The World is Round — Again!

Thomas Friedman is a journalist/author who is not really an exceptional journalist or an exceptional author. He has won a few Pulitzer prizes, but he is not popular because of them. His claim to fame is a rather elementary named book, titled, ‘The World is Flat’. Published in 2005, it is world-is-flatquite a simple book talking about the state of affairs of the world, especially in connection with globalization. The book speaks of how the world is coming together as one big place from Denver to Dalian to Bangalore. It was meant to be a chronicle of our times, and a sort of prognosis of the things that are yet to come. Friedman reaped rich rewards from his book, traveling across the globe, giving talks and discussing the subject.

When the book came out, there was much fanfare around it. The book seemed to propose a hypothesis, no less significant, than say E=MC²  or better still, like the discovery of New World by Msieu. Columbus.

The book spoke about a new globalized inter-connected world where information, people, money and even ideas moved across at breathtaking speed. It was a world where, kids in the US had to be wary of growing up in a world, where kids in India or China could easily replace them. The world was being progressively flattened, and there was little to do to prevent the eventuality.

It has been a decade since Friedman came up with book and much water has flown in the Mississippi River or the Yangtze or even the Ganges since then to erode the beautiful facade of ‘flatness’. I recall listening to all a talk by Friedman, which he gave in Mumbai at NASSCOM summit. In it, he spoke about how times had changed from the past, when American kids would leave food on the plate and their parents would chide them, “spare a thought for the hungry millions in India”. And now, when the kids are disinclined to study, the current parents warn their kids, “be scared of the learning millions in India”. Honestly, my heart swelled with happiness at the prospect of living in a world where nationality did not dictate your destiny. We could be anyone, we wanted, so long as we wanted it hard enough. The future indeed seemed rosy and bright, during such times.

Cut to today, and I chanced upon the latest vitriol by Republican presidential nominee (and possibly — god forbid, would-be American President) Donald Trump, wherein he blamed India, China shutterstock_299401883and Mexico for the “greatest jobs theft” in the history of the world. According to him, Indians and other nationals were gobbling up American jobs. Indians were no more a threat, but rather scheming thieves that stole and cheated. Now how could that narrative change so quickly? What happened to that ‘flat world’ that was meant to be equal for all?

From Friedman’s future threat, to Trump’s thieving schemers, much seemed to have changed in the intervening years. Now how could that narrative change so quickly? What happened to that ‘flat world’ that was meant to be equal for all?

Well, apparently, in the past few years, there has been a geographical shift wrought on by economical exigencies. The narrative seemed to have much changed in these years. Suffice to say, the world has been ’rounded’ again. From Europe to the USA, from Australia to Brazil, there is a wave of anti-globalisation that is sweeping over and gaining strength. People across the globe are (except for China and a few other countries) are clamoring for control and centralisation. It’s like a game of domino, wherein one country seems to be following each other by falling in the cesspool of protectionism. All those fancy ideas of a free market economics and free trade seem like just fancy jargons. It is almost as if, there is an up rise of nationalism that is battling globalization. People are fighting for their countries; people are fighting to keep the world round.

Take the recent report released by WTO that hinted that protectionism among countries was on the rise. According to it, between mid-October of last year and mid-May of 2016 G20 economies had introduced new protectionist trade measures at the fastest pace seen since the 2008 financial crisis, rolling out the equivalent of five each week.

The best example of this upsurge was in view in June 2016, when 52% of Britons voted to shutterstock_105421493leave the EU, in spite of all the rational and logical arguments against it. Brexit, as the exit was called, was a fed by an economic anger pandered by nationalistic demagogues. In the wake of this, everything else was washed away.

But then Brexit was no exception, in countries like Germany, France, Spain, Greece, Brazil, South Africa, such kind of economic parochialism is on the upswing. In Dubai, they are driving away expats, Australia is tightening the laws against immigration, there’s a massive 280-mile fence under works in Hungary. Back home in India, a yoga-baba has become a billionaire business magnate by promoting his brand of goods in contrast to “profiteering MNCs” who take the money out of the nation. In fact, he is even set to launch a desi denim label that will take on the Lee, Levis and Pepes of the world.

So what is the reason why the world that was stridently embracing globalisation, has suddenly developed an allergy to it?

Simple. It’s all about money, honey! Ever since 2008, when the subprime crisis surfaced in the US, the economy never really recovered from that. With the subsequent turmoil in European economies, the problem only compounded. Typically, when the going is good, it is easy to be generous, but when the going gets tough, stinginess is common. Protectionism is akin to economic stinginess.

The crisis has really compounded further due to the various geo-political situations across the globe, the ongoing crisis in the Middle East, the terror attacks in Europe, the political instability in Brazil and Venezuela. With the world economic engine slowing down, crude shutterstock_359061446oil prices have crashed, due to which the shinning economies like Russia and Saudi Arabia are now floundering to manage their own expenses. With the war raging on in Syria and Iraq, the millions of refugees knocking on Europe’s door have only attributed to the turmoil. Over the past year, we have witnessed many countries hardening their stand on immigration, where most of the political parties that are gaining power are Right-wing ones.

In fact, things have gone so much out of hand economically that even the dragon is now feeling the heat. So, recently, when India hinted at putting trade restrictions on Chinese goods, the China government virtually threatened India with dire consequences.

With the economic situation and political staility in a tizzy, protectionist political chorus has grown stronger. Fortunately for us Indians, our economy is the only one that seems to be beating the blues. The markets are growing, the industries are growing, there is political stability, and fiscal deficit is in control. India now is an economic beacon for the world. Sadly, just when India was set to profit from the flat world, it ceased being flat anymore.

So, is a flat world better than a round one or vice-a-versa?

Well, it largely depends from which end of the table you are looking from. If you are a national suffering from rising inflation, and vanishing jobs, protectionism is the best thing. But if your bread comes from selling butter to others, trade barriers can create much heart-burn.

Revisiting history, the last time when such protectionist measures increased to alarming proportions was during the Great Depression in the 30s. While analysts continue to debate on the chicken-egg of protectionism and depression, shutterstock_252139165namely, was the depression a result of protectionism or vice-a-versa. But what is well known is that in the 30s, global output fell, unemployment rose, prices declined, and forcing government to put curbs on imports. The whole scenario finally culminated into a grand World War, where millions died. Strangely, a round world does not stay round for much long, as some force or the other tries to flatten it.

Sadly, there’s little we seemed to have learned from history. With the economic and political scenario as it is, there is little hope that the world will flat once again, at least in the near future. Guess, Friedman can get a second shot at ‘Tom Tomming about flatness’ in the next few years. Till then, let’s get accustomed to the roundness and learn to live with it.

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