The final word when it comes to Globalization
Friedman provides an excellent summary of recent changes that have created today's intense global economy. However, his conclusion that this is good for the U.S. - based on anecdotal evidence supplied by outsourcing supporters - is dead wrong.
Broader data show massive deterioration in U.S. workers' healthcare and pension coverage, and opportunities to use and develop higher-level skills (eg. software, engineering, production management, technical skills). The most recent data even show a decline in inflation-adjusted incomes. (Not only are the areas outsourced directly impacted, but so are career areas that displaced individuals move into.) Meanwhile, the areas being outsourced continues to grow to now include tutors, and drug trials.
Friedman observes that Asian competitors are quick learners, moving up the "food chain" from simple production managed by Americans to designing new sophisticated equipment and parts and then manufacturing them under local management. What he fails to note is that sooner or later they will also take over total control and financing - leaving only U.S. distribution to Americans. Thus, most of those that now support outsourcing will eventually find themselves also outsourced. (Median salary and cash bonuses for U.S. CEOs in office for at least a year was $2.3 million in '03, vs. $88,117 in India, according to the Wall Street Journal, 7/19/05)
Friedman does have a recommendation for America in the "flattened world" - substantially improve education and pupil achievement. Unfortunately, even if accomplished (30+ years of reform efforts have yet to come close), it would be of little help. Experts have concluded that Oriental IQs generally average 10 points higher than those of Americans. China and India graduate a combined 500,000 scientists and engineers a year, vs. 60,000 in the U.S., according to Business Week (8/22/05). China alone has about four times the U.S. population, and then there's India, Pakistan, South America, etc. - earning as little as 5% of what Americans bring in. Meanwhile, the number of U.S. computer science students is DECLINING - as a result of unemployment caused by outsourcing. In addition, the inflation-adjusted income for B.A. degrees has fallen 4.9% from '00-'04, while high-school graduates only fell 0.2% (BW, 9/12/05)
In addition, American corporations are hobbled by having to pay high healthcare costs, vs. other nations' much lower costs - largely born by government. And finally there are the government restrictions on genetic research that American firms are forced to live with - possibly precluding significant participation in a potentially booming new area.
If the preceding examples do not set off alarm bells, there's always the latest news that the brightest Indian immigrants in the U.S. are now starting to return to India. At the same time, the volume of those coming here is declining - reportedly because of "better opportunities" in India. Meanwhile, improved technology and reliability acerbate the job problem by further reducing opportunities.
Clearly the mathematics are against us and the inevitable result is that our standard of living is headed for a substantial fall - unless some other solution is found. Rome, Spain, and England proved that a nation's strength is not permanent. Friedman summarized the factors eroding America's - unfortunately, he failed to look clearly into the future or to find a solution. And those should be America's main concernsRead full review
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