Thế giới phẳng (the world is flat)

Trade Liberalization
Firstly, how is the world flat?
Globalization
1. “The first lasted from 1492-when Columbus set sail, opening trade between the Old World and
the New World-until around 1800… It shrank the world from a size large to a size medium.
Globalization 1.0 was about countries and muscles. That is, in Globalization 1.0 the key agent of
change, the dynamic force driving the process of global integration was how much brawn-how
much muscle, how much horsepower, wind power, or, later, steam power-your country had and
how creatively you could deploy it.”
2. “The second great era, Globalization 2.0, lasted roughly from 1800 to 2000, interrupted by the
Great Depression and World Wars I and II. This era shrank the world from a size medium to a size
small. In Globalization 2.0, the key agent of change, the dynamic force driving global integration,
was multinational companies. These multinationals went global for markets and labor,
spearheaded first by the expansion of the Dutch and English joint-stock companies and the
Industrial Revolution.”
3. “Globalization 3.0 is shrinking the world from a size small to a size tiny and flattening the playing
field at the same time… And while the dynamic force in Globalization 1.0 was countries
globalizing and the dynamic force in Globalization 2.0 was companies globalizing, the dynamic
force in Globalization 3.0-the thing that gives it its unique character-is the newfound power for
individuals to collaborate and compete globally. Globalization 3.0 not only differs from the
previous eras in how it is shrinking and flattening the world and in how it is empowering
individuals. It is different in that Globalization 1.0 and 2.0 were driven primarily by European and
American individuals and businesses. Even though China actually had the biggest economy in the
world in the eighteenth century.”
Pros and cons:
1. And with whom does the traditional Right stand in this story? With those who want to hold
down taxes and shrink the state budget of Indiana by outsourcing some work, or with those who
say, "Let's raise taxes more in order to reserve the work here and reserve it just for people from
Indiana"? With those who want to keep some friction in the system, even though that goes
against every Republican instinct on free trade, just to help people from Indiana? If you are
against globalization because you think it harms people in developing countries, whose side are

you on in this story: India's or Indiana's? The India versus Indiana dispute highlights the
difficulties in drawing lines between the interests of two communities that never before
imagined they were connected, much less collaborators. But suddenly they each woke up and
discovered that in a flat world, where work increasingly becomes a horizontal collaboration, they
were not only connected and collaborating but badly in need of a social contract to govern their
relations.
2. Meanwhile, the business wing of the Republican Party, which believes in free trade,
deregulation, more integration, and lower taxes-everything that would flatten the world even
more-may end up aligning itself with the social liberals of the Democratic Party, many of whom
are East Coast or West Coast global service industry workers. They might also be joined by
Hollywood and other entertainment workers. All of them are huge beneficiaries of the flat world.


3.

4.

5.

6.

7.

They might be called the Web Party, whose main platform would be to promote more global
integration. Many residents of Manhattan and Palo Alto have more interests in common with the
people of Shanghai and Bangalore than they do 222 with the residents of Youngstown or Topeka.
In short, in a flat world, we are likely to see many social liberals, white-collar global service
industry workers, and Wall Street types driven together, and many social conservatives, whitecollar local service industry workers, and labor unions driven together.
Who developed the free-trade theory of comparative advantage, which stipulates that if each
nation specializes in the production of goods in which it has a comparative cost advantage and

then trades with other nations for the goods in which they specialize, there will be an overall
gain in trade, and overall income levels should rise in each trading country. So if all these Indian
techies were doing what was their comparative advantage and then turning around and using
their income to buy all the products from America that are our comparative advantage-from
Corning Glass to Microsoft Windows-both our countries would benefit, even if some individual
Indians or Americans might have to shift jobs in the transition. And one can see evidence of this
mutual benefit in the sharp increase in exports and imports between the United States and India
in recent years.
More American individuals will be better off if we don't erect barriers to outsourcing, supplychaining, and offshoring than if we do. The simple message of this chapter is that even as the
world gets flat, America as a whole will benefit more by sticking to the basic principles of free
trade, as it always has, than by trying to erect walls.
But it is happening. If it were not, America's unemployment rate would be much higher today
than 5 percent. The reason it is happening is that as lower-end service and manufacturing jobs
move out of Europe, America, and Japan to India, China, and the former Soviet Empire, the
global pie not only grows larger-because more people have more income to spend-it also grows
more complex, as more new jobs, and new specialties, are created.
Let me illustrate this with a simple example. Imagine that there are only two countries in the
world-America and China. And imagine that the American economy has only 100 people. Of
those 100 people, 80 are well-educated knowledge workers and 20 are less-educated low-skilled
workers. Now imagine that the world goes flat and America enters into a free-trade agreement
with China, which has 1,000 people but is a less developed country. So today China too has only
80 well-educated knowledge workers out of that 1,000, and it has 920 low-skilled workers.
Before America entered into its free-trade agreement with China, there were only 80 knowledge
workers in its world. Now there are 160 in our two-country world. The American knowledge
workers feel like they have more competition, and they do. But if you look at the prize they are
going after, it is now a much expanded and more complex market. It went from a market of 100
people to a market of 1,100 people, with many more needs and wants. So it should be win-win
for both the American and Chinese knowledge workers…Their wages are certain to be
depressed. In order to maintain or improve their living standards, they will have to move
vertically, not horizontally. They will have to upgrade their education and upgrade their

knowledge skills so that they can occupy one of the new jobs sure to be created in the much
expanded United States-China market.
That is why America, as a whole, will do fine in a flat world with free trade-provided it continues
to churn out knowledge workers who are able to produce idea-based goods that can be sold
globally and who are able to fill the knowledge jobs that will be created as we not only expand
the global economy but connect all the knowledge pools in the world. There may be a limit to


the number of good factory jobs in the world, but there is no limit to the number of ideagenerated jobs in the world.