[OPE-L] Zippie World! [?]

From: glevy@PRATT.EDU
Date: Tue May 31 2005 - 07:18:30 EDT

Zippie World!


[from the June 13, 2005 issue]

In the middle of Thomas Friedman's The World Is Flat is a long quote that
towers over the intellectual landscape of the rest of the book like a
mountain over low hills. It is Marx and Engels's celebrated prophecy of
globalization in The Communist Manifesto--"All that is solid melts into
air." Friedman has apparently just discovered it and is "in awe at how
incisively Marx detailed the forces that were flattening the world
during the rise of the Industrial Revolution, and how much he
foreshadowed the way these same forces would keep flattening the world
right up to the present."

Friedman is right to be impressed, however belatedly. After the long
detour of Second and Third World pseudosocialism, capitalism has
resumed the path Marx and Engels foresaw: toward one wholly
rationalized, seamlessly integrated world; with everything for sale;
with no one and no activity exempt from the pressure of competition,
the risk of obsolescence, the specter of ruin; with no rest, no
external haven, no inner sanctuary. A flat world.

This second great age of globalization began, by Friedman's
reckoning, on "11/9." (The Berlin wall came down on November 9,
1989.) "In the Cold War era," he explained in his bestselling The
Lexus and the Olive Tree (1999), "capital could not move across
borders the way it can in today's globalization system." Many
national governments did not permit foreign ownership of core
industries, foreign speculation in their currencies or unrestricted
foreign access to their domestic markets. (Since the United States was
the world's dominant economy, for "foreign" read "American.")
They could get away with this because in the pseudosocialist bloc
people were not free and in any case did not know what they were
missing out on, while in the Free World, the United States was wary of
alienating its geopolitical allies. Friedman's account of "the
Cold War system" in The Lexus and the Olive Tree is accurate and
illuminating, as far as it goes. There is no damned nonsense (or very
little) here about "freedom"--except for the freedom of those with a
lot of capital to do anything they please with it. That is indeed
what the cold war was about.

The end of the cold war made it politically feasible, and
computerization made it technically feasible, to move capital around the
world at dazzling speeds and staggering volumes without
interference from any but the most determined governments. This
allows large investors to buy control of a country's key resources,
industries and infrastructure, to put intense upward or downward
pressure on its currency and thereby to influence, or even dictate, its
fiscal, environmental, labor and tax policies. These new masters of the
universe, gathered around computer screens in New York,
London, Frankfurt and Tokyo, are members of what Friedman calls, in one
of the most memorable of his many piquant coinages, the "Electronic

What lures the Herd to graze in an economy is a favorable investment
climate; or, to mix that metaphor with another charming Friedmanism, the
"Golden Straitjacket." Donning the Straitjacket means low
social-welfare expenditures; low or no tariffs or subsidies to
protect domestic industries; no barriers to foreign ownership,
currency speculation or profit repatriation; and a flexible labor
market--i.e., no unions. (If you want to know more precisely what a
"favorable investment climate" looks like, study the decrees of the
Coalition Provisional Authority, which were designed--without
consulting any nonrich Iraqis--to fit post-Saddam Iraq for the
Straitjacket.) All this is bitter medicine, but salutary:

Governments...that deviate too far from the core rules will see their
investors stampede away, interest rates rise, and stock market
valuations fall. The only way to get more room to maneuver in the
Golden Straitjacket is by enlarging it, and the only way to enlarge it
is by keeping it on tight.... The tighter you wear it, the more gold it
produces and the more padding you can then put into it for your society.

Such is the canonical view of globalization. Friedman is
exceptionally, exuberantly in our face about it, insisting that its
harsh discipline is not merely a necessary evil but also fair,
economically rewarding and in fact democracy-enhancing. You can rail
at the stampeding Herd for leaving your country's social safety net in
tatters, your unemployment rate several points higher and many
people's life savings diminished as the currency plummets. It's no one's
fault, though, but yours and your spendthrift government's.
"There's no one in charge!" Friedman admonishes. Capital-attraction and
capital-repulsion are, in his world-view, neutral processes, like laws
of nature.

And playing by the "core rules" will not only make your society
richer; it will also make you freer. (Friedman's boosterish,
lapel-grabbing use of the second-person pronoun is contagious, I'm
afraid.) "The democratizations of technology, finance, and
information," he enthuses, "are at the heart of the globalization
system." You can't keep your population down on the farm, politically
speaking, once they've plugged into the Net. Moreover, corruption,
nepotism, bureaucratic incompetence and arbitrary power (unless it's
awfully secure--more secure than despots tend to be these days) are bad
for business; the rule of law, a professional civil service,
accurate and accessible statistics and a stable, legitimate
government are good for business. If your society wants to prosper, it
will shape up. This "revolution from beyond" Friedman calls

The World Is Flat is an updated report from the field. Whatever one
thinks of Friedman as an analyst (and I'd say there's only one
possible opinion of him as a prose stylist), he's an energetic
reporter and a good storyteller. His new book teems with interesting
anecdotes about innovative companies, technologies and business
processes. Everyone's heard by now of the book's opening gambit: his
wide-eyed tour of the call centers of Bangalore, India, where
adolescents re-christened "Derek" and "Daisy" practice saying "Thirty
little turtles in a bottle of bottled water" in order to communicate
with Americans frantic about lost luggage or frozen computers.
There's also a brief history of open-sourcing: of how Linux and
Apache grew, on virtually pure anarchist principles, to become the
backbone of the Internet. In counterpoint, one learns how Wal-Mart (of
whose principles there's no need to speak) conquered the world by becoming
"the best supply chain operator of all time," in the words of
an awed business consultant.

Supply-chaining is one of the world-flattening forces that are
kicking globalization up to another level. Outsourcing, offshoring,
work-flow software, digitization--every new organizational and
technological development tends to divide, isolate, simplify and
cheapen the production process. An old friend of Friedman's used to be
an illustrator. Now, thanks to design programs like Quark and
Photoshop, he's JAFA (Just Another Fucking Artist). His skills have become
"vanilla"--Friedmanese for expendable, a mere commodity--so he has
"transformed himself into an ideas consultant," supplying drawing concepts
that are outsourced for production. This is the fate of a good half the
characters who crowd Friedman's book. While
unassumingly making a living, they are overtaken by labor-saving
technology and turned into inexpensive vanilla ice cream.
Fortunately, they somehow manage to reinvent themselves as a pricier
"chocolate sauce" or "the cherries on top," and the GDP
continues its steady ascent.

The book's other characters include dynamic executives who are
sponsoring all this outsourcing, offshoring and vanilla-ization. The
go-go chairman of Rolls-Royce (which naturally doesn't make cars
anymore--too vanilla) spouts this choice bit of New Economy-speak, which
greatly impresses Friedman: "We own the ability to identify and define
what product is required by our customers, we own the ability to
integrate the latest science into making these products, we own the route
to the market for these products, and we own the ability to collect and
understand the data generated by those customers using our products,
enabling us to support that product while in service and constantly add
value." Can you guess from that babble what Rolls-Royce does make now?

Perhaps most impressive and intimidating are the "zippies," the alpha
fauna of Friedman's brave new flat world. Zippies are "the huge
cohort of Indian youth who are the first to come of age since India
shifted away from socialism and dived headfirst into global trade and
the information revolution by turning itself into the world's service
center." An Indian magazine calls them "Liberalization's Children," and
they rule: "young city or suburban resident, between 15 and 25 years of
age, with a zip in the stride. Belongs to Generation Z. Can be male or
female, studying or working. Oozes attitude, ambition, and aspiration.
Cool, confident, and creative. Seeks challenges, loves risks, and shuns
fear.... destination driven, not destiny driven,
outward looking, not inward, upwardly mobile, not
stuck-in-my-station-in-life." An even bigger cohort of Chinese
zippies, Friedman warns, are only a few years behind them, and
together they are going to blow their lazy, spoiled American
contemporaries away.

It's tempting to smirk at this ad-copy prose and at the rest of
Friedman's hymn to the Grand Global March of Productivity. There are
serious empirical and analytical questions about it all, too. As Doug
Henwood in After the New Economy and Eamonn Fingleton in
Unsustainable have shown, prophecies of permanent, digitally driven
prosperity look pretty dubious. Real pay for most US workers, Henwood
notes, is lower than in 1973; and as Fingleton points out, "with
almost no exceptions, manufacturing-oriented economies...outpaced the
United States in income growth in the 1980s and '90s." And that
income growth was more evenly distributed than in the United States.
It's highly plausible that the growth of the information economy has
contributed to America's notable income inequality. The skill
premiums, obstacles to unionizing and even greater ease with which
nonmanufacturing jobs can be outsourced all tend to exacerbate income
disparities. In fact, virtually the only industry in which
information technology has made an unquestioned and substantial
contribution to productivity is financial services. And that, from
society's point of view, may well be no more beneficial than gains in the
gaming industry would be--of which, arguably, the capital markets deserve
to be considered a part.

Bringing the blessings of capital markets to the rest of the world was one
of the chief benefits of globalization in the 1990s, Friedman proclaimed
in Lexus. In one of that book's most obnoxious passages, he announced, "I
believe globalization did us all a favor by melting down the economies of
Thailand, Korea, Malaysia, Indonesia, Mexico, Russia, and Brazil in the
1990s, because it laid bare a lot of rotten practices and institutions in
countries that had prematurely
globalized." Apart from its callousness, this and other comments by
Friedman on the Asian financial crisis of 1997-98 made clear that he had
misunderstood its lessons: that someone is in charge of the
Electronic Herd and the capital markets; that it's the IMF (which
takes its orders from the US Treasury); and that following the IMF's
prescriptions left countries more, not less, vulnerable to being

Still, Friedman is far from heartless. There's a frank recognition of the
pain of globalization in Lexus, and even in the surprising
statement that "you dare not be a globalizer today without being a social
democrat." In The World Is Flat he writes, "The social
contract that progressives should try to enforce between government and
workers, and companies and workers, is one in which government and
companies say, 'We cannot guarantee you any lifetime employment. But we
can guarantee you that government and companies will focus on giving you
the tools to make you more lifetime employable.'" In a
flat world, "the individual worker is going to become more and more
responsible for managing his or her own career, risks, and economic
security, and the job of government and business is to help workers build
the necessary muscles to do that."

Friedman offers three simple, sensible muscle-building proposals:
portable-pension legislation, portable health insurance (with plans
negotiated by government, not individual employers) and two years of
government-subsidized tertiary education for everyone. (If he were a bit
braver, he might have emphasized that all this and much more like it could
have been accomplished for a fraction of the amount wasted on the richest
1 percent by the Bush tax cuts.) He even has a
suggestion for the antiglobalization left, whose idealism he
professes to admire: Form NGOs in Africa, India and China that will
"promote accountability, transparency, education, and property
rights" and help "ensure that the poor get the infrastructure and
budgets to which they are entitled." After all, the poor, too, yearn to
join the flat world: "The wretched of the earth want to go to
Disneyland, not to the barricades."

I wouldn't presume to badmouth Disneyland to the poor. But one may well
feel a bit uneasy about the quality of life in the flat world. When
informed excitedly by a mid-nineteenth-century Thomas Friedman that Maine
and Texas could now communicate by telegraph, Thoreau
remarked, "But Maine and Texas, it may be, have nothing to
communicate." History does not record Friedman-then's reply, but
Friedman-now would have absolutely no idea what Thoreau was talking about.
That information technology might have the effect of making life, at least
in some respects, less gracious, subtle, sensuous and profound, but
instead more sterile, frenetic, shallow and
routine--there is no inkling of this in The World Is Flat.

"If you are just a little too slow or too costly--in a world where the
walls around your business have been removed and competition can now come
from anywhere--you will be left as roadkill before you know what hit you."
It sounds like the war of all against
all--"turbocharged," to use one of Friedman's favorite
adjectives--and the ultimate weapon, the focus of creativity, the
highest achievement of this new stage of civilization is
apparently...ever-newer operations-flow software, to optimize your
business process. Except for those Third World NGOs, no one in the flat
world seems to be doing anything of loftier significance than getting
Wal-Mart's suppliers to make deliveries just a few minutes nearer to ship
time or inventing a new radio-frequency identification microchip to track
its inventory.

Well, it will be the zippies' world, not mine. I'm sure they will be fully
as cool, confident and creative, as ambitious, aspiring and
attitudinal, as Friedman promises. I only hope they'll have enough
imagination to be bored.

This archive was generated by hypermail 2.1.5 : Thu Jun 02 2005 - 00:00:02 EDT