Kruse Kronicle

World is Flat: The Other Half

I have written in recent posts about globalization as articulated by Thomas Friedman in his “The World is Flat.” I visited the impact this is having as cultures collide. I have hinted at what this has meant (and will mean) for the US and other technologically advanced societies. But there is yet another question. What about the roughly 3 billion people, half the planet, which are as yet untouched by globalization?

Participation in the global economy requires an educated labor pool, a healthy labor pool, physical infrastructure, just social institutions, and hope. Most people can quickly identify the first four of these.

People must be literate and capable of doing basic mathematics to interact with the global economy. Diseased and malnourished people cannot function on a day-to-day basis. In Africa, where AIDS is an epidemic, not only are the victims incapacitated, but millions of caretakers are absent from the economy. Countless orphans do not receive sufficient care and education. One of the most significant sources of disease is contaminated water. Without clean wells, water delivery systems, or roads to transport resources, there is no way to maintain healthy communities. There is no way to take advantage of labor-saving and life-saving technologies with intermittent or no power. Furthermore, it makes no difference if a healthy, educated person with access to needed infrastructure wants to advance themselves if government corruption, bribes, and absurd regulations only take back whatever they accomplish. Sexist or ethnically discriminatory values keep substantial portions of populations from reaching, or even trying to reach, their potential.

I believe that significant improvement for cultures suffering from these maladies can only happen in the context of hope. There must be the belief that the future can be different. I have written elsewhere about Walter Brueggemann’s assessment that the goal of fallen human culture is to keep us in an “eternal present.” It is the belief that what is, is what always will be. It provides meaning and order, even if many or most live in deprived conditions. Challenging the “eternal present” is always dangerous because there are always some who disproportionately benefit from the arrangement, and they will retaliate. People will not change unless a new vision inspires them to risk and struggle. They need hope.

What is the role of the Church in this context?

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World is Flat: Globalization and the US Homefront

Globalization isn't just about events in faraway places. The following is a story from Thomas Friedman's "The World is Flat":

"Consider this multiple identity disorder. In 2003, the state of Indiana put out to bid a contract to upgrade the state's computer systems that process unemployment claims. Guess who won? Tata American International, which is the U.S.-based subsidiary of India's Tata Consultancy Services Ltd. Tata's bid of $15.2 million came in $8.1 million lower than that of its closest rivals, the New York-based companies Deloitte Consulting and Accenture Ltd. No Indiana firms bin on the contract, because it was too big for them to handle." pp. 205-206

Mind you, this project was about unemployment claims! The Democrat (usually protectionist) governor chose the Tata, and the Republicans (usually free trade) raised a stink about outsourcing jobs. The governor reneged on the contract shortly after it was underway and gave it to an American firm at about 50% more cost.

So…. Who is the victim in this story? American firms lost more than $20 million in business with the governor's first choice. Tata and their employees, as well as Indiana taxpayers, benefited. But politically, the governor lost. So, he reversed himself. He minimized his political damage, and an American firm got $20 million in business. However, Tata competed legitimately but was denied the $15 million in business it should have had. Indiana taxpayers had to fork out 50% more.

Stories like these are mushrooming throughout the country. Entire industries are being shuffled around as businesses slice and dice pieces of their operations and move them to locations worldwide. Foreign competitors are entering US markets. This creates lower-cost goods but removes jobs from Americans. On the other hand, the rising living standards of people worldwide is creating a greater demand for goods and service that Americans provide, thus increasing the demand for various jobs.

What is the appropriate response to these dynamics? What does it mean to be a Christian in this environment?

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World is Flat: Stormy Weather on a Global Scale

Globalization is a powerful reality. While it brings much prosperity, it intrudes ever more on various proud and ancient cultures. Tom Bandy described the phenomenon on a listserv as the collision of two major weather fronts. Having spent most of my life in the central United States tornado alley, this conjures up images of devastating storms and violent tornados.

Thomas Friedman's book "The World is Flat" tells of ten factors that are "flattening" the world. (See yesterday's post.) He is describing the integration of half the planet into one interdependent community. This integration is creating tremendous economic benefits for most of the people involved, but it is also challenging long-held cultural values in many of these places, including the United States. Those not involved in the integration are quickly becoming isolated into impoverished regions.

Almost a century ago, Marxist-Leninism (ML) emerged in Russia as a response to feeling humiliated and oppressed by both monarchical rule and the sweeping tide of capitalism in the early 20th Century. The Russians, and later the Chinese, sought out disaffected societies and tried to instigate a revolution against capitalism. They wanted to usher in a workers' paradise. The collapse of the Soviet Union, starting with the fall of the Berlin Wall on November 9, 1989, spelled the end of any major storm front between communism and the free market world. However, another storm front was right on its heels.

Friedman writes of Islamo-Leninist in his book. Many Islamic nations have a proud and ancient past. Yet around them, they see nations who do not value their culture achieving unprecedented prosperity. The cognitive dissonance between "having the true religion" while a widening array of "infidels" are rapidly prospering is very distressing. Some Muslims have sought integration between the two worlds, but others will have none of it. They aim to destroy the globalization juggernaut and usher in an Islamic paradise. Their means is the exportation of terror cells worldwide to disrupt and "close up" free societies. The explosion of a nuclear weapon in a major city would almost certainly bring globalization to a standstill. Would it stop it altogether?

Meanwhile, another potential storm front is China. China joined the World Trade Organization in 2001 and has had massive economic growth ever since. However, China has tightly controlled the level of capitalist activity it allows and is still under the control of a totalitarian government. What will happen when a sizeable middle class develops that begins to demand political freedom as has occurred ever where else free markets have penetrated? Will the "walls fall," or will there be retrenchment? This can potentially be a devastating storm front for globalization, although it is not immediately threatening.

So, what does it mean to be a Christian in this time and place? As a Christian, I think the dream of an Islamic utopia is another expression of a desire to return to Babel. So is the dream of a communist totalitarian society. On the other hand, is not the rule of the world by global corporate agendas another way of uniting the world at Babel? What does it mean to give witness to the New Jerusalem today?

More to come.

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The World is Flat

I just finished a book about globalization. I thought I would summarize the author's basic understanding of globalization. I will have more about this book in later posts.

The World is Flat: A Brief History of the Twenty-First Century

Thomas L. Friedman analyzes the key factors driving the global economy and politics. In the book's first half, he identifies ten factors he believes are "flattening" the world. Then he suggests three ways these factors are converging to reshape the world. In the book's second half, he analyzes how this will impact America, developing countries, corporations, and geopolitics.

TEN FLATTENERS

1. 11/9/89 When the Walls Came Down and the Windows Went Up

The Berlin Wall came down on 11/9, marking the end of competition between free markets and global communism. Borders were opened. People, goods, and capital were freed to flow over a much greater portion of the world.

Windows 3.0 was released six months later, allowing people to access computer technology through a graphic interface. Anyone could learn to use a computer without knowing programming languages.

2. 8/9/95 When Netscape Went Public

Netscape developed the first full-scale mass-distributed web browser and went public on 8/9/95. Until the web browser, one had to learn cryptic Unix code to access information on the internet. The web browser made the storage and retrieval of information on the internet seamless.

3. Work Flow Software

There was a time when a business might have customer service using one computer application, manufacturing another, and distribution yet another. Often these applications could not interface with each other. Workflow software came along and created a seamless integration of applications and computers.

4. Open-Sourcing. Self-Organizing Collaborative Communities

Microsoft, Netscape, Oracle, Sun, and IBM (to name a few) spent millions of dollars developing Web server software. Who won out? Not these folks. The University of Illinois' National Center for Supercomputing Applications (NCSA) was where the initial software code written for today's Web environment came from. As the NCSA became overwhelmed with internet growth, an online community of computer "geeks" collaboratively wrote patches and made improvements. The software was free for anyone to take and modify as long as they acknowledged the underlying NCSA contribution and shared any improvements with the rest of the community. This made the technology open and available to anyone with programming knowledge and ensured an ever-improving Web environment.

5. Outsourcing Y2K

India had developed some of the best technical schools in the world in the last half of the 20th Century. Still, because of a socialist bureaucratic economy, there were never enough technical jobs. Only a small minority of technicians could go to the US or Europe for jobs. Most of these MIT equivalent trained professionals were resigned to whatever work they could find, which was usually way below their skill level.

A decade ago, a worldwide concern developed about computer software that registered dates as two, rather than four, digits. It was feared that on 1/1/2000, that computers would read the day as 1/1/1900, and thereby cause massive computer failures. Fixing these problems was an enormous undertaking requiring an army of technicians.

Meantime, fiber-optic cable had been laid around the world in anticipation of a dot.com bonanza and India could now connect to US computers by high-speed internet. When the dot.com bubble burst, millions of miles of cable were sitting virtually unused and available for almost nothing.

US corporations who had been skittish about doing business with Indians before changed their tune. With the recent technology and a cheap reservoir of technicians, the Indians were the best hope. The venture worked. The experience was highly profitable and effective for everyone. An ever-expanding effort has been made ever since to take advantage of untapped human resources in areas like programming, technical support, customer service, and back-room activities in any number of industries.

6. Offshoring.

China joined the World Trade Organization on December 11, 2001, which meant they were obligated to follow the standards of other nations in trade. Because of an enormous untapped cheap labor pool, corporations have been willing to move large numbers of labor-intensive manufacturing operations to China. (This is different from outsourcing, where a corporation may "outsource" one function of their operations to another location.)

7. Supply-Chaining.

Walmart is one of the biggest and best examples of a company that has worked to create as friction-free an environment as possible, from extracting raw materials to placing a product in a customer's hands. Because of their purchasing volume, they virtually dictate price and quality standards. They compel seamless integration into their supply chain and thus with each other. Their competing suppliers and direct competitors are compelled to meet Walmart's standards to compete. This story is repeated across several industries.

8. Insourcing.

UPS once delivered only packages. Now they do things like repairing laptops at their distribution hubs and logistics for Papa John's Pizza. They help even a small company have a big presence anywhere in the world. No need to create a supply chain because UPS will be that for you. Even large corporations find the global shipping and logistics issues too complex and have invited UPS and similar companies into their back offices to run certain aspects of their businesses.

9. In-forming.

Google, Yahoo!, MSN Web Search, and the like are on the way to creating a world where anyone with access to a computer can find out anything anyplace. Search engines allow for information to be queried in ways that are only limited by the imagination of the inquirer.

10. The Steroids. Digital, Mobile, Personal, and Virtual

Digital, mobile, and personal devices have made access to information and communication more accessible than ever before. Some devices can access satellite-delivered data even in relatively underdeveloped regions with undependable power. Virtual meetings allow people half a planet apart to experience being in the same room.

THREE-WAY CONVERGENCE

Convergence I

The combination of the ten factors led to the iterative and accelerating development of new technologies and collaboration without regard to geography, distance, time, and increasingly language.

Convergence II

The reshaping of business practices and cultures that facilitate and maximize the use of new technologies and collaborations.

Convergence III

The incorporation of the half of the planet that is still largely untouched by the "flattening" of the world. Thereby tapping even more creativity and innovation.

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