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Runaway World

I think it was Jules Pfeiffer who did a cartoon back in the middle of the last century—it was probably in the New Yorker magazine—showing a fearful soul huddled into a corner, with the caption, "Stop the world. I want to get off." If my memory serves me correctly (which it often doesn’t), there was also a stage play and movie with the same title. The apprehension I’ve been feeling lately, that things have gotten out of hand, doesn’t seem to be anything new in the world—just new in my own failing confidence that I can deal with all of it.

I suppose that’s not unusual among near-octogenarians like me. As I gradually let go of worldly things (the future appears shorter and shorter, after all), I don’t as often as before perceive change as opportunity. I’m content to leave that to the youngsters—to my children, busy as they are in accumulating money and things while they still can, like ants trudging back to the nest with their crumbs, their share of prosperity, before the winter of their own old age. I’ve hoarded all that I’ll ever be able to, and my task now is to figure out how to make it last as long as I do.

Since World War Two ended a half-century ago, people have been noticing that change is accelerating. It’s one thing when the train just begins to move, when it’s still possible to grab the bar and swing oneself up on the step without risking one’s neck, and it’s quite another when the hero gallops his horse as fast as it can go in an effort to grab the rear end of the train and haul himself up just in time, sweating and panting (but without losing his hat) to catch his prize before she disappears from his life. There’s a point there, somewhere, marking the distinction between heroism and futility. I hope my kids can recognize that point.

"Stop the world, I want to get off" was also the title of a book review by John B. Judis in Slate online magazine back in 1997, discussing William Greider’s book One World, Ready or Not: The Manic Logic of Global Capitalism. Greider wrote about global affairs during the Asian economic crisis and pointed out that globalization was threatening to pull us down along with the less-developed world. To save ourselves, he proposed something in between old-fashioned national protectionism and riding the bronco until the beast realized that we were in charge. He thought that we Americans could save our jobs by reining in the capitalists just a little.

That was before the dot-com bust. That was before offshoring and outsourcing. It was only a couple of years after NAFTA began, and before its effects were known. So much has happened since Greider’s book came out that it seems almost quaint in its naivety. At the time, however, it made a lot of people think.

As Paul Krugman, professor of economics at MIT, wrote, "Greider believes that all of the difficulties and dislocations of the modern world economy can be traced ultimately to a single cause: supply is outstripping demand. As efficiency increases in the advanced nations and new industrial centers emerge in the developing world, demand simply cannot keep up, because of the ‘faltering ability of the world's consumers to keep up with the new production capacities being created’ . . . The result is persistent global excess capacity, producing ever-greater downward pressure on prices and above all wages."

Krugman pointed out that "all of the increased production in the world has as a necessary counterpart increased income—every dollar of sales must also represent a dollar of wages or profits to somebody. And there are only two things you can do with income: save it or spend it. So if we are really suffering from global oversupply, we must be suffering from a global excess of savings compared with investment opportunities. Are we? On the contrary . . . "

Good minds are always trying to interpret our situation, to look for the keys to hanging on and making the most of it. Now comes Thomas Friedman, world affairs columnist for the New York Times. His new book is The World is Flat: A Brief History of the Twenty-First Century. Friedman doesn’t blame our current plight on the capitalists, or on a surplus of supply over demand—or even on globalization. He says that we’re in a new ballgame, one in which we aren’t necessarily the stars anymore. The rules have changed, and the sooner we accept that fact and learn how to play according to the new rules, the more likely we are to succeed. The train is moving faster. We’d better grab the bar while we still can.

At about the same time that Greider was coming out with his book, some new developments, largely unnoticed, were shaping the future. For instance: the global economy was pressuring technology to improve world communication. The Internet was there, and communication satellites, to be sure. Because they weren’t yet secure enough nor reliable enough, businesses needed hardware, and it arrived in the form of fiber optics—cable that could carry thousands of times more data thousands of times faster than copper wire. The dot-com bubble was expanding, and everyone wanted to be a part of it.

Well, we know what happened: the bubble burst. What went unnoticed, however, was that an awful lot of fiber optic cable was already underground and under the sea. Quite suddenly, world-wide communication could be had for next to nothing. Remember before AT&T was broken up, when a long-distance telephone call cost you about as much as a six-pack of beer—per minute?

At about that time, businesses all over the world were in a panic about the "Y2K problem," the common inability of then-current data processing software to recognize the turn of the century. When much of it was developed a generation before, there was little need to calculate a date that didn’t begin with "19." If one tried to calculate a date ahead into the next century—say, 2005—the software assumed one was talking about 1905. Bad computer. Frantic was the word to describe the effort to fix the Y2K bug, and there were just not enough programmers to do the job. Not in North America or Europe, at least. Fortunately, some "developing countries" such as China and especially India were at that moment churning out computer programmers faster than they could absorb them into their own economies.

As I think it was Homer Simpson who said it, "Well, duh!" As the recession started and Western businesses began tightening their belts, it didn’t take long for them to notice that they could not only hire Indian technical graduates for less money than they had been paying Americans, they could hand a lot of their routine data processing work to new companies right in that country, companies who gladly offered their services over the new low-cost communications lines. If you get a traffic ticket in Manhattan, for example, it’s duly noted in the city’s database processed in—you guessed it—India. Service call centers in Bangalore, India, now routinely answer Hewlett-Packard’s and Microsoft’s tech support numbers. Perhaps you’ve noticed.

Thomas Friedman talked with a lot of people around the world. One of the things he found was that the CEOs of major companies were well aware of this development, and that their success depended upon making the best use of it. The train is speeding up, and those who want to ride had better step smartly.

What’s all this have to do with "the world is flat?" He says that this new technology and the changes in the way people run their businesses is leveling the playing field to a huge number of new players. A small entrepreneur in Canton, Ohio—or one in Canton, China—can offer services to large corporations in competition with big data processing companies like EDS, which gave Ross Perot his millions. At a time when American airline companies are fighting off bankruptcy, David Neeleman started a new one named JetBlue, and outsourced his entire reservation system to stay-at-home moms and retirees living around Salt Lake City, Utah, who booked passengers on their home computers. "The world is flat" refers to the ease with which enterprising people almost anywhere in the world can be players in the global economy.

Those whose imagination is limited to how it was twenty years ago may be relegated to fighting over the diminishing scraps of the old economy. Senator Kerry raised the cry during the last presidential campaign against losing American jobs to outsourcing but, according to Friedman, Kerry was missing the real point—along with an opportunity to truly lead, instead of dragging his heels, as well as ours. There is no turning back, short of a total melt-down of the global economy.

It’s too late to stop the world in order for us collectively to get off. The train is moving too fast, and even Hopalong Cassidy couldn’t coax his snowy white horse Topper to catch up.

Guess I’ll sit here on my front porch, lean my chair back against the wall, whittle a bit, and watch it go by. Care for a chew?

 

December 9, 2005

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