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For Workers, 'The World Is Flat'

New York Times foreign affairs columnist Thomas Friedman's new book, The World is Flat, explores the effects of outsourcing and globalization. The book, subtitled "a brief history of the 21st century," connects recent business trends with social issues.

42:51

Other segments from the episode on April 14, 2005

Fresh Air with Terry Gross, April 14, 2005: Interview with Thomas Friedman; Obituary for Johnnie Johnson.

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*****

SHOW: Fresh Air

DATE: April 14, 2005

TERRY GROSS, host:

This is FRESH AIR. I'm Terry Gross.

Once you find out that your customer service call to an 800 number may be
answered by someone in India or that your MRI might be read by a doctor in
Australia, and once you or someone you know has lost a job because it was
outsourced to another country, the global economy becomes very personal.

My guest is Tom Friedman, the Pulitzer Prize-winning foreign affairs columnist
for The New York Times. His new book is all about the global economy, how it's
changing our lives, our country and the world. The book is called "The World
is Flat," and by flat, Friedman means that the new information technologies
have leveled the playing field, and countries like India and China can compete
for work as never before. Friedman says America had better get ready.

Friedman wrote a best-selling book about the global economy in 1999 called "The
Lexus and the Olive Tree." I asked him how he thinks the meaning of globalism
has changed since then.

Mr. THOMAS FRIEDMAN (Author): Well, what I really argue in this book, Terry, is
that we've gone through three great years of globalization. One I would call
globalization 1.0 lasted from 1492 till around 1800. And that era of
globalization really shrunk the world from a size large to a size medium. And
what was unique about that era was that globalization in that era was really
driven by countries globalizing: Spain discovering America, Britain occupying
India, Portugal in East Asia. And so you went global in that era of
globalization 1.0 through your country.

The second great era of globalization was from the early 1800s till the year
2000. It just ended. And that era, globalization 2.0, as I call it, shrunk
the world from a size medium to a size small. And that era was really driven
by companies globalizing for markets and for labor. And "Lexus and the Olive
Tree" was really written about the tail end of that era. What I didn't know
when I was writing that book was that we were just about to enter globalization
3.0.

And this era is shrinking the world from a size small to a size tiny and
leveling the playing field at the same time, flattening the economic playing
field. Only this era is not going to be built around countries globalizing,
and it's not being built about companies necessarily globalizing. What's
really unique about this era of globalization, Terry, 3.0, is that it's going
to be built around individuals and small groups globalizing. That's the new
new thing. They are the dynamic element, and be advised it isn't going to be
just a bunch of white Western individuals who dominated globalization 1.0 and
2.0. It's going to be individuals of every color of the rainbow.

So what's happened, in summary, since "Lexus and the Olive Tree" is the world
went from small to tiny, and the playing field really got flat. So more people
from more different places, from more different backgrounds can plug and play,
compete and collaborate now than ever before.

GROSS: So what's a good example of this new kind of globalization you're
describing where it's about individuals as opposed to companies or countries?

Mr. FRIEDMAN: One of the scariest examples of this is actually al-Qaeda. It's
a perfect example of a small group that has been able to act globally on this
flat world. The flat world, Terry, unfortunately, is a friend of both al-Qaeda
and of Infosys, the leading outsourcing company in India--one of the leading
outsourcing companies in India.

So a good example, though, of, again, individuals of small groups is a young
man I profile in the book, Rajesh Rao, who started a gaming company, a company
that designs video games that play on cell phones and from basically a basement
in Bangalore. They now have a larger facility. And Rajesh Rao, who's a
30-something young Indian, today owns the rights of Charlie Chaplin's image for
global gaming.

GROSS: When you describe a country as flat, what do you mean?

Mr. FRIEDMAN: What I mean is that the convergence of technologies and companies
that came together at the end of the 1990s, converging right around the year
2000, has created a global web-enabled platform that allows for multiple forms
of collaboration on different kinds of work and sharing of knowledge,
irrespective of distance, geography, time and, increasingly, even language. It
is this global platform for sharing knowledge and work that came together right
around the year 2000 that I argue is what flattened the world. And flat
countries are those that can really plug and play seamlessly with this
platform.

GROSS: You know, a lot of people ask themselves, `Is globalization a good thing
or a bad thing?' And a lot of your readers ask themselves, `Is Tom Friedman for
or against globalization?'

You have an interesting thought in your book. You write about Wal-Mart, and
you write about all the different things that Wal-Mart represents and how
different parts of us like or dislike different parts of what Wal-Mart
represents. You want to just run through some of those things?

Mr. FRIEDMAN: Sure. You know, we have, as Americans, when it comes to
Wal-Mart, Terry, what I would call multiple identity disorder because, gosh,
the consumer in us loves those Wal-Mart prices, and, wow, the shareholder in us
loves having Wal-Mart stock in our 401(k). But, man alive, the citizen in us
is really troubled by the fact that Wal-Mart covers less than half its
employees with health care compared to, say, Costco which covers, you know, the
vast majority or Starbucks. And as a result of that, you've got Wal-Mart
employees who, when they get sick, end up going to the emergency ward at their
local hospital, and we, as taxpayers, pay for that.

And the neighbor in me also can be troubled by Wal-Mart by some of its
employment practices, whether it was the discrimination of women that it was
alleged to have been involved in or locking some employees in its stores
overnight. So, you know, Wal-Mart is very typical of--as we come to these
global companies now with different identities--consumer, shareholder, citizen
and neighbor--they trigger very, very different reactions from all four of
those categories.

But my general view about globalization, Terry, is very simple. If you think
it's all good or if you think it's all bad, you don't get it. It's built on
networks which are flat and go both ways. It's all about what we make of it,
how we get the most out of it and cushion the worse.

GROSS: Since we've talked a little bit about Wal-Mart, what did Wal-Mart do to
become the big global company that it is?

Mr. FRIEDMAN: Well, I think one of the interesting things about Wal-Mart and
what I certainly learned most in doing my research on Wal-Mart, which is one of
the 10 forces that flattened the world that I identify in the book, is that,
you know, Wal-Mart was an incredible innovator. You really have to go to
Bentonville, Arkansas, Wal-Mart's headquarters, to get Wal-Mart. And you could
really understand its strengths and its weaknesses and why it got into so much
trouble when you go to Bentonville because you go down there to northwest
Arkansas--you fly into Northwest Arkansas Regional Airport and it really
is--it's Little Abner country, you know. I mean, it's Podunk,
end-of-the-world-ville, OK. And then you think, `Holy mackerel, from this, you
know, corner of nowhere, they erected a global supply chain down to the last
atom of efficiency whereby if you take an item off the shelf in a Wal-Mart in
Bentonville, Arkansas, another is immediately made in Shenzhen, China.'

Well, so how did that happen? Well, it was precisely because they were in the
middle of nowhere that Sam Walton, the founder of Wal-Mart, became an early
adopter. This guy--whenever a new technology came out, he adopted it.
Computers; Wal-Mart was really the first big retailer to deploy computers for
managing inventory and reordering and tracking sales. Yeah, out there in, you
know, Podunk, Arkansas. Wireless technology; to have their trucks not only,
you know, deliver goods to their store, you know, in East Podunk, but be able
to connect to that driver wirelessly to say, you know, `While you're delivering
those goods to the store, afterwards if you just turn right a couple miles, you
can pick up some goods from the factory down there and bring them back so the
truck doesn't have to come back empty,' saving all kinds of money which they
were then able to pass on to consumers.

The secret of Wal-Mart is it is a mean, you know, in many cases, tough company,
you know, very tough on its suppliers and some people allege very tough on its
workers. And even Wal-Mart has admitted it could do better in a lot of these
areas. But if you think Wal-Mart just got ahead because it was mean and tough,
you're really missing the point. They beat the pants off their competitors by
out-innovating them also.

GROSS: And by outsourcing a lot of the products that they sell.

Mr. FRIEDMAN: That was part of the innovation. If Wal-Mart were a country
today, it would be China's eighth-largest trading partner.

GROSS: So one of the essential dilemmas about Wal-Mart and where you stand,
vis-a-vis, a company like Wal-Mart is, on the one hand, as we were saying
before, you get to buy cheap goods. On the other hand, a lot of jobs are lost
to companies like this because in order to sell the stuff cheaply to us, they
have it manufactured in developing countries where labor is much cheaper. OK,
so you're out of a job but you can buy cheap goods.

Mr. FRIEDMAN: Yeah, that's a real dilemma. It's a dilemma for Wal-Mart, too,
because their stores are often in communities where--you know, they are one- or
two-factory towns. What the Wal-Mart people will tell you--and I'm not here to
defend them--but what they will tell you is they have worked, in some cases,
particularly in Arkansas, with the Sanyo factory, for instance--the example
that they site--to keep jobs in America because they understand that what good
is it to have a Wal-Mart store in the Sanyo town in Arkansas when the Sanyo
factory moves to Mexico or to China? Well, you know, by working with Sanyo,
they've since produced 50 million television sets in Arkansas.

But this is a dilemma. It's the dilemma of the flat world. At the same time,
you know, I would much prefer the people, you know, working in those factories
not to be competing, trying to make low-end goods for Wal-Mart. I'd much
prefer investing in their education to move them up, you know, the work scale,
not scrambling, you know, to compete with low-end jobs with Chinese. And
that's why what I've been saying is, you know, the president's out there right
now, in effect, trying to take apart the new deal by privatizing or partially
privatizing Social Security at a time when what we really need is a new new
deal around making more Americans employable in an age--in a flat world where
no one can guarantee you anymore lifetime employment.

GROSS: You write that, you know, since multinationals first started exporting
jobs to countries with cheap labor, their interests have gone beyond those of
the country that they were headquartered in, but that things have gotten worse
and they've gotten much more confusing. And you give us an example, what
happened in December of 2004 when IBM announced that it was selling its
personal computer division to a Chinese computer company in order to create a
new worldwide computer company. So would you talk a little bit about this
complicated mix of Chinese and American ownership and leadership?

Mr. FRIEDMAN: What happened, of course, was IBM decided to sell its PC
business--which has really become a commodity business--to, I believe, the
leading Chinese PC maker called Lenovo. And as a result of this deal, IBM
became a part owner of Lenovo. What they did as a result of this deal was to
merge their top leadership, so this company now has a Chinese chairman, I think
it's got an American CEO, a Chinese CFO, you know, a chief financial officer.
And the whole sort of top management now is completely mixed between the two.
And IBM now has an enormous interest in seeing this Chinese company, of which
it is a substantial shareholder still, thriving in the PC business in
competition, say, with a Dell or with a Hewlett-Packard.

GROSS: And you ask the question, `So what country will this company be almost
attached to?' Is there any way of answering that?

Mr. FRIEDMAN: I don't think so, Terry, and that's really why I posed it. You
know, in the flat world, owners of capital, whoever they are--whether they're
Chinese or Russian, Spanish, Brazilian or American--owners of capital really
are in a great position because they can kind of sit back and look now at the
whole global playing field and see where their capital can be deployed most
efficiently or with the greatest return and just move it out there as they
like. So, you know, when the world goes flat, to be an owner of capital, boy,
your choices--the smorgasbord just got about 10 times longer.

GROSS: My guest is Tom Friedman, foreign affairs columnist for The New York
Times. His new book is called "The World is Flat." More after a break. This
is FRESH AIR.

(Soundbite of music)

GROSS: My guest is Tom Friedman. His new book, "The World is Flat," is about
how the new global economy is affecting our lives, our country and the world.
He says when it comes to political debate about the global economy, things can
get tricky and confusing. He gave me this example.

Mr. FRIEDMAN: In 2002, I believe it was, the state of Indiana decided to
outsource the processing of the state's unemployment checks. I mean, you
couldn't make this up. And they put it out to bid and three people bid on it,
two American consulting firms--no company from Indiana bid on it--two American
consulting firms and the third bid came in from TATA Consulting Services of
Mumbai, India. And the TATA bid came in at $8.1 million less than the two
American consulting firms. And the state of Indiana awarded the contract for
outsourcing the state of Indiana's unemployment checks and kind of the whole
department managing unemployment to this Indian consulting firm.

Well, they came over, the top folks, to Indianapolis. They hired some people,
and everything was going along swimmingly when the governor of Indiana at that
time tragically died very suddenly. There was an election that followed, and
the Republicans--the free-trade Republicans, Terry--made a huge stink about
this outsourcing contract and basically forced the state to cancel it and to
pay TATA nearly $1 million to buy out the contract.

Now I just have a simple question for you? Who was exploiting who in this
story? Were the people of Indiana exploiting the Indian engineers who they
were paying a very good wage to--a decent wage in American terms, a phenomenal
wage in Indian terms--to come over to the United States, giving them the first
opportunity many of them had to use their skills that had been honed in India
but that rotted on the docks of India like vegetables for 50 years because when
the world wasn't flat, they couldn't get out and bid on a contract like this?
Were the people of Indiana exploiting the engineers of TATA? Or were the TATA
engineers, who were going to save the people of Indiana $8.1 million, money,
tax dollars the people of Indiana could use for schools and hospitals and roads
and training programs for workers--were those TATA engineers exploiting the
people of India?

See, when the world was vertical, Terry, you could see just who was on top and
just who was on the bottom. But when we moved to horizontal, who's on the left
and who's on the right becomes really complicated. And that's the kind of
political world I think we're heading into.

GROSS: Some people would like to see the government erect some kind of trade
barriers that restrict outsourcing and offshoring or at least reward companies
that keep their jobs in the States and keep their companies in the States.
Could you briefly go over a couple of the pros and cons of each side of that
argument?

Mr. FRIEDMAN: Well, you know, the pro side of that is that, OK, you know, when
we're talking about furniture-making jobs, all right, we can understand losing
those to India. But what happens when we're talking about high-end software
jobs? X-ray, radiological jobs? We're talking about some serious research
jobs now being outsourced. How can that be a good thing? That's certainly the
con side of it. And you have to take that argument seriously. I certainly try
to in this book.

On the pro side of it--and this is where most economists, ultimately, come down
and where I come down, ultimately--is the following reality as well, which is
that--think about after World War II, Terry. A lot of people said we stood
astride the world after World War II. We had the completely dominant world
economy. I mean, we had our industrial base basically still in shape and
Europe was flat on its back. Now what did we do after World War II? We
invested in the Marshall Plan to rebuild Europe into a competitor with us. And
what's been the result of that? Our standard of living in this country has
grown for six straight decades because the global pie not only got bigger but
it got more complex at the same time. So Europe specialized in some things, we
specialized in others and, as a result, our incomes, individually and
collectively, both grew steadily.

Now I would argue that now we're just adding a couple more populations: India
and China. I think there is going to be a transition cost--some people are
going to get moved out of some specialties and into others--but I think
net-net, it's going to be a plus. But, although I come down on that side of
the ledger, I come down there, you know, not glibly. I believe that as a
society, we've now got to be making the right choices to make sure more and
more of our citizens are going to be employable and be able to take advantage
of this bigger global economy, more complex but one that will require more
knowledged skills.

And that's why I say to my girls, `Girls'--when I was growing up, my parents
used to say to me, `Tom, finish your dinner. People in China and India are
starving.' And what I say to my girls growing up is, `Girls, finish your
homework because people in China and India are starving for your jobs.'

GROSS: Tom Friedman is the foreign affairs columnist for The New York Times.
His new book is called "The World is Flat." He'll be back in the second half of
the show. I'm Terry Gross and this is FRESH AIR.

(Soundbite of music)

GROSS: Coming up, we continue our discussion with Tom Friedman, foreign affairs
columnist for The New York Times. And we will look at the Middle East.

Also, we remember the Johnny of "Johnny B. Goode". Johnny Johnson, Chuck
Berry's pianist for over 20 years, died yesterday at the age of 80. We'll
listen back to a 1991 interview.

GROSS: This is FRESH AIR. I'm Terry Gross, back with Tom Friedman, Pulitzer
Prize-winning foreign affairs columnist for The New York Times. He's written a
new book about the global economy called "The World Is Flat."

(Technical difficulties) ...and our ability to get jobs. This is also
happening in a climate where the United States is growing deeper and deeper
into debt, and we can continue to function because other countries have bought
our Treasury bills, so...

Mr. FRIEDMAN: Yeah.

GROSS: ...what are some of the countries that have bought the most Treasury
bills and that we are most indebted to right now?

Mr. FRIEDMAN: Well, China and Japan and South Korea, basically, are the biggest
holder of our Treasury notes, and we've kind of got each other over a barrel in
a way, Terry, because on the one hand, you know, there's an old saying that,
you know, when someone owes you a thousand dollars, that's their problem, and
when someone owes you a million dollars, that's your problem. So, you know, on
the one hand, you know, we've got all these people holding all of this money,
and in many ways, that's part of our problem, because we are in debt to them,
and in the event of a war, you know, with China or any kind of global conflict,
they have leverage over us.

That's the problem from our side. From China's side, though, the reason that
they've got all these Treasury bills is because they're manufacturing and
selling so much stuff to us, and if we were to stop buying all that stuff,
their economy would slow down. It would lead, I think, to instability inside
China, and God knows what would flow from that. So we've got each other over a
barrel basically. And when this barrel stops rolling or when it rolls over a
cliff, I don't know. But right now, it kind of works for both of us. But,
boy, I'm not really comfortable in the long run seeing China, Japan and other
countries holding so much of our debt and basically subsidizing the fact that
we are spending and buying so much more than we're saving. I don't think it's
healthy to have that big a disequilibrium in the world, where a couple of
countries are holding so much of your debt. It gives them leverage over us,
which, in the event of a crisis, is a huge, huge unpredictable factor.

GROSS: Let's look at something else in the global economy, and this is kind of
old school global economy, and I'm thinking of oil. Well, I guess it's old
school and new school, perpetual school. But oil has been a big issue for you
over the years. You've written about it a lot.

Mr. FRIEDMAN: Yeah.

GROSS: You think that there should be a steep oil tax that Americans pay, a gas
tax. And because you...

Mr. FRIEDMAN: No, no, you've got that totally wrong.

GROSS: I've got that wrong. Oh, OK.

Mr. FRIEDMAN: Yeah. Here's what's the reality. We're already paying a tax,
OK. I mean, if you noticed, since 9/11, your gasoline has gone from a dollar
and a quarter a gallon basically to, in some cases, $3 and more. We're paying
a tax. There's just one problem I have with that tax. It's going to the
government of Saudi Arabia, the government of Russia, the government of
Venezuela, the government of Iran and the government of Sudan. Now how stupid
is that, OK? Had we had a patriot tax after 9/11, which I advocated, among
others, of a dollar or two a gallon, well, gasoline today would still be around
$3 a gallon. There's just one difference. Those two extra dollars would have
gone to our schools, our roads, our scientific institutions. So we've had a
gas tax, but we've paid it to the government of Saudi Arabia.

GROSS: Do you think if...

Mr. FRIEDMAN: Dumb, really dumb.

GROSS: ...we were paying more money for gas all along, we would have been
conserving it and wouldn't be that reliant on the Saudis...

Mr. FRIEDMAN: Absolutely.

GROSS: ...and some of the other countries?

Mr. FRIEDMAN: We need gasoline prices in this country to be set at $4 a gallon,
no matter what happens with the global crude oil price. Now if gas were $4 a
gallon and everything, you know, above the crude oil price would be captured in
taxes for the US government, what effect would that have, Terry? Number one, at
$4 a gallon, you will change people's behavior. Everyone will be out clamoring
for a hybrid, and that will force General Motors, you know, Ford and Chrysler
to really transform their fleets to hybrid vehicles that can get 40 to 50 miles
a gallon. Four dollars a gallon will change people's behavior, number one.

Number two, as a result, we'll be importing less crude oil, which will
strengthen the US dollar. Number three, as a result of that, we will be
putting fewer, you know, CO2 emissions into the atmosphere and doing less
global warming and be great for our lungs and the lungs of the world. Fourth,
we will be the leaders of the world in the green movement. We will go from
last to first. The country that rejected Kyoto will be doing more to make the
world a greener and cleaner place than any country in the world, which will
enormously elevate our standing.

Fifth, we will be able to defray some of the costs of the tax cuts of recent
years and start to pay down the deficit or at least lessen the rise of the
deficit. As my friend Michael Mandelbaum says in the book, Terry, this isn't
just win-win. It's win-win-win-win-win.

GROSS: You're also concerned that since we're buying so much oil from Saudi
Arabia, Sudan, that we are bolstering those regimes, and we are making it less
necessary for them to reform because they got all this dough coming in.

Mr. FRIEDMAN: Absolutely. We're funding both sides in the war on terrorism.
Now how smart is that? We're funding the US Army, Air Force, Navy and Marine
Corps to go out and confront the terrorists in Iraq and Afghanistan, and at the
same time, we're indirectly funding, through the Saudi government, the mosques,
the charities and the madrassas, which are funded by Saudi oil and Saudi donors
that are producing the young people who are fighting our troops in Iraq, in
Afghanistan, in Pakistan and elsewhere. We're funding both sides in the war on
terrorism.

GROSS: My guest is Tom Friedman, foreign affairs columnist for The New York
Times. His new book is called "The World Is Flat." More after a break. This
is FRESH AIR.

(Soundbite of music)

GROSS: If you're just joining us, my guest is New York Times foreign affairs
columnist, Tom Friedman, and his new book is about globalization and how it's
affecting us individually and is affecting our country and the world. The book
is called "The World Is Flat."

Let's look a little bit about what's happening in the Middle East right now.
One of the theories behind invading Iraq was that we would find weapons of mass
destruction, but also that if Iraq became democratized, democracy would sweep
across the Middle East, including to Israel and the Palestinians. And, you
know, Arafat has since died. There's a new head of the Palestinians now.
Elections for the Palestinians will be taking place in July. What impact, if
any, do you think the invasion of Iraq and the recent election in Iraq is
having on the relationship now between the Israelis and the Palestinians?

Mr. FRIEDMAN: Well, as you know, because we talked about it several times, I
supported the war, not for WMD reasons, because I never really believed there
was any WMD in Iraq that threatened us, but for these democracy reasons. And
I'll be the first to confess to you, Terry, that the last couple of years have
been very difficult for me as a columnist. I certainly had many dark mornings,
like many Americans did who cared about what was going on out there, where I
feared I had supported the biggest disaster in American foreign policy in my
lifetime. But I at least hung in there long enough to see that maybe we have a
shot of, you know, turning this thing into what a lot of us hope for, which is
the beginning, the seeds of a real turn in that part of the world.

And so I think the elections in Iraq were huge, and I think they've not only
triggered the democratization movement in Iraq, but they also contributed to
the seat of revolution in Lebanon. They put pressure on Egypt's president,
Hosni Mubarak, to offer to have a more legitimate, multicandidate election for
presidency of Egypt in the next six months. And lastly, they certainly have
helped contribute to the democracy movement among Palestinians. I think it's
way, way too soon for a victory lap, though, because you'll only want to claim
victory here when we see any one of these four democracy movements
self-sustaining.

We will have really achieved something in Iraq when Iraqis can have a free and
fair election without a hundred and forty thousand American troops present, and
that's really what I'm looking for. But, you know, we've taken some important
steps in that direction. This is a big, big deal.

GROSS: How much of an impact do you think the elections in Iraq really is
having on the Palestinians? Do you think it's coincidence that the election in
Iraq happened at about the same time as the death of Yasser Arafat, or do you
think that the elections in Iraq really are an impetus to change?

Mr. FRIEDMAN: I think the elections in Iraq had the biggest influence on Egypt
and Lebanon. I think the biggest influence on the Palestinians was the death
of Arafat and, therefore, the necessity to elect a new leader. And Israel's
decision to unilaterally withdraw from the Gaza Strip, which made the election
of a new leader who could be an interlocutor with Israel on that withdrawal of
great importance. So I would put those factors ahead of the Iraqi election in
the case of the Palestinians.

GROSS: What will the significance of this Palestinian election in July be like?
What will they be voting for?

Mr. FRIEDMAN: Well, these are going to be parliamentary elections, Terry, and
the really significant thing about them is that for the first time in a long
time, Hamas is going to take part. Yes, the Palestinian Islamic fundamentalist
party is going to take part, and they will be competing head-to-head with Al
Fatah, the kind of centrist Palestinian party, once headed by Yasser Arafat,
now headed by his successor, Abu Mazen. And Al Fatah is still perceived, I
think, as a rather corrupt party at this stage, and its governing skills have
been, you know, widely challenged and criticized. Hamas could do very well.

I personally welcome that. I would have no problem if Hamas swept these
elections, because I believe the only way to really transform groups like Hamas
is by the burden of responsibility. You know, right now, they've been sitting
on the outside, carping, `No, no, let them be in charge, let them have to get
people jobs and pick up the garbage and deliver the electricity, and then we'll
see, you know, how they perform,' but I think that is really how you moderate
them. That's why I've been advocating in Iraq that we make Muqtada Sadr the
minister of labor. Yeah. `Muqtada, this Bud's for you, pal. You are going to
be minister of labor. You're going to--you know, all those people you're
mobilizing on the streets, well, let's see if you can mobilize a little
investment to get some jobs, and if you can't, then shut up, OK, pal, but no
more sniping from the sidelines.'

GROSS: Meanwhile, in the Middle East, Ariel Sharon wants to withdraw Israeli
settlers from Gaza, but at the same time, he wants to build new settlements in
the West Bank, which President Bush says violates the road map for peace.

What is the logic behind his strategy, Sharon's strategy right now?

Mr. FRIEDMAN: Well, some would say, his critics would say, Terry, that he is
getting rid of the Gaza Strip in order to keep the West Bank, and that part of
his tactic in winning a stable Israeli majority for getting rid of Gaza is by
indicating that he's ready to keep building some of these settlements. So
that's his strategy. You know, I've always had a rule--a lot of rules about
the Middle East, but one of my most important rules is the following. In the
Middle East, the way you get change is when the big players do the right thing
for the wrong reasons. If you wait for people out there to do the right thing
for the right reasons, you'll wait forever. But never mind. I don't care if
people are doing the right thing for the wrong reasons. If and when Israel
does give up the settlements in Gaza, which would be a huge precedent, and get
out of the Gaza Strip, the Palestinians, Terry, are going to for the first time
really have their own place in the sun.

Now let's be very clear about this. It is a miserable place. It's the Gaza
Strip. It is a miserable place in the sun. But if they make of this miserable
place something that looks more like, say, Dubai, and a lot less like
Mogadishu, that's going to have a huge impact on Israeli thinking about the
future of the peace process. If Palestinians are able to really work with
Israelis and also draw an investment, get jobs, make something just decent out
of the Gaza Strip, well, that's going to affect Israeli attitudes about turning
over the West Bank. If they don't, if it becomes a mess, if it becomes a mess
because of what they do, it becomes a mess because of what Israel does or
doesn't do, well, that, too, is going to affect very much the future debate
about the West Bank. So we've got a new dynamic.

GROSS: But if Israel pulls out from the Gaza Strip, but builds more settlements
in the West Bank, how is that likely to affect an actual long-term peace
settlement with the Palestinians?

Mr. FRIEDMAN: Oh, I think it will undercut it. I think it will be not only
counterproductive, I think it'll be just inviting intifada three, and if Israel
does that, it would be a very, very foolish thing. And the United States
should say that.

GROSS: Do you think we're heading in that direction? I mean, do you think
Israel is heading in that direction?

Mr. FRIEDMAN: I don't know. You know, one of the things about this moment,
Terry, that you've got to be careful about, Sharon is still trying to hold as
much a majority as he can in order to make the withdrawal from Gaza as peaceful
as possible. We could see Jews killing Jews over this. Ariel Sharon's own
life has been repeatedly threatened. You can't get near him. He's surrounded
by a football team of Shin Bet agents, OK, and not protecting him from Arabs
but from Jews. So because of that, he may be floating things about, you know,
winking and nodding about future settlements that may come to fore and may
never come to fore. And it's about creating as big a coalition as he can right
now to get through this Gaza withdrawal.

GROSS: My guest it Tom Friedman, foreign affairs columnist for The New York
Times and author of a new book about how globalization is affecting the world,
our country and our own individual lives. It's called "The World Is Flat."

You've said that globalization has been a friend to al-Qaeda at least as much
as it has to the successful multinationals. What do you mean by that?

Mr. FRIEDMAN: What I mean by that, Terry, is something I explain in the last
chapter of the book, which is called "11/9 or 9/11." You know, in a wonderful
kind of cabalistic accident of dates, the Berlin Wall came down on 11/9,
November 9th, 1989. And, of course, you know, we all know what 9/11 is about.
Well what I argue in this chapter, basically, is that 11/9 and 9/11 really
represent the two competing forms of imagination out there in the world today.
And what happens, you see, when the world goes flat is all the tools of
collaboration become really available to so many more people, they become
commodities.

But there's one thing, Terry, that never gets commoditized, and that's
imagination, what you bring to those tools. Do you bring to those tools the
imagination of 11/9 or the imagination of 9/11? So one thing I point out in
the last chapter of this book is that in February of 1999, two people started
airlines. One airline was called JetBlue. It was started by a remarkable
American entrepreneur named David Neeleman. He went out, raised the cash to
buy the airplanes, outsourced the pilot training to schools around America,
outsourced the reservation system to housewives and retirees living in Salt
Lake City. Yeah, if you call JetBlue, you're actually talking to someone in
their bedroom or their kitchen in Salt Lake City, Utah. And out of scratch,
in--beginning in February 1999, David Neeleman started what is now maybe the
most successful airline in America.

Unfortunately, Terry, what we know from the 9/11 report is someone else started
an airline almost exactly the same time in Kandahar, Afghanistan. His name was
Osama bin Laden. He outsourced the pilot training to flight schools in
Florida. He outsourced the planning to Khalid Sheik Mohammed. He outsourced
the financing to a banker in the United Arab Emirates. Both airlines were
designed to fly into New York City: one into JFK, the other into Lower
Manhattan.

Those are the two competing forms of imagination in the world today.
Unfortunately, Terry, the flat world is a friend of both Sam Walton and Osama
bin Laden.

GROSS: Tom Friedman is the foreign affairs columnist for The New York Times.
His new book is called "The World Is Flat."

Coming up, we remember the Johnnie of "Johnnie B. Goode." Chuck Berry's former
pianist Johnnie Johnson died yesterday. We'll listen back to a 1991 interview.
This is FRESH AIR.

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