The Fragility of a Flat World

The world is flat! So says the columnist Thomas Friedman, who chose that provocative title for his bestselling book to awaken people to the dramatic effects that technology is having on the world economy. Distance is shrinking. Geographical barriers no longer provide easy protection. Manufacturing workers and high-tech professionals alike in Europe and America are being challenged by global competition. Western consumers who call a local company are likely to speak to someone in India.

Skeptics have pointed to the limits of Friedman’s metaphor. As one put it, the world is not flat, but “spiky.” A contour map of economic activity in the world would show mountains of prosperity and many ravines of deprivation. Moreover, distance is far from dead. Even neighbors with low tariff barriers, like Canada and the United States, trade more internally than across borders. Seattle and Vancouver are close geographically, but Vancouver trades more with distant Toronto than with nearby Seattle.

Such criticism notwithstanding, Friedman makes an important point. Globalization, which can be defined as interdependence at inter-continental distances, is as old as human history. Witness the migration of peoples and religions, or trade along the ancient silk route that connected medieval Europe and Asia. But globalization today is different, because it is becoming quicker and thicker.

After the first trans-Atlantic cable in 1868, Europe and America could communicate in a minute. In 1919, the economist John Maynard Keynes described the possibility of an Englishman in London using a telephone to order goods from around the world to be delivered to his house by the afternoon. But Keynes’s Englishman was wealthy and thus exceptional. Today, hundreds of millions of people around the world have access to global goods in their local supermarkets.