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October 2, 2007

Chapter 4: The Great Sorting Out

Filed under: Uncategorized — yoddha @ 2:40 pm

The revolution has just started and it is already influencing the lives of individuals, communities, companies and countries around the world in both positive and negative ways. The world will adjust to this flat world as the flattening continues and therefore, following the ‘The Triple Convergence’ that started around the year 2000, we are going to see ‘The Great Sorting Out’.

The flattening theory put forward by Friedman is similar to Karl Marx’s Communist theory in one way that both lay emphasis on how the new technology and capital remove the barriers, boundaries and restraints to the global economy in the future. But there is a problem as these barriers are removed. What will replace these barriers? We do not know this. But we do know that human beings need agreed norms of behavior and rules of commerce.

Friedman then through different complex instances tells us the importance of sorting out between different reasons.

India or Indiana: While outsourcing jobs to India means less jobs for Americans but if this does not happens, then it means less profit to different multinationals and thus lesser incomes to Americans.

A company belongs to whom: Earlier, it was said as General Motor goes, so goes America. Today, as Dell goes, so goes Malaysia, China and India. In 2004, when IBM and Lennovo collaborated, now is IBM Lennovo an American company or Chinese company?

Mutliple Identity disorder: Most of Wal-Mart’s employees do not earn as much as to get health insurance for their family. This leads to more discounts at Wal-Mart and thus more benefit for customers. But as tax-payer, you indirectly pay for the insurance of such employees. As shareholder, you get money from Wal-Mart. So for different identities, this flattening has different effects. How much flattening do you want?

Who owns what: While flattening leads to removal of barriers, it also leads to violation of intellectual rights. Do you want the world to be totally without barriers?

So during the coming years, different units in this global world need to collaborate and decide what values and frictions need to be preserved.

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