Partial Review - The World is Flat

In chapter five of The World is Flat, Friedman discusses “America and Free Trade” and how each are being affected, and will be affected, by the “flattening” of our world. As Friedman traveled to Bangalore, India he began to wonder if David Ricardo’s (1772-1823) theory concerning free-trade was still correct. Ricardo was the “English economist who developed the free-trade theory of comparative advantage” (264). The “Ricardian Trade Theory” says that, if there are two trading partners with different opportunity costs then there exists a term of trade at which both parties are made at least as well off by specializing and trading with one another. With this theory, our world today would still benefit overall with free-trade even if some individuals might have to shift jobs in the transition. Friedman believes that “Ricardo is still right and that more American individuals will be better off if we don’t erect barriers to outsourcing, supply-chaining, and off shoring than if we do” (264).

Friedman does believe that Ricardo’s theory is still correct today even though there are different types of goods and services being traded today than when Ricardo came up with his theory. “When Ricardo was writing, goods were tradable, but for the most part knowledgeable work and services were not” (264). Although these are very different key items that are being traded today than were traded during Ricardo’s time, Friedman believes that the theory is still applicable. Yes, some services are being outsourced to China and India however that just means different services will be needed first hand in America, one example that Friedman gives, is the services of personal relationships with clients. Yes some technical jobs concerning taxes can be done overseas but there still needs to be personal relationships with clients and these are the services that will be more in demand in the United States as jobs are outsourced.

In chapter five Friedman also addresses the “lump of labor theory” which is “the notion that there is a fixed lump of labor in the world and that once that lump is gobbled up, whether by Americans or Indians or Japanese, there won’t be any more jobs to go around” (266). However Friedman does not agree with this theory, his main argument against it is “it is based on the assumption that everything that is going to be invented has been invented” (266). Friedman believes that this assumption misses the fact that although jobs in bulk are being outsourced to other countries, there are many new jobs being created in small numbers of fives, tens or twenties by small companies that are going unnoticed. Although these jobs are not being noticed by the majority of our population, Friedman wants to make sure that people know this is happening, and jobs are being created even if it is in small numbers.

Another main point of this chapter is the fact that America needs to focus on creating more idea based goods. Paul Romer, an economist, believes that in order for America to succeed in this new flatter world, America needs to “churn out knowledge workers who are able to produce idea-based goods that can be sold globally and who are able to fill the knowledge jobs that will be created” (269). His main argument behind this is that there “may be a limit to the number of good factory jobs in the world, but there is no limit to the number of idea-generated jobs in the world” (269). When America thinks about all the jobs being outsourced to other countries we need to not forget the fact that there is not a set number of jobs in the world, and remember that there is never an end to the number of ideas that can be thought up.

In the next chapter of Friedman’s book he talks about what he considers to be the “Untouchables” and finding a new middle that consists of jobs that will be less vulnerable to being outsourced. Friedman also again brings up the different levels of Globalization that our world has gone through. During Globalization 1.0 (1492-1800) countries had to think globally in order to survive, during Globalization 2.0 (1800-2000) companies had to think globally in order to survive and now in the present Globalization 3.0 individuals have to think globally in order to survive. Friedman believes that we as individuals can thrive or at least survive in this world but “as an individual, will have to work a little harder and run a little faster to keep out of standard of living rising” (278). Friedman also coins a new definition for the term “untouchables”. “In India, untouchables are the lowest social class, but in a flat world everyone should want to be an untouchable. ‘Untouchables,’ in my lexicon, are people whose jobs cannot be outsourced, digitized, or automated” (280). These are the roles that people in the work force want because it gives their career a sense of stability that others may not have. Friedman also addresses what he explains as “fungible” work. Which is work that can be outsourced, transferred abroad, digitized or automated; these are the jobs that individuals in our country want to stay away from at this time. The jobs that Friedman says are the untouchable jobs; the jobs that are stable in a global economy are “specialized” jobs; which consist of unique skills, “localized” jobs; must be done in a certain place, and “really adaptable”; the people who train or learn to move up.

Friedman also explains what he dubs as “the new middlers”; jobs that are less vulnerable to outsourcing or technological changes. Friedman has nine different types of “new middlers” that he explains as the jobs that will be in demand, in a flat world. The nine different types are; great collaborators and orchestrators, great synthesizers, great explainers, great leveragers, great adaptors, green people, passionate personalizers, math lovers, and great localizers. He explains what he mean by each type, and tells us that these are what “Help Wanted” ads look like in a flat world.

For the most part I agree with Friedman’s take on the flattening of the world. I like the way he took an approach that warns us of whats happening (the outsourcing of jobs) however he makes sure to note that we need not worry as much as some think. He does a good job explaining what we as individuals need to do in order to succeed in our coming economy. Friedman does a good job enlightening us with aspects we may not have been knowledgeable of before reading this book. I think it was very good that he made a point to focus and telling us that we in America need to start focusing on jobs that cannot be outsourced; focusing on idea based jobs. I also liked that he said that although many “number crunching” jobs are being done over seas now, it does not mean all aspects of those careers will be moved abroad. It was good to hear that we still need to very much worry about jobs that are concerned with interacting with people, jobs in which you need to be personable. People on the other side of the world may be able to do a client’s taxes, but there still needs to be someone present to meet with them, and form a relationship with these people. Overall it was nice to read this book because it opened my eyes in different ways. People usually hear about jobs that are being outsourced, and jobs being taken away from hard working Americans, and not so much about how jobs are being created everyday in small numbers, by smaller sized companies.


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