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Monday, February 19, 2007

 

The World is Flat and Globalization

I'm currently half way finishing off reading 'The World is Flat', a book written by award winning author, Thomas Friedman. It has been on my to-buy booklist since early last year and only managed to buy it few weeks ago. But anyway, it's all good. It's such a coincidence too that bits of the things that were written in the book are somehow related to my current job industry - Ajax, VOIP, salesforce.com etc. I'm not going to write much about the book though, but all i can say is that it is highly informative. If you want to get a glimpse of how globalization and the flat world works, then this book is a must.
Before reading this book, I had never thought that America too is under threat of globalization (after all they're the one who started it) - like the threat of losing traditional middle class jobs being outsourced to China and India; because I used to believed that globalization is basically just a one way street, meaning, from West to East, ie Western multinationals exploiting third world nation's natural resources, cheap labor force and such.
I like one section in the book on 'India versus Indiana: Who is Exploiting Whom?' where Tom posed an intesting question to ponder on;

..are those Indian engineers now exploiting the people of Indiana by offering to revamp their ... for much less money than an American consulting firm? Or were the people of Indiana exploiting those cheaper Indian engineers? Who is exploiting whom in this story?

With whom does the traditional Left stand in this story? With the knowledge workers from the developing world, being paid a decent wage, who are trying to use their hard-won talents in the developed world? Or with the politicians of Indiana, who wanted to deprive these Indian engineers of work so that it could be done, more expensively, by their constituents?

"Professor Sandel argued that what I called collaboration could be seen by others as just a nice name for the ability to hire cheap labor in India. You cannot deny that - when you look at it from an American perspective, But that is only if you look at it from one side. From the Indian worker's perspective, that same form of collaboration, outsourcing, could be seen as another name for empowering individuals in the developing world as never before.."

That particular case became a hot political issue a few years back between the so-called champions of free trade Republican and the pro-labor Democrats. To me, to put it in simple words of what the Indian consulting firm did, they beat the Americans at their own game. Same thing like what Indian steel giant, Lakhsmi Mittal did in Europe. Globalization is no more a one-way street. Yes. But, although I like and agree much of what being written in that book, I'm certainly not an advocate of free trade and open market, as what Tom self-declared in his book. There are things which I believe the government need to have a hand in business and trade. I believe in a controlled capitalism system. Not to be confused with a socialist type state-controlled economy. Or whatever term you wish to name it. For instance, China is no longer considered as a Communist state, as they are already extremely embracing capitalism now, or as what they call it the Chinese style political economy.
A totally open and free market system would only bring disaster to developing countries. There is absolutely no such thing as an absolute free trade, even the champions of free trade in America still practices protectionism, while at the same time demanding poorer countries to open up their market and lower their tariffs. A clear double standard! Well, not much of a surprise coming from America.

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