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from the right wing of the Republican party； who do not like globalization or closer
integration with the world because it brings too many foreigners and foreign cultural
mores into America； might align themselves with unions from the left wing of the
Democratic Party； who don't like globalization for the way it facilitates the
outsourcing and offshoring of jobs。 They might be called the Wall Party and militate
for more friction and fat everywhere。 Let's face it： Republican cultural
conservatives have much more in common with the steelworkers of Youngstown； Ohio；
the farmers of rural China； and the mullahs of central Saudi Arabia； who would also
like more walls； than they do with investment bankers onWall Street orservice workers
linked to the global economy in Palo Alto； who have been enriched by the flattening
of the world。
Meanwhile； the business wing of the Republican Party； which believes in free trade；
deregulation； more integration； and lower taxes…everything that would flatten the
world even more…may end up aligning itself with the social liberals of the Democratic
Party； many of whom are East Coast or West Coast global service industry workers。
They might also be joined by Hollywood and other entertainment workers。 All of them
are huge beneficiaries of the flat world。 They might be called the Web Party； whose
main platform would be to promote more global integration。 Many residents of Manhattan
and Palo Alto have more interests in common with the people of Shanghai and Bangalore
than they do
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with the residents of Youngstown or Topeka。 In short； in a flat world； we are likely
to see many social liberals； white…collar global service industry workers； and Wall
Street types driven together； and many social conservatives； white…collar local
service industry workers； and labor unions driven together。
The Passion of the Christ audience will be in the same trench with the Teamsters and
the AFL…CIO； while the Hollywood and Wall Street liberals and the You've Got Mail
crowd will be in the same trench with the high…tech workers of Silicon Valley and
the global service providers of Manhattan and San Francisco。 It will be Mel Gibson
and Jimmy Hoffa Jr。 versus Bill Gates and Meg Ryan。
More and more； politics in the flat world will consist of asking which values；
frictions； and fats are worth preserving…which should； in Marx's language； be kept
solid…and which must be left to melt away into the air。 Countries； companies； and
individuals will be able to give intelligent answers to these questions only if they
understand the real nature and texture of the global playing field and how different
it isfrom the one that existed in the Cold War era and before。 And countries； companies；
and individuals will be able to make sound political choices only if they fully
appreciate the flattened playing field and understand all the new tools now available
to them for collaborating and competing on it。 I hope this book will provide a nuanced
framework for this hugely important political debate and the great sorting out that
is just around the corner。
To that end； the next three sections look at how the flattening of the world and the
triple convergence will affect Americans； developing countries； and companies。
Brace yourself： You are now about to enter the flat world。
America and the Flat World
：：：：： FIVE
America and Free Trade
Is Ricardo Still Right？
As an American who has always believed in the merits of free trade； I had an important
question to answer after my India trip： Should I still believe in free trade in a
fiat world？ Here was an issue that needed sorting out immediately…not only because
it was becoming a hot issue in the presidential campaign of 2004 but also because
my whole view of the flat world would depend on my view of free trade。 I know that
free trade won't necessarily benefit every American； and that our society will have
to help those who are harmed by it。 But for me the key question was： Will free trade
benefit America as a whole when the world becomes so flat and so many more people
can collaborate； and compete； with my kids？ It seems that so many jobs are going to
be up for grabs。 Wouldn't individual Americans be better off if our government erected
some walls and banned some outsourcing and offshoring？
I first wrestled with this issue while filming the Discovery Times documentary in
Bangalore。 One day we went to the Infosys campus around five p。m。 …just when the
Infosys call…center workers were flooding into the grounds for the overnight shift
on foot； minibus； and motor scooter； while many of the more advanced engineers were
leaving at the end of the day shift。 The crew and I were standing at the gate observing
this river of educated young people flowing in and out； many in animated conversation。
They all looked as if they had scored 1；600 on their SATs； and I felt a real mind…eye
split overtaking me。
My mind just kept telling me； 〃Ricardo is right； Ricardo is right； Ricardo is right。〃
David Ricardo （1772…1823） was the English economist
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who developed the free…trade theory of comparative advantage； which stipulates that
if each nation specializes in the production of goods in which it has a comparative
cost advantage and then trades with other nations for the goods in which they
specialize； there will be an overall gain in trade； and overall income levels should
rise in each trading country。 So if all these Indian techies were doing what was their
comparative advantage and then turning around and using their income to buy all the
products from America that are our comparative advantage…from Corning Glass to
Microsoft Windows…both our countries would benefit； even if some individual Indians
or Americans might have to shift jobs in the transition。 And one can see evidence
of this mutual benefit in the sharp increase in exports and imports between the United
States and India in recent years。
But my eye kept looking at all these Indian zippies and telling me something else：
〃Oh； my God； there are so many of them； and they all look so serious； so eager for
work。 And they just keep coming； wave after wave。 How in the world can it possibly
be good for my daughters and millions of other young Americans that these Indians
can do the same jobs as they can for a fraction of the wages？〃
When Ricardo was writing； goods were tradable； but for the most part knowledge work
and services were not。 There was no undersea fiberoptic cable to make knowledge jobs
tradable between America and India back then。 Just as I was getting worked up with
worry； the Infosys spokeswoman accompanying me casually mentioned that last year
Infosys India received 〃one million applications〃 from young Indians for nine
thousand tech jobs。
Have a nice day。
I struggled over what to make of this scene。 I don't want to see any American lose
his or her job to foreign competition or to technological innovation。 I sure wouldn't
want to lose mine。 When you lose your job； the unemployment rate is not 5。2 percent；
it's 100 percent。 Nobook about the flat world woul