The World Is Flat

A South Asian Muslim friend of mine once told me this story: His Indian Muslim family split in 1948, with half going to Pakistan and half staying in Mumbai. When he got older, he asked his father one day why the Indian half of the family seemed to be doing better than the Pakistani half. His father said to him, “Son, when a Muslim grows up in India and he sees a man living in a big mansion high on a hill, he says, 'Father, one day, I will be that man.' And when a Muslim grows up in Pakistan and sees a man living in a big mansion high on a hill, he says, 'Father, one day I will kill that man.'” When you have a pathway to be the Man or the Woman, you tend to focus on the path and on achieving your dreams. When you have no pathway, you tend to focus on your wrath and on nursing your memories.

India only twenty years ago, before the triple convergence, was known as a country of snake charmers, poor people, and Mother Teresa. Today its image has been recalibrated. Now it is also seen as a country of brainy people and computer wizards. Atul Vashistha, CEO of the outsourcing consulting firm NeoIT, often appears in the American media to defend outsourcing. He told me this story: “One day I had a problem with my HP printer-the printing was very slow. I was trying to figure out the problem. So I call HP tech support. This guy answers and takes all my personal information down. From his voice it is clear he is somewhere in India. So I start asking where he is and how the weather is. We're having a nice chat. So after he is helping me for about ten or fifteen minutes he says, 'Sir, do you mind if I say something to you?' I said, 'Sure.' I figured he was going to tell me something else I was doing wrong with my computer and was trying to be polite about it. And instead he says, 'Sir, I was very proud to hear you on Voice of America. You did a good job...' I had just been on a VOA show about the backlash against globalization and outsourcing. I was one of three invited guests. There was a union official, an economist, and myself. I defended outsourcing and this guy heard it.”

Remember: In the flat world you don't get just your humiliation dished out to you fiber-optically. You also get your pride dished out to you fiber-optically. An Indian help-line operator suddenly knows, in real time, all about how one of his compatriots is representing India half a world away, and it makes him feel better about himself.

The French Revolution, the American Revolution, the Indian democracy, and even eBay are all based on social contracts whose dominant feature is that authority comes from the bottom up, and people can and do feel self-empowered to improve their lot. People living in such contexts tend to spend their time focusing on what to do next, not on whom to blame next.

The Curse of Oil

Nothing has contributed more to retarding the emergence of a democratic context in places like Venezuela, Nigeria, Saudi Arabia, and Iran than the curse of oil. As long as the monarchs and dictators who run these oil states can get rich by drilling their natural resources-as opposed to drilling the natural talents and energy of their people-they can stay in office forever. They can use oil money to monopolize all the instruments of power-army, police, and intelligence-and never have to introduce real transparency or power sharing. All they have to do is capture and hold the oil tap. They never have to tax their people, so the relationship between ruler and ruled is highly distorted. Without taxation, there is no representation. The rulers don't really have to pay attention to the people or explain how they are spending their money-because they have not raised that money through taxes. That is why countries focused on tapping their oil wells always have weak or nonexistent institutions. Countries focused on tapping their people have to focus on developing real institutions, property rights, rule of law, independent courts, modern education, foreign trade, foreign investment, freedom of thought, and scientific enquiry to get the most out of their men and women. In an essay in Foreign Affairs called “Saving Iraq from Its Oil” (July-August 2004), development economists Nancy Birdsall and Arvind Subramanian point out that “34 less-developed countries now boast significant oil and natural gas resources that constitute at least 30 percent of their total export revenue. Despite their riches, however, 12 of these countries' annual per capita income remains below $1,500... Moreover, two-thirds of the 34 countries are not democratic, and of those that are, only three score in the top half of Freedom House's world rankings of political freedom.”