[FoRK] The World Is Not Flat

Jeff Bone jbone at place.org
Tue Jan 19 07:04:33 PST 2010


Thomas Friedman is wrong.

I've been thinking a lot about supply chains, lately.*  When Friedman  
says "the world is flat" what he's talking about is a supposed  
increasing tendency for producers and consumers to be participants in  
a tending-toward-fully-connected network / graph where the edges or  
arcs (directed;  potential transactions) between the vertices  
(entities such as individuals, corporations, governments, etc.) are of  
essentially equal weight.

This is a romantic, idealized, unrealistic notion.  In fact the world  
is very different;  it is characterized by increasingly-long supply  
chains with increasing intermediation and very different  
characteristics among its edges.  E.g., that thing you ate for dinner  
last night, if in the US, had components with a mean distance between  
original producer and ultimate (literal) consumer of about 2000 miles  
and something like 5-6 intermediate hops.  That finished good Joe  
Consumer buys at Wal-Mart has much fuzzier stats but in many cases has  
a supply-chain path that extends order-10,000 miles, crosses national  
boundaries 4-5 times and has a dozen intermediaries.

This topological structure comprises gradients in many dimensions.   
The world is not flat.

And this creates systemic risk.  Hypothetically each hop and each  
intermediary "adds value" to the chain and gets paid to do so;  but  
the overall metric tensor of economic-space is warped by the presence  
of trade agreements, cartels, true monopolies, etc. (including,  
particularly, intellectual property rights and agreements) that  
artificially influence such chains towards maximum length and maximum  
crossing of national, legal, and corporate boundaries to find the  
highest-margin location for each "finishing" step in the process.

This tendency is strongly encouraged by the corrupt collusion of  
governments and national or multi-national corporate entities to  
create (and strongly guard / enforce, through the coercive might of  
government and captive law) such "beneficial" trade agreements,  
contracts, and flows of money, value, and material.  It tends to  
support incumbents, encourage monopolies, block innovation, and create  
general systemic fragility / non-resiliency while aggregating created- 
value "in the middle" of the economic landscape.  All value flows  
towards the middle of the network...  and all the while the dynamic  
equilibria of the network is increasingly undermined, requiring higher  
and higher (potentially unsustainable) "input energy" (i.e., economic  
resources and non-economic forces applied) to maintain any appearance  
of stability.


Just a random thought, not fully fleshed out...


jb


* reading Suarez' "Freedom."  Interesting, if a bit crude.




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