TOPICS > Economy

A World Without Borders

December 15, 2005 at 12:00 AM EDT

RAY SUAREZ: The World Trade Organization, the WTO, began a new meeting in Hong Kong this week; 149 member countries are working toward a global treaty trying to tear down barriers between markets.

Thousands of protesters marched through Hong Kong streets protesting the WTO and globalization.

The stalemate between rich and poor countries over farm trade threatens to derail the meeting as it did in the last round of talks two years ago in Mexico. Developing nations accuse the United States, the European Union and other rich countries of not cutting agricultural tariffs and farm subsidies enough, protecting their own farmers while keeping out what poor farmers grow.

RAY SUAREZ: Is globalization living up to its optimistic billing? Is increasing global trade creating winners and losers that are permanent and a new class of worldwide criminals at the same time? We get some insight from two longtime observers of globalization, Tom Friedman, a columnist with The New York Times. His latest book is “The World is Flat: A Brief History of the 21st Century.” And Moises Naim is the editor of Foreign Policy Magazine; he’s the author of “Illicit: How Smugglers, Traffickers, and Copycats are Hijacking the Global Economy.”

Welcome to you both.

Tom, is globalization as a process now seeing an era of pushback?

TOM FRIEDMAN: I don’t think so. You know, I think you can’t mistake what is going on at these high-profile global meetings like Hong Kong, the IMF, World Trade, with what is actually going on in the world, you know, underneath.

Look in the last week we had news, Ray Ozzie, one of the chief technical officials at Microsoft issuing a memo at Microsoft saying there’s big changes afoot that are going to fundamentally affect Microsoft if we don’t adjust. What was that about? We are seeing the emergence of something called the Business Web which is going to allow small and medium-sized businesses to get their software online: A fundamental empowering event for small and individual businesses; a big challenge for traditional software companies.

Is that less important than say a daily protest in Hong Kong? I don’t think so. So if we actually look at what the technology is empowering, its globalization is going ahead apace; it has its problems; it has its benefits, but I wouldn’t mistake what is going on in Hong Kong with what is happening on the platform that is actually driving globalization.

RAY SUAREZ: So Moises, this is not a sign that the world is having some second thoughts?

MOISES NAIM: No, and, in fact it’s very interesting, it’s very important to de-link globalization from trade. Trade is one aspect of globalization but 9/11 was, as I mentioned, globalization, we have cultural globalization, social. The world is being connected not just by trade; ideas, and information and crime and terrorism are also connecting the world.

And in fact you could argue that what is happening in Hong Kong, where there is this stalemate of trying to sort out ways in pushing forward trade agreements is also an expression — the stalemate — is an expression of globalization because it used to be that a few countries would get together and decide. Now you have 149 countries, but you have hundreds of non-governmental organizations and activists and faith-based groups that are participating, each one with opportunity to block or influence the outcome. That is also part of globalization.

RAY SUAREZ: But has Tom’s flat world also become a place where your criminals and exploiters can more easily do business?

MOISES NAIM: No doubt. What Tom describes in his book are the forces of technology that have facilities that essentially made distance less of an obstacle. It’s essentially what allows call centers in India to be able to export services across the globe.

But those same forces, the same forces of technology, and I would add political changes, the political revolutions of the ’90s and more recently, have also enabled illicit traders, smugglers that have been with us since time immemorial, are now global in scope and very wealthy and very politically influential.

The central argument in my book is that this has been with us forever, but now has changed. And it’s changing the world and all of us with it.

RAY SUAREZ: Moises says in his book, Tom, that globalization has benefited illicit traders by weakening their enemy; that is, governments. Do you see that happening?

TOM FRIEDMAN: I mean, there is no question that what this platform, what I call the “flat world platform,” does is really empower individuals. We’ve gone from a globalization that was really built around countries to one built around companies to one that is increasingly empowering individuals.

Some of those individuals are the people Moises has written so graphically about: from drug traffickers, to human traffickers to smugglers. And some of those individuals are the NGO protesters in Hong Kong who now have Web sites — they’re connected.

Some of those individuals are the protestors in France, Ray, that you guys reported on who are connected by SMS messages and cell phones.

So this platform is to me what this is all about. And it empowers individuals to do good and ill more than ever. That’s why we live in an age where to me nothing is more important today, Ray, than imagination. Nothing is more important than what individuals imagine to do on this platform.

RAY SUAREZ: But even empowered individuals, even with their imaginations unlocked can’t necessarily enforce child labor laws, make sure that fuels are being burned in a way that doesn’t foul the air that their citizens have to breathe.

Is the waning of the government leaving bad actors free to do business however they want?

TOM FRIEDMAN: No question that there’s more — there is more scope now for the bad guys. But just to take the first part of your question, they can’t say, reverse global warming, no. But individuals can go after global brands now with a power to embarrass them globally when they abuse their workers, when they pollute a river in a way that individuals never could have in the past. It’s all what they imagine to do with that power that individuals now have.

RAY SUAREZ: Who then Moises rises? Who’s got the chops to rise up against people who steal software, people who smuggle human beings and cocaine from place to place?

MOISES NAIM: Not governments. And that’s the problem. And the story is a story of imagination as Tom was saying and the story of individuals who have been empowered by technology and new opportunities. But it is also a story of governments facing very big challenges for which they are ill-equipped: Globalization, again, globalization has empowered individuals and weakened governments. That is a reality.

Governments are by definition — the natural habitat of government — is inside the country, inside the borders. And what globalization is creating is a world where borders are easier to trespass. And whereas governments are inside there are all sorts of activities going on across borders that they have a hard time containing. And they are weaker.

I think it’s very important to bring government back and to start thinking in which ways can we empower governments and make governments more amenable to deal with these challenges.

RAY SUAREZ: Well, does it have to be a zero-sum game, Tom? I mean do corporations get more powerful, do individuals get more powerful only at the expense of government?

TOM FRIEDMAN: Well, the thing about this flat world platform, it allows the small to act really big. It also allows the big to act really small, I mean to really get down and touch you, the individual consumer.

I don’t think it has to be a zero sum game, but I think the challenge, Moises is really laying out is there are a whole lot of issues today, trade talks you began with are one of them, Ray, that require global governance. We need some kind of global governance regime to deal with global warming, to deal with trade.

But there is no global government, and so we’re kind of caught between that right now. We suddenly live in a world, a flatter world where we are caught up in these transnational forces that really require someone to provide some rules.

RAY SUAREZ: Well now there are people like Evo Morales in Bolivia telling his people that this can all be resisted, there is a way still to dig in your heels and negotiate the terms under which you live with the rest of the world. But you guys are talking about a world where borders are less relevant, and Bolivians, as opposed to anybody else, is not that relevant.

MOISES NAIM: And the part of the irony there, it is fantastic because yes, Evo Morales can say this is all about gas, for example, Bolivia has found huge gas and the debate inside that country is who is going to export that gas, who are going to be foreign, multinationals, locals and so on? And then there is free-trade agreement. While that is happening and Evo Morales is against globalization, his country is one of the most effectively globalized countries in the Andes. He can, in his country cocaine is exported and placed in 48 hours in the streets of Miami.

There is no other industry more effective, more efficient, more globalized than the cocaine exporters in Bolivia. So arguing that Bolivia is not globalized, is you know, it’s not globalized in other things, some of the good things. It would be wonderful if Bolivia could get some of the benefits of globalization. But now it is only getting half of it and all of it is illicit.

RAY SUAREZ: Is a false dichotomy set up where, you know, you either think globalization is good or you think it’s bad when actually something more subtle is going on?

TOM FRIEDMAN: You know, I have a simple mantra on this, Ray, which is when it comes to globalization, if you think it is all good or all bad you don’t get it, all right. It’s about a flat platform and it’s really how you use it. And also, there are definitely, because this thing pushes and promotes change much faster, there are going to be winners and losers much faster.

But look at what’s going on today, the small individual companies, medium sized businesses that we were told, you know, five years ago, if are you big you are great, if are you small, you are great; if are you medium, you’re dead. Suddenly they’re discovering on this platform they can survive.

You’ve got to figure out how to get the best out of it and cushion the worst. Just don’t tell me you think it’s going to go away or you are going to put up a wall against it. You tell me that and I’m gonna check my wallet. I came in here with $50; I’m going to leave with $50.

RAY SUAREZ: But Moises at the same time there are countries in sub-Saharan Africa, in central Asia that don’t seem to have a lot to sell to the rest of the world. And it’s hard to see where they fit in this new flat platform.

MOISES NAIM: It’s very interesting to see that in those countries that we argue that they don’t have anything to sell, somebody finds something that that country has. It’s either some location, Haiti — Haiti doesn’t have much to sell. Haiti — and is a failed state in which harrowing things are happening. But Haiti has become a haven for criminals. Haiti is today ruled by a bunch of networks that are using Haiti as a transshipment point for all the drugs that are coming in. So Haiti is selling locational advantages and locational positions and lack of government and lack of rule of law.

A lot of the failed states that you see around the world, the moment that the government fails, it is replaced by these networks that immediately hone in and develop and exploit and export. Perhaps the only good thing that the country, that the rest of the world has is either logging or is either diamonds or is it drugs and opium or is it people?

And the point is that all of these countries at the end of the day are globalized. And in fact, in many, and the point of the book “Illicit” is that it’s this illicit trade that is reshaping much of the world. There is more going on under the radar than what is going on in Hong Kong. Illicit traders are reshaping the world in far more important ways than the ministers now meeting in Hong Kong.

RAY SUAREZ: Moises Naim, Tom Friedman, good to talk to you both.

MOISES NAIM: Thank you.