[FoRK] The World Is Not Flat
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
Just a random thought, not fully fleshed out...
* reading Suarez' "Freedom." Interesting, if a bit crude.
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