Globalization is a complex phenomenon, which New York Times columnist Thomas Friedman has famously explained with the metaphor of a “flat world.” In fact globalization, is complex and subtle web of ideas, political, economic, and social change that has gone on even before Alexander ‘The Great’, invaded what much later, became British India.

Nevertheless according to some, popular accounts, globalization was invented, more or less, by two brothers named Richard and Maurice when they opened a tiny drive through restaurant in Pasadena, California, in 1937 and named it after themselves. Their first store wasn’t specialized in hamburgers although they existed and were on the menu -hot dogs and milkshakes were its specialties.

But drive-in restaurants like McDonald’s were caught in a profit pinch, selling low-priced food using traditional methods, which were labor-intensive and expensive. The brothers’ contribution to globalization was their decision to rationalize the food production process. They stripped down their twenty-five item menu to its core - hamburgers accounted for 80 percent of their sales - even though this meant dismantling their authentic hickory-fired pit barbeque. McDonald’s reopened with a product that was cheap and standardized, and today McDonald’s are indeed all over the world.

According to the Italian culinary magazine Gambero Rosso however, there are about twice as many reasonably authentic Italian restaurants outside of Italy as there are McDonald’s restaurants in all the world, including the United States.

In fact Benjamin R. Barber invented McWorld in a 1992 Atlantic Monthly article titled ‘‘Jihad vs. McWorld.’’

The article inspired a 1995 book, also called Jihad vs. McWorld, with the subtitle, ‘‘How the World Is Both Falling Apart and Coming Together-And What This Means for Democracy.’’

Barber believed that globalization is a threat to democracy, thus the book’s title should have been Globalization versus Democracy, not Jihad vs. McWorld.  The argument is that globalization twists the world in two ways at once. On one side it bends the world toward markets and business, which tend to organize along certain lines, guided by the ideology of globalism.  At the same time the world is twisting toward McWorld, however, it is also turning toward Jihad. Globalization magnifies ethnic, religious, and racial divisions, producing Jihad. But understood in Barber’s argument, is the reaction to or retreat from globalization and back toward the security of tradition, religion, and tribe or nation.

The problem, Barber says, is that both Jihad and McWorld are essentially undemocratic and perhaps even antidemocratic. As neoliberal policies shrink the state and market forces expand, democracy becomes at best a meaningless ritual and potentially a threat to global competition. If the world disintegrates into Jihad and McWorld, Barber asks, what chance is there for democracy? A distinctly American question, others might ask a different question, such as whether Jihad and McWorld are consistent with peace.

But many people (see Thomas Friedman’s “Flat World”) think that markets might even promote democracy by undermining undemocratic authority. In fact McDonald doesn’t impose, only brings the necessity to choose.  Both Barber and Friedman’s arguments, are based upon American values. There are several reasons to doubt that the world really works this way.

Barber sees the rationalization process (and writes about it in Jihad vs. McWorld), but he is apparently more concerned with who has the power in the system (hence his misplaced concern with the infotainment telesector), not realizing that the power is the system. The power lies in the rationalization process itself.

One cannot but be aware that countries face intensified competition in the world economy – a phenomenon that forced itself on our attention long before China and India began to loom large in fevered imaginations. Interest rates are less far apart than earlier: A continual opening and global integration of financial markets has occurred. Multinationals now consider many alternative locations for final assembly and to manufacture components, so their know-how becomes available, in effect, to several likely locations. And the boom in the Chinese microchip industryto name one, has Americans worrying about lost jobs and national security.

In addition one cannot fail to notice that, a current military contest is under way, for control of the world’s remaining oil, even when two-thirds of that oil is in the possession of people who resent America and Britain.

Yet it is wrong to infer from this that the world has gone “flat,” and that there is no comparative advantage left. The notion of a flat world is as wrong metaphorically now as it was when Copernicus showed it to be literally wrong. To be more precise than his metaphor, Friedman has on his mind not the world but a large fraction of it - India and China.

But he takes too literally his friends in Bangalore.  They flex their muscles on IT the way Popeye does on spinach, and tell him that some Indians can now do anything that the Americans can do. Then again, we have Intel Chairman Craig Barrett talking about 300 million Indians and Chinese professionals who will hurtle down the flat road. And Clyde Prestowitz, in his latest book, carries the argument to its logical conclusion with the American nightmare that there will be three billion Indians and Chinese capitalists soon down that road.

In truth, the flat road is not flat at all. Take the supply of educated manpower in India. Of the numbers in the age cohort for college education, only about 6% make it to college. Of these, only two-thirds graduate, and just a small fraction can read English.  Of these, a further fraction can speak it; and of these, a smaller fraction still can speak it in a way which you and I can understand. The truth of the matter, therefore, is that even for the call-answer and back-office services, the numbers who will compete are only a very small fraction of the numbers being thrown about. India’s huge size and the dazzle of the few Institutes of Technology are totally misleading.  The road is not flat; the gradient becomes steep as wages rise for those who can manage while others cannot qualify.

Again, just think back on why China has not managed to break into IT the way it has on a range of manufactures, while India has. Surely, that has to do with the fact that India is democratic and hence IT can flourish. By contrast, the CP (the Communist Party) is not compatible with the PC: Authoritarian regimes are fearful of IT.

Such fears of a flat road were rampant when many thought in the 1980’s that Japan would be a fearsome Godzilla. But then it turned out that the Japanese were real klutzes in the financial sector. And while the Chinese and Indians have lower wages, Europe and US for example have better infrastructure, stronger venture capital markets, an ability to attract talent from around the world.

Another thing that is cooked into the books is demography, an aging Europe, Japan and America and an explosion of population in Asia. The developed countries have gone from about 33% of world population in 1950 to the 18% range right now. The current developed countries will be 12% of the population in 45 years. The underdeveloped countries are going to grow to roughly 87%. That's a huge demographic shift. The 10 major Islamic countries by 2050 their population will be about the same as the developed countries. Today, Russian has 145 million people and at its current rate it will be 100 million it 2050. Iran and Iraq currently have 87 million people combined. Today they are roughly 60% of the population of Russia, and in 2025 those two countries will have 10 million more people than Russia. Iran alone will have a greater population than Russia in 45 years. How do you think a nuclear power and militaristic power like Russia is going to be able to deal with that change?

Yemen will be bigger than Germany in 45 years. Yemen is a small country, where will they go? We have already witnessed the largest migration of human population in human history. Over 200 million Chinese have moved from the interior and the west to within 90 miles of the coast in the last 20 years. That is almost too large to grasp. It is as if half the population of the middle part of United States decided to move to the coast in the next 20 years. That the population over 60 years old will grow dramatically in the developed world from 2005 to 2040. The US will go from 16% today to 26%; Japan grows from 23% to 44%; Italy from 24% to 46%. Those will affect worker productivity, health care and strain the economy. The percentage of GDP that countries will have to tax if they keep the promises they made to the retirees will be a problem, as there will be less workers to pay. France will be at 64% and Germany will be at 60% of GDP just for social services, without adding other government costs such as education, military, roads, etc.

Last year W Michael Cox and Richard Alm, of the Federal Reserve Bank in Dallas, have examined ten years of employment data and discovered that the largest gains have been in jobs that require "people skills " (for example, registered nurses) and "imagination and creativity" (for example, designers). Frank Levy, of the Massachusetts Institute of Technology, and Richard Murnane, of Harvard University, have published an excellent book, The NewDivision of Labor: How Computers Are Creating the Next Job Market, in which they argue that computers are in the process of obliterating routine work. Russia we already mentioned earlier this year on our webpage is just as disconcerting as there is an increasingly religion-oriented, with the Russian Orthodox Church taking a leading role, next joined by moderates from other large religious traditions in Russia, such as Islam and Buddhism.

In China, any credibility the government gleaned from Marxism, Maoism or Communism has faded, and the Communist Party remains in power only by dint of its ability to deliver economic well-being to the masses. Its chosen delivery mechanisms are state-owned enterprises, government-run companies that directly employ more than half the nation's urban dwellers. These vastly bloated and unprofitable companies are kept "viable" through subsidies and cheap loans, regularly injected by China's state-owned banks. Thus foreign bankers who have been singing China's praises for years, have a vested interest in maintaining the Chinese hype, since they turn profits as money moves into or out of China. But for these bankers, access to China's hundreds of millions of savers is the Holy Grail. A sudden split between Beijing and those who thus far have been singing in the choir would signal not the beginning of the end, but the end itself, for once the choir realizes it has been had, it is only a matter of moments before the entire congregation of investors speeds for the door, for the next few years that is, and most likely will happen once the Olympic Games are over.

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