The World Is Flatter

The United States seems to have a knack for ushering in changes, then failing to adapt to the challenges they bring. The failure of the US to adapt to the technology and finance-driven globalization it introduced to the world has prompted an alarming decline. In his regular column for Businessworld, YaleGlobal editor Nayan Chanda reviews “That Used to Be Us: How America fell behind in the world it invented and how we can come back,” by New York Times columnist Thomas L. Friedman and international relations professor Michael Mandelbaum. The book contends that the nation has lived beyond its means, failed to adjust to the IT revolution and intense global competition in education, and refused to recognize a correlation between rising energy consumption and environmental destruction. Polarization of domestic politics and the pursuit of short-term financial gains have led to countless wasted opportunities in recent decades. The book is a cautionary tale for any nation that neglects readiness to change. The authors conclude that unflinching acknowledgement of challenges and collective action could restore achievement and prosperity. – YaleGlobal

The World Is Flatter

Thomas Friedman’s new book is a sequel to his bestseller – on how the US failed to harness globalization
Nayan Chanda
Tuesday, September 27, 2011

What was once merely a trend projection is now reality: America’s decline is happening, here and now. From the mass layoffs of teachers and firemen to the threat of Federal default and the European Union rebuffing Washington’s unsolicited advice, evidence of decline is everywhere. How the once-powerful hegemon reached this sorry state and how it can recover is the theme of That Used to Be Us: How America fell behind in the world it invented and how we can come back, a passionate book by New York Times columnist Thomas L. Friedman and international relations expert Michael Mandelbaum. Although the subtitle of the book is aimed at an American audience, this is a book for everyone. The reasons it sets forth for America’s decline are equally applicable to most countries challenged by globalisation — as are some of the remedies suggested.

Readers of Friedman’s popular column will be familiar with many of the ideas presented in the book. But Friedman and Mandelbaum together have assembled an impressive array of interviews, information and analysis to back their indictment of the US, its ideological warriors, self-aggrandising, feckless politicians, and self-satisfied, complacent citizenry. In a way this book is a sequel to Friedman’s wildly successful The World Is Flat, in which he traced the rise of a technology-driven globalisation flattening the world. That Used to Be Us, however, explains how America’s failure to adapt to the globalisation that it helped create now threatens its future. Three specific issues they add are the US failure to adjust to the information technology revolution; inability to cope with the large and soaring budget deficits caused by profligacy and ideological aversion to taxes; and the US incapability to manage a world of both rising energy consumption and rising ecological threat.

They point out that all three challenges require a collective response: “They are too big to be addressed by one party alone, or by one segment of the population.” And therein lies the rub. America is so viciously polarised that it is suffering from action paralysis. Friedman and Mandelbaum’s lively reporting and telling statistics sound a wake-up call. For example: “49% of American adults do not know how long it takes the Earth to revolve round the sun.” Despite their devastating portrayal of America, as “frustrated optimists” they still hope the country might return to greatness by sacrifice and collective action on the right set of policies.

The sections likely to be of particular interest to international readers explain how the confluence of globalisation and the IT revolution are changing the world, creating totally different paradigms for productivity and job creation. The failure to understand how technology is eliminating jobs could lead to the fast decline of a country as much the new opportunities, created by globalisation and the technological revolution, propel success.

Large-scale offshoring, which was earlier seen to increase productivity, is now seen as threatening the US’s economic future. “When a factory moves offshore now, it takes with it not just the jobs of today, but also perhaps the jobs of tomorrow.” They quote an Indian IT entrepreneur saying that “if all the manufacturing and then more and more of the engineering moves to India and China, it is only a matter of time before the next Google or Facebook comes out there”.

The centrality of schooling and the growing education gap between the US and other developed and developing countries are at the heart of Friedman and Mandelbaum’s concerns about the changing world. Education, they contend, is no longer a part of social policy, but an integral part of economic and national security policy. “Because of the merger of globalisation and IT revolution,” they write, “raising math, science, reading and creativity levels in American schools is the key determinant of economic growth, and economic growth is the key to national power.” They praise the education systems of Finland, South Korea and Singapore, but are silent about India, the country whose IT success inspired The World is Flat. The detailed arguments about the importance of education and promotion of creativity for a country’s economic growth should cause India’s policymakers to take heed. In the recently published list of the world’s 200 top universities, not a single Indian university features.

A flatter world does not guarantee the sustained success of the early winners — be they American or Indian. 

The author is director of publications at the Yale Center for the Study of Globalization and editor of YaleGlobal Online.

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