Bayesian Investor Blog

Ramblings of a somewhat libertarian stock market speculator

The World Is Flat

Posted by Peter on January 30, 2006
Posted in: Book Reviews, Politics.

Book Review: The World Is Flat: A Brief History of the Twenty-first Century by Thomas L. Friedman
It’s subtitle is almost accurate, but it would be more accurate to say it’s a verbose history of a brief part of the 21st century.
I didn’t learn very much from this book, but people who haven’t been paying much attention to the news might. I normally expect reporters to be much more superficial than authors with more substantive specialties who write about what they know, and this book only weakens that expectation a tiny bit.
He does an eloquent job of disputing the notion that offshoring means sweatshops by reporting evidence that Asian workers are doing well enough that Americans should be worried more about being outcompeted on skill and motivation than on low wages. “[Bill] Gates is recognized everywhere he goes in China. Young people there hang from the rafters and scalp tickets just to hear him speak.”
He’s less eloquent at describing how offshoring affects the U.S. For a good, concise analysis, I recommend The Armchair Economist‘s chapter on the Iowa car crop (how farmers grow cars by sending food to Japan).
He doesn’t do much to anticipate new effects of globalization. For instance, his advice on what jobs won’t be outsourced suggests specialized lawyers, brain surgeons, robot operators, nurses, etc. Many of those only require modest advances in communications infrastructure to be offshorable, the rest would require some improvements in robotics to be offshorable. And he ignores the possibility that most offshorable jobs will be replaced by more intelligent software in a decade or two.
His descriptions of the large companies that are playing interesting roles in flattening the world tends toward acting as their PR agents. For example, he reports that Google has had an equalizing effect (e.g. Colin Powell used to rely on aides to do better research than I could afford, now he uses Google routinely for research that typical users can do just as easily), but neglects to notice the risks of having so much of the world’s access to information go through one company in one political jurisdiction.
He says “If President Bush made energy independence his moon shot, in one fell swoop he would dry up revenue for terrorism”. It’s somewhat unlikely that jihadists would otherwise get much money from oil. It’s wildly implausible that the U.S. government is as good at affordable mass production as it was at solving a prestigious problem by throwing money at it. And the amount of money that investors have poured into photovoltaics companies in the past few months leaves me wondering why we should think there are opportunities that will be overlooked if the government fails to throw money at energy problems.
But he makes up for that with occasional gems such as this quote from Bill Gates: “Someone estimated that the cost of saving a life in the U.S. is $5 or $6 million – that is how much our society is willing to spend. You can save a life outside the U.S. for less than $100.” I suspect that $100 is a bit misleading because it ignores the time needed to inform yourself about whether the money is going to be spend productively, but the double standard is quite real.

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