman travels around China and India to discover that those countries are becoming more integrated into the world system. This is presented in rosy terms, the happy foreigners with perfect English manning the call centers in India, the world-class engineers of China producing flawless designs.
As a software developer, I've been involved with a couple of offshoring projects. Here's the truth: it's work, not magic. India has no monopoly on technical brilliance (nor are they, as one letter writer to a technical magazine stated about a year ago, "genetically superior" in technology). I've worked with Indians. Some of them are excellent, some are lousy, and the vast majority are right in the middle. I could say the same about Chinese, or Pakistanis, or, for that matter, Americans. To read Friedman, you would think that we are inexorably fated to lose out to the brilliant, eager young people he sees in Bangalore. Maybe Friedman needs to spend some time in his own country.
What's most curious is that he blows by the cost factor. It's incontrovertible that many companies have outsourced to get rid of union contracts, many have offshored to save major dollars (many of which seem to end up in the accounts of the CEOs and CTOs). You won't read that in TWIF, except for a brief mention that it isn't happening, that American countries are forced into offshoring by the pull of the vast talent found overseas. That the CEOs Friedman interviews might have an incentive to cover up the real reasons, especially as offshoring threatened to become an issue during the period that he did these interviews.
This is pure bunk. Most executives have surprisingly little sense of the quality of their complex products. The prime mover behind offshoring has been variable compensation packages that reward CEOs who get a quick cost advantage over competitors, not the need to tap rare talent wherever it may be. The CEOs love to talk this up, or the extent to which they're helping the downtrodden of the world, but none of those explanations are convincing.
I'm not saying that companies are turning work over to rankly unqualified contractors; India and China have done a remarkable job building their human infrastructure, laying that on top of a telecommunications infrastructure (largely built by America at low cost).
A note here about asymmetry: It is not popular to think about our government building us up in the same way. After all, that would be trying to pick winners, and, according to current conventional wisdom, government just can't do that. China, on the other hand, decided that engineering was going to be a winner - India, computer technology. These were not exactly huge gambles. And they support their students with public money. A student at the fabled Indian Institute of Technology pays about $750 a year for tuition, room, and board. Textbooks identical to those used in America cost at most a tenth of what they do here. In contrast, MIT charges approximately $45,000 a year.
Friedman, a long-time political reporter, occasionally lets his exuberance get away from him. His contention that China will almost certainly become more politically free as their economy frees them is not based on anything but hope. It would be nice, but the Chinese seem far more interested in snowboarding and cars than in having a voice in their nation.
There are times in TWIF when you will wonder if Friedman is reading his own text for anything other than corporate profits. I, Robot was a profoundly disappointing movie for me, given my respect for Dr. Asimov, but there was a very true moment in the beginning. The first robot encountered by Will Smith was a UPS driver. Read the pages devoted to the sparkling brilliance of the UPS corporate model, particularly the part where their Maryland think tank churns out algorithms that tell drivers how to pack their trucks, exactly what route to take, and the precise order of delivery (a driver is not allowed, by the technology, to deliver out of order). Essentially the UPS driver is already a robot, the Maryland eggheads just haven't figured out how to get the mechanical ones to drive. The conflict between this and the oft-mentioned contention that the offshoring of menial jobs will lead to an upgrade of jobs in the U.S. is obvious.
I won't discuss the individual forces that Friedman says are flattening the world (and if you aren't tired of the word "flat" by the end of this book, you are made of sterner stuff than I am). His coining of terms like "the triple convergence" and "the great sorting out" get to be a little "look-at-me" sometimes, but I can't deny that they are reflecting real world occurrences. The question is, does Friedman really understand the causes and implications?
Here, about halfway through TWIF, Friedman finally discusses America. There's a good chance the average reader has, by this time, wondered if he would ever get to it. But he does.
First, a defense of free trade. This short chapter of 12 pages is important, which is why it's a shame that it's so muddled. Friedman is not an economist, probably a good thing, but he reduces the complexity of this argument to slogans. His only source seems to be Stanford economist Paul Romer, and single-sourcing is rarely a good idea. The thrust of his argument is: "There may be a limit to the number of good factory jobs in the world, but there is no limit to the number of idea-generated jobs in the world [author's emphasis]". No real basis for this is provided, it says nothing about the mismatch between jobs and human endowments, it says nothing about the rate at which those idea-generated jobs can be absorbed - it's just magic.
And just a short time later comes the next italicized point: "The Indians and Chinese are not racing us to the bottom. They are racing us to the top - and that is a good thing!" This, I think, is the intellectual core of the whole book, the idea that the U.S. will basically hold where we are, and the billions of other people will build their suburban subdivisions, buy their big-screen TVs, wear their Louis Vuitton - and nothing else will change.
But Friedman himself has just spent pages showing us how change brings about other unforeseen changes. This is when I find TWIF most unsatisfying, when Friedman fails to follow his own logic to a conclusion that isn't utopian. His example of India's plan to develop a $2200 car, does he have any idea what the logical consequences of such a car would be? I don't know for certain if the result would be good overall or bad overall, but I know the world would change, creating winners and losers.
After this, TWIF moves into advice for Americans. As I understand it, the two newer editions elaborate on this part, so I should perhaps withhold most comments until I read a newer version. I will just say that he posits that the people who will flourish in this new world are those who are either special or adaptable. Special people cannot be outsourced, and Friedman chooses as examples Michael Jordan's jump shot and a bypass surgeon's technique as things that are non-fungible, so not offshorable. Neither example is particularly potent, as the NBA discusses an overseas team, and insurance companies are seriously looking into paying for overseas surgery.
So we're left with adaptability. How will we acquire that skill, the ability to "learn how to learn"? Obviously, the answer is lifelong learning. I want you to look nine paragraphs back, where I discussed the relative cost of acquiring that learning. While the U.S. blathers over whether to increase small Pell Grants by a minor amount, China and India are sending thousands of students through school. I understand the theory that, one day very soon, Americans will have to plan on having five or more careers; I just don't see how we'll get there from where we are.
And this is my basic contention about this book. It's something I've written about before, but all of Friedman's talk about how under-educated Americans are, how unambitious we are compared to those Indians who "looked as if they had scored 1,600 on their SATs," all of this is pretty much true and well-understood. The question is, how do we change our institutions and our attitudes to get us to take education seriously, to understand the challenge that faces this nation? If you believe that education is the answer, and I have reservations as to how true that is when the playing field depends more on comparative salaries than comparative value, then you have to provide a mechanism by which Americans are going to rise to that. Just saying that the answer is to fund the NSF (to get more American kids into science) and opening the doors to immigration (so smart foreign kids can come here and become Americans) is facile, and unhelpful.
Friedman also minimizes the way in which American corporations "cook the books." He cites the remarkable success of Microsoft Research Asia without discussing the differences in policy. I spent a few years at AT&T - Bell Labs in the early '90s, a time when it was still considered one of the pre-eminent research institutions in the world (in retrospect, they were already slipping, but...). My group was made up of PhDs and masters' degree holders, but, in monthly rotation, we each had to take the responsibility of filing standards documents. In effect, trained engineers were acting as clerks. In contrast, at Microsoft Research Asia, the researchers "have administrators - we hire people to do the dirty work."
Similarly, something Friedman doesn't cite, but could have - the attainment of certifications by Indian software companies. I've written about this before, how certification is done and how frequently it's taken as a joke by American companies. But many articles tout the achievement of CMM level 5 by Indian software companies. (For a discussion of the controversy about this, look here.) Regardless of the value of such "achievements," these are the result of an investment of time and money. In America, companies won't pay to get these, largely because they take real resources, usually expensive ones, off-line to create process flows and other non-software documentation. The cost is far less in India, so they're easier to get, and then that's used as justification for moving jobs.
At any rate, Friedman attempts to find solutions to our growing gap (he doesn't hit on one obvious one, American companies could start rehiring experienced engineers back from Best Buy and Circuit City, where they're working because they have to eat). I'm not going to go through this, it's the usual laundry list of lifelong learning opportunities, wage insurance, and other things that government or business will provide. Corporations "should" become more socially active, using their power to improve the world. And parents should get better by inspiring their children. All of these sound fine, none of them is going to happen, so now what do we do? (And it's just irritating when a reporter who should know better is led through a "compassionate corporate" program by a PR person and believes that we can solve problems with more of the same - pretty naive.)
The final 160 pages of TWIF present more heroic stories of the glories of globalization. There are various Friedman rules, neologisms, and vague advice as to how developing countries and businesses can thrive. Again, the author fails to reason certain things through.
Venture capital firms will not touch a company that doesn't have an outsourcing strategy. Doesn't that imply that the new-idea firms that will lead the U.S. into the new century won't generate many jobs? Of course it does (that's why Hillary Clinton's idea that alternative energy will inexorably lead to well-paying U.S. jobs is flawed).
Trust is critical in the new flat world, as we do business with people we don't even know over the Internet. But we don't trust our current businesses, largely because our executives do everything possible to gain at the expense of others. How do we reconcile that?
The world will be a better, safer place when we are all part of the same vast global supply chains. But there's more to do, for example limiting nuclear proliferation so that stateless entities, not part of any supply chain, can't destroy us all. So we won't allow any new nuclear states. That a country that has moved itself into a strong economic position might want what at least eight powerful countries already have, well, we'll surmount that, somehow.
There are other examples of this "best of all possible worlds" thinking. It's disappointing that such an influential book, one that is practically a handbook (and, realistically, a justification) for globalization didn't deal more rationally with the big issues that arise, especially as they affect the United States.
You see, when the world becomes flat, anyone who sticks up is going to be leveled off, whether they like it or not. The U.S. sticks up in a lot of ways; for better or worse, the sandpaper is coming, and we are most assuredly not ready for it. This book doesn't help us with that anywhere close to as much as it thinks it does.
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