Stop the presses! The world is not flat! Seriously, someone needs to alert Thomas Friedman as soon as possible. The over-mustachioed and under-informed pundit has made a name (and fortune) for himself as the prophet of a glorious future in which globalization makes all things possible and all things wonderful. The thing is, no matter how appealing and optimistic, his overly simplistic tripe is just wrong.
Pankaj Ghemawat, a professor of global strategy at IESE business school, has written a brilliant and concise piece in Foreign Policy that eviscerates the idiocy that has become conventional wisdom. Ghemawat shows how the vast majority (typically 90%) of “globalization indicators,” like investment and communication, continue to operate within a nation’s borders. But this isn’t just a matter of being wrong. With something as nebulous as globalization, the assumptions made by academics and public figures are taken as truth, not theory, and have powerful implications for policy. For example, the decades long assault on welfare expenditure has operated under the assumption that it is incompatible with globalized competition.
As Ghemawat sharply observes:
“The champions of globalization are describing a world that doesn’t exist. It’s a fine strategy to sell books and even describe a potential environment that may someday exist. Because such episodes of mass delusion tend to be relatively short-lived even when they do achieve broad currency, one might simply be tempted to wait this one out as well. But the stakes are far too high for that. Governments that buy into the flat world are likely to pay too much attention to the “golden straitjacket” that Friedman emphasized in his earlier book, The Lexus and the Olive Tree, which is supposed to ensure that economics matters more and more and politics less and less. Buying into this version of an integrated world—or worse, using it as a basis for policymaking—is not only unproductive. It is dangerous.”Cross-posted at Campus Progress