Surprise, Tom Friedman, the World Is Wrinkled!

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In “Green the Bailout,” (New York Times, September 28, 2008, WK 11) Thomas Friedman argues that, confronting the crisis on Wall Street, “we don’t just need a bailout. We need a buildup. We need to get back to making stuff, based on real engineering not just financial engineering.” Citing an Indian-American immigrant friend, he argues that we have lost our focus on new opportunities to lead. If the economy were a car, we have focused on fixing financial institutions—the transmission—while neglecting the engine, that is, “real production of goods that create absolute value and jobs.”

Specifically, Friedman calls for the next president to launch an energy technology revolution “with the same urgency as this bailout.” An investment in green energy equivalent to the $700 billion bailout would span the whole economy, “from green-collar construction jobs to high-tech solar panel designing jobs.” A green economy would rely less on foreign borrowing and more on effective use of our people as our chief resource. Any profits from the bailout ought to be invested in infrastructure for a green revolution.

All this is especially refreshing coming from the leading evangelist of globalization. In The Lexus and the Olive Tree The World Is Flat (2000) and (2005), Friedman argued eloquently that with the free movement of information and capital, the particular location of industries was irrelevant, that everyone worldwide would benefit from the allocation of resources wherever goods and services could most efficiently be produced. The fact that steel or textile workers in the United States might lose their jobs to counterparts in China was essentially irrelevant to the big picture. The only serious response to globalization, he said, was to make sure our labor force is as educated and adaptable as possible.

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Thomas Friedman

Friedman is not totally abandoning this position that he took a few years ago: he’s still for education and adaptability, rather than clinging to old industries. But what is new is a recognition that we cannot prosper as a society simply by financing—and profiting from—production that happens elsewhere. If we want to continue to lead, rather than merely survive in this new world, he now admits that we must be producers, not just financiers. In short, the world is not as flat as he thought: it’s wrinkled. To put it in the terms of his latest book (2008), the world is increasingly Hot, Flat, and Crowded.

He’s saying, now, that for this country to prosper in a globalized world that is increasingly overpopulated and environmentally challenged, we shall have to take the lead in providing goods and services for the rest of the world as it confronts these nested problems. It’s a long way from The Lexus; at least he now sees the value of producing our own Prius, or going the Prius one better.

The policy perspective that underlay The Lexus and the Olive Tree held that it simply didn’t matter if our basic industries closed down domestic plants and produced their goods abroad. Tax incentives promoted such moves on the ground that it would be cheaper to purchase such goods produced in China or El Salvador. The result was massive deindustrialization, and the decimation of the American industrial working class. Today, as Bill Clinton (himself a major proponent of free trade) pointed out, we borrow money from China to import virtually everything we need, much of it from China and the oil from the Middle East.

john-peeler.gifThe Chinese don’t assume that the globalized economy will automatically serve their interests; they act to shape it in their interests. So should we.

It is probably too late to resuscitate our steel, textiles, and other basic industries, but Friedman has belatedly shown us how vital it is to systematically promote the emergence of new basic industries, especially those related to green energy.

John Peeler

John Peeler is a retired professor of political science at Bucknell University, specializing in Latin American and international affairs. His op-ed essays have appeared in The Christian Science Monitor and USA Today, as well as many in local papers here in central Pennsylvania where he lives. He has had letters published in both the New York Times and the Washington Post.

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Published by the LA Progressive on September 30, 2008
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About John Peeler

John Peeler is a retired professor of political science at Bucknell University, specializing in Latin American and international affairs. His op-ed essays have appeared in The Christian Science Monitor and USA Today, as well as many in local papers in central Pennsylvania where he lives. He has had letters published in both the New York Times and the Washington Post.