The World is Flat

ELEVEN: The Unflat World, No Guns or Cell Phones Allowed

On a trip back home to Minnesota in the winter of 2004, I was having lunch with my friends Ken and Jill Greer at Perkins pancake house when Jill mentioned that the state had recently passed a new gun law. The conceal and carry law, passed on May 28, 2003, established that local sheriffs had to issue permits for anyone-other than those with felony records or declared mentally ill-who requested to carry concealed firearms to work (unless the person's employer explicitly restricted that right). This law is supposed to deter criminals, because if they try to hold you up, they can't be sure that you too are not packing a weapon. The law, though, contained a provision to allow business owners to prevent nonemployees from bringing concealed weapons into a place of business, like a restaurant or health club. It said that any business could ban concealed handguns on its premises if it posted a sign at each entrance indicating that guns were not allowed there. (This reportedly led to some very creative signage, with one church suing the state for the right to use a biblical quote as its gun-banning sign and a restaurant using a picture of a woman in a cooking apron toting a machine gun.) The reason this all came up at our lunch was that Jill mentioned that at health clubs around the city, where she played tennis, she noticed two signs now popping up regularly, one right after the other. At their tennis club in Bloomington, for example, there is a sign right by the front door that says, “No Guns Allowed.” And then nearby, outside the locker rooms, is another sign: “No Cell Phones Allowed.”

Hmrara. No guns or cell phones allowed? Guns I understand, I said, but why cell phones?

Silly me. It was because some people were bringing cell phones with cameras into locker rooms, covertly taking pictures of naked men and women and then e-mailing them around the world. What will they think of next? Whatever the innovation, people will find a way to use it and abuse it.

While interviewing Promod Haque at Norwest Venture Partners in Palo Alto, I was helped by the firm's public relations director, Katie Belding, who later sent me this e-mail: “I was chatting with my husband about your meeting with Promod the other day... He is a history teacher at a high school in San Mateo. I asked him, 'Where were you when the world went flat?' He said it just happened the other day at school when he was in a faculty meeting. A student was suspended for helping another student cheat on a test-we're not talking the traditional writing answers on the bottom of your shoe or passing a note, though...” Intrigued, I called her husband, Brian, and he picked up the story: “At the end of the period, when all of the tests were being passed up to the front of the classroom, this student very quickly and slyly pulled out his cell phone and somehow snapped a picture of some test questions, and instantly e-mailed it to his friend who was taking the same test the next period. His friend also had a cell phone with a digital camera and e-mail capabilities and was apparently able to view the questions before the next period. The student was caught by another teacher when he pulled out the cell phone between periods. It is against the rules to have a cell phone on campus-even though we know that all the kids do-so the teacher confiscated it and saw that the kid had a test on it. So the dean of discipline, at our regular faculty meeting, opened by saying, 'We have something new to worry about.' Essentially he said, 'Beware, keep your eyes open, because the kids are so far ahead of us in terms of the technology.'”

But things aren't all bad with this new technology, noted Brian: “I went to a Jimmy Buffett concert earlier this year. Cameras were not allowed, but cell phones were. So then the concert starts and everyone suddenly starts holding up their cell phones and taking pictures of Jimmy Buffett. I've got one right on my wall. We were sitting in the second row and the guy next to us held up his cell phone, and I said, 'Hey, would you mind e-mailing me some of those? No one will believe we sat this close.' He said 'Sure,' and we gave him a card with our e-mail [address]. We didn't really expect to see any, but the next day he e-mailed us a bunch.”

My trip to Beijing described earlier fell right after the fifteenth anniversary of the Tiananmen Square massacre, which happened on June 4, 1989, that is, 6/4/89. My colleagues at the Times bureau informed me that on that day the Chinese government censors were blocking SMS messages on cell phones that contained any reference to Tiananmen Square or even the numbers 6 and 4. So if you happened to be dialing the phone number 664-6464, or sending a message in which you told someone you would meet at 6 p.m. on the 4th floor, the Chinese censors blocked it using their jamming technology.

Mark Steyn, writing in the National Review (October 25, 2004), related a story from the London Arabic newspaper paper Al-Quds al-Arabi about a panic that broke out in Khartoum, Sudan, after a crazy rumor swept the city, claiming that if an infidel shook a man's hand, that man could lose his manhood. “What struck me about the story,” wrote Steyn, “was a detail: The hysteria was spread by cell phones and text messaging. Think about that: You can own a cell phone yet still believe a foreigner's handshake can melt away your penis. What happens when that kind of technologically advanced primitivism advances beyond text messaging?”

This is not a chapter about cell phones, so why do I raise these stories? Because ever since I began writing about globalization, I've been challenged by critics along one particular line: “Isn't there a certain technological determinism to your argument? To listen to you, Friedman, there are these ten flatteners, they are converging and flattening the earth, and there is nothing that people can do but bow to them and join the parade. And after a transition, everyone will get richer and smarter and it will all be fine. But you're wrong, because the history of the world suggests that ideological alternatives, and power alternatives, have always arisen to any system, and globalization will be no different.”

This is a legitimate question, so let me try to answer it directly: I am a technological determinist! Guilty as charged.

I believe that capabilities create intentions. If we create an Internet where people can open an online store and have global suppliers, global customers, and global competitors, they will open that online store or bank or bookshop. If we create work flow platforms that allow companies to disaggregate any job and source it to the knowledge center anywhere in the world that can perform that task most efficiently at the lowest cost, companies will do that sort of outsourcing. If we create cell phones with cameras in them, people will use them for all sorts of tasks, from cheating on tests to calling Grandma in her nursing home on her ninetieth birthday from the top of a mountain in New Zealand. The history of economic development teaches this over and over: If you can do it, you must do it, otherwise your competitors will-and as this book has tried to demonstrate, there is a whole new universe of things that companies, countries, and individuals can and must do to thrive in a flat world.

But while I am a technological determinist, I am not a historical determinist. There is absolutely no guarantee that everyone will use these new technologies, or the triple convergence, for the benefit of themselves, their countries, or humanity. These are just technologies. Using them does not make you modern, smart, moral, wise, fair, or decent. It just makes you able to communicate, compete, and collaborate farther and faster. In the absence of a world-destabilizing war, every one of these technologies will become cheaper, lighter, smaller and more personal, mobile, digital, and virtual. Therefore, more and more people will find more and more ways to use them. We can only hope that more people in more places will use them to create, collaborate, and grow their living standards, not the opposite. But it doesn't have to happen. To put it another way, I don't know how the flattening of the world will come out.

Indeed, this is the point in the book where I have to make a confession: I know that the world is not flat.

Yes, you read me right: I know that the world is not flat. Don't worry. I know.

I am certain, though, that the world has been shrinking and flattening for some time now, and that process has quickened dramatically in recent years. Half the world today is directly or indirectly participating in the flattening process or feeling its effects. I have engaged in literary license in titling this book The World Is Flat to draw attention to this flattening and its quickening pace because I think it is the single most important trend in the world today.

But I am equally certain that it is not historically inevitable that the rest of the world will become flat or that the already flat parts of the world won't get unflattened by war, economic disruption, or politics. There are hundreds of millions of people on this planet who have been left behind by the flattening process or feel overwhelmed by it, and some of them have enough access to the flattening tools to use them against the system, not on its behalf. How the flattening could go wrong is the subject of this chapter, and I approach it by trying to answer the following questions: What are the biggest constituencies, forces, or problems impeding this flattening process, and how might we collaborate better to overcome them?

Too Sick

I once heard Jerry Yang, the cofounder of Yahoo!, quote a senior Chinese government official as saying, “Where people have hope, you have a middle class.” I think this is a very useful insight. The existence of large, stable middle classes around the world is crucial to geopolitical stability, but middle class is a state of mind, not a state of income. That's why a majority of Americans always describe themselves as “middle class,” even though by income statistics some of them wouldn't be considered as such. “Middle class” is another way of describing people who believe that they have a pathway out of poverty or lower-income status toward a higher standard of living and a better future for their kids. You can be in the middle class in your head whether you make $2 a day or $200, if you believe in social mobility-that your kids have a chance to live better than you do-and that hard work and playing by the rules of your society will get you where you want to go.

In many ways, the line between those who are in the flat world and those who are not is this line of hope. The good news in India and China and the countries of the former Soviet Empire today is that, with all their flaws and internal contradictions, these countries are now home to hundreds of millions of people who are hopeful enough to be middle class. The bad news in Africa today, as well as rural India, China, Latin America, and plenty of dark corners of the developed world, is that there are hundreds of millions of people who have no hope and therefore no chance of making it into the middle class. They have no hope for two reasons: Either they are too sick, or their local governments are too broken for them to believe they have a pathway forward.

The first group, those who are too sick, are those whose lives are stalked every day by HIV-AIDS, malaria, TB, and polio, and who do not even enjoy steady electricity or potable water. Many of these people live in shockingly close proximity with the flat world. While in Bangalore I visited an experimental school, Shanti Bhavan, or “Haven of Peace.” It is located near the village of Baliganapalli, in Tamil Nadu Province, about an hour's drive from downtown Bangalore's glass-and-steel high-tech centers-one of which is aptly called “The Golden Enclave.” On the drive there, the school's principal, Lalita Law, an intense, razor-sharp Indian Christian, explained to me, with barely controlled rage in her voice, that the school has 160 children, whose parents are all untouchables from the nearby village.

“These kids, their parents are ragpickers, coolies, and quarry laborers,” she said as we bounced along in a jeep on the potholed roads to the school. “They come from homes below the poverty line, and from the lowest caste, the untouchables, who are supposed to be fulfilling their destiny and left where they are. We get these children at ages four and five. They don't know what it is to have a drink of clean water. They are used to drinking filthy gutter water, if they are lucky enough to have a gutter near where they live. They have never seen a toilet, they don't have baths... They don't even have proper scraps of clothing. We have to start by socializing them. When we first get them they run out and urinate and defecate wherever they want. [At first] we don't make them sleep on beds, because it is a culture shock.”

I was typing frantically in the back of the jeep on my laptop to keep up with her scalding monologue about village life.

“This 'India Shining' thing [the slogan of the ruling Bharatiya Janata Party, BJP, in the 2004 election] irritates people like us,” she added. 'You have to come to the rural villages and see whether India is shining, and you look into a child's face and see whether India is shining. India is shining okay for the glossy magazines, but if you just go outside Bangalore you will see that everything about India shining is refuted... [In the villages] alcoholism is rife and female infanticide and crime are rising. You have to bribe to get electricity, water; you have to bribe the tax assessor to assess your home correctly. Yes, the middle and upper classes are taking off, but the 700 million who are left behind, all they see is gloom and darkness and despair. They are born to fulfill their destiny and have to live this way and die this way. The only thing that shines for them is the sun, and it is hot and unbearable and too many of them die of heatstroke.“ The only ”mouse“ these kids have ever encountered, she added, is not one that rests next to a computer but the real thing.

There are thousands of such villages in rural India, China, Africa, and Latin America. And that is why it is no wonder that children in the developing world-the unflat world-are ten times more likely to die of vaccine-preventable diseases than are children in the developed flat world. In the worst-affected regions of rural southern Africa, a full one-third of pregnant women are reportedly HIV-positive. The AIDS epidemic alone is enough to put a whole society into a tailspin: Many teachers in these African countries are now afflicted with AIDS, so they cannot teach, and young children, especially girls, have to drop out either because they must tend to sick and dying parents or because they have been orphaned by AIDS and cannot afford the school fees. And without education, young people cannot learn how to protect themselves from HIV-AIDS or other diseases, let alone acquire the life-advancing skills that enable women to gain greater control over their own bodies and sexual partners. The prospect of a full-blown AIDS epidemic in India and China, of the sort that has already debilitated southern Africa, remains very real, largely because only one-fifth of the people at risk for HIV worldwide have access to prevention services. Tens of millions of women who want and would benefit from family-planning resources don't have them for lack of local funding. You cannot drive economic growth in a place where 50 percent of the people are infected with malaria or half of the kids are malnourished or a third of the mothers are dying of AIDS.

There is no question that China and India are better off for having at least part of their population in the flat world. When societies begin to prosper, you get a virtuous cycle going: They begin to produce enough food for people to leave the land, the excess labor gets trained and educated, it begins working in services and industry; that leads to innovation and better education and universities, freer markets, economic growth and development, better infrastructure, fewer diseases, and slower population growth. It is that dynamic that is going on in parts of urban India and urban China today, enabling people to compete on a level playing field and attracting investment dollars by the billions.

But there are many, many others living outside this cycle. They live in villages or rural areas that only criminals would want to invest in, regions where violence, civil war, and disease compete with one another to see which can ravage the civilian population most. The world will be entirely flat only when all these people are brought into it. One of the few people with enough dollars to make a difference who has stepped up to this challenge is Microsoft chairman Bill Gates, whose $27 billion Bill and Melinda Gates Foundation has focused on this huge, disease-ravaged, opportunity-deprived population. I have been a critic of some of Microsoft's business practices over the years, and I do not regret one word I have written about some of its anticompetitive tactics. But I have been impressed by Gates's personal commitment of money and energy to address the unflat world. Both times I spoke to Gates, this is the subject he wanted to talk about most and addressed with the most passion.

“No one funds things for that other 3 billion,” said Gates. “Someone estimated that the cost of saving a life in the U.S. is $5 or $6 million— that is how much our society is willing to spend. You can save a life outside of the U.S. for less than $100. But how many people want to make that investment?

“If it was just a matter of time,” Gates continued, “you know, give it twenty or thirty years and the others will be there, then it would be great to declare that the whole world is flat. But the fact is, there is a trap that these 3 billion are caught in, and they may never get into the virtuous cycle of more education, more health, more capitalism, more rule of law, more wealth... I am worried that it could just be half the world that is flat and it stays that way.”

Take malaria, a disease caused by a parasite carried by mosquitoes. It is the greatest killer of mothers on the planet right now. While virtually no one dies of malaria today in the flat world, more than 1 million people die from this disease each year in the unflat world, about seven hundred thousand of them children, most of them in Africa. Deaths from malaria have actually doubled in the last twenty years because mosquitoes have become resistant to many antimalarial drugs, and commercial drug companies have not invested much in new antimalarial vaccines because they believe there is no profitable market for them. If this crisis were happening in a flat country, noted Gates, the system would work: Government would do what it needed to do to contain the disease, pharmaceutical companies would do what they needed to do to get the drugs to market, schools would educate young people about preventive measures, and the problem would be licked. “But this nice response works only when the people who have the problem also have some money,” said Gates. When the Gates Foundation issued a $50 million grant to combat malaria, he added, “people said we just doubled the amount of money [worldwide] going to fight malaria... When the people who have the need don't have the money, it takes outside groups and charities to get them to the point where the system can kick in for them.”

Up to now, though, argued Gates, “we have not given these people a chance [to be in the flat world]. The kid who is connected to the Internet today, if he has the curiosity and an Internet connection, is as [empowered] as me. But if he does not get the right nutrition, he will never play that game. Yes, the world is smaller, but do we really see the conditions that people live in? Isn't the world still really big enough that we don't see the real conditions that people live in, the kid whose life can be saved for $80?”

Let's stop here for a moment and imagine how beneficial it would be for the world, and for America, if rural China, India, and Africa were to grow into little Americas or European Unions in economic and opportunity terms. But the chances of their getting into such a virtuous cycle is tiny without a real humanitarian push by flat-world businesses, philanthropies, and governments to devote more resources to their problems. The only way out is through new ways of collaboration between the flat and unflat parts of the world.

In 2003, the Gates Foundation launched a project called Grand Challenges in Global Health. What I like about it is the way the Gates Foundation approached solving this problem. They didn't say, “We, the rich Western foundation, will now deliver you the solution,” and then issue instructions and write some checks. They said, “Let's collaborate horizontally on defining both the problem and the solutions-let's create value that way-and then [the foundation] will invest our money in the solutions we both define.” So the Gates Foundation placed ads on the Web and in more conventional channels across both the developed and the developing worlds, asking scientists to respond to one big question: What are the biggest problems that, if science attended to them and solved them, could most dramatically change the fate of the several billion people trapped in the vicious cycle of infant mortality, low life expectancy, and disease? The foundation got about eight thousand pages of ideas from hundreds of scientists from around the world, including Nobel laureates. It then culled through them and distilled them down to a list of fourteen Grand Challenges-challenges where a technological innovation could remove a critical barrier to the solving of an important health problem in the developing world. In the fall of 2003, it announced these fourteen Grand Challenges worldwide. They include the following: How to create effective single-dose vaccines that can be used soon after birth, how to prepare vaccines that do not require refrigeration, how to develop needle-free delivery systems for vaccines, how to better understand which immunological responses provide protective immunity, how to better control insects that transmit agents of disease, how to develop a genetic or chemical strategy to incapacitate a disease-transmitting insect population, how to create a full range of optimal bioavailable nutrients in a single staple plant species, and how to create immunological methods that can cure chronic infections. Within a year, the foundation received sixteen hundred proposals for ways to meet these challenges from scientists in seventy-five countries, and the foundation is now in the process of funding the best proposals with $250 million in cash.

“We're trying to accomplish two things with this program,” explained Rick Klausner, a former head of the National Cancer Institute who now runs the global health programs for the Gates Foundation. “The first is [to make] a moral appeal to the scientific imagination, [pointing out] that there are great problems to be solved that we, the scientific community, have ignored, even though we pride ourselves in how international we are. We have not taken our responsibilities as global problem solvers as seriously as our self-identity as an international community. We wanted the Grand Challenges to say these are the most exciting, sexy, scientific things that anyone in the world could work on right now... The idea was to fire the imagination. The second thing is to actually direct some of the foundation's resources to see if we could do it.”

Given the phenomenal advances in technology in the last twenty years, it is easy to assume that we already have all the tools to address some of these challenges and that the only thing lacking is money. I wish that were the case. But it is not. In the instance of malaria, for example, it isn't just the drugs that are missing. As anyone who has visited Africa or rural India knows, the health-care systems in these areas are often broken or functioning at a very low level. So the Gates Foundation is trying to stimulate the development of drugs and delivery systems that presume a broken health-care system and therefore can be safely self-administered by ordinary people in the field. That may be the grandest challenge of all: to use the tools of the flat world to design tools that work in an unflat world. “The most important health-care system in the world is a mother,” said Klausner. “How do you get things in her hands that she understands and can afford and can use?”

The tragedy of all these people is really a dual tragedy, added Klausner. There is the individual tragedy of facing a death sentence from disease or a life sentence of broken families and limited expectations. And there is the tragedy for the world because of the incredible lost contribution that all these people still outside the flat world could be making. In a flat world, where we are connecting all the knowledge pools together, imagine what knowledge those people could bring to science or education. In a flat world, where innovation can come from anywhere, we are letting a huge pool of potential contributors and collaborators slip under the waves. There is no question that poverty causes ill health, but ill health also traps people in poverty, which in turn weakens them and keeps them from grasping the first rung of the ladder to middle-class hope. Until and unless we can meet some of these grand challenges, much of that 50 percent of the world that is still not flat will stay that way-no matter how flat the other 50 percent gets.

Too Dlsempowered

There's not just the flat world and the unflat world. Many people live in the twilight zone between the two. Among these are the people I call the too disempowered. They are a large group of people who have not been fully encompassed by the flattening of the world. Unlike the too sick, who have yet even to get a chance to step onto the flat world, the too disempowered are people who you might say are half flat. They are healthy people who live in countries with significant areas that have been flattened but who don't have the tools or the skills or the infrastructure to participate in any meaningful or sustained way. They have just enough information to know that the world is flattening around them and that they aren't really getting any of the benefits. Being flat is good but full of pressure, being unflat is awful and full of pain, but being half flat has its own special anxiety. As exciting and as visible as the flat Indian high-tech sector is, have no illusions: It accounts for 0.2 percent of employment in India. Add those Indians involved in manufacturing for export, and you get a total of 2 percent of employment in India.

The half flat are all those other hundreds of millions of people, particularly in rural India, rural China, and rural Eastern Europe, who are close enough to see, touch, and occasionally benefit from the flat world but who are not really living inside it themselves. We saw how big and how angry this group can be in the spring of 2004 Indian national elections, in which the ruling BJP was surprisingly tossed out of office-despite having overseen a surge in India's growth rate-largely because of the discontent of rural Indian voters with the slow pace of globalization outside the giant cities. These voters were not saying, “Stop the globalization train, we want to get off.” They were saying, “Stop the globalization train, we want to get on, but someone needs to help us by building a better stepstool.”

These rural voters-peasants and farmers, who form the bulk of India's population—just had to spend a day in any nearby big city to see the benefits of the flat world: the cars, the houses, the educational opportunities. “Every time a villager watches the community TV and sees an ad for soap or shampoo, what they notice are not the soap and shampoo but the lifestyle of the people using them-the kind of motorbikes they ride, their dress, and their homes,” explained Indian-born Nayan Chanda, editor of YaleGlobal Online. “They see a world they want access to. This election was about envy and anger. It was a classic case of revolutions happening when things are getting better but not fast enough for many people.”

At the same time, these rural Indians understood, at gut level, exactly why it was not happening for them: because local governments in India have become so eaten away by corruption and mismanagement that they cannot deliver to the poor the schools and infrastructure they need to get a fair share of the pie. As some of these millions of Indians on the outside of the gated communities looking in lose hope, “they become more religious, more tied to their caste/subcaste, more radical in their thinking, more willing to snatch than create, [and] view dirty politics as being the only way to get mobility, since economic mobility is stalled,” said Vivek Paul of Wipro. India can have the smartest high-tech vanguard in the world, but if it does not find a way to bring along more of those who are unable, disabled, undereducated, and underserved, it will be like a rocket that takes off but quickly falls back to earth for lack of sustained thrust.

The Congress Party got the message, which was why as soon as it took office it chose as its prime minister not some antiglobalizer but Manmohan Singh, the former Indian finance minister, who in 1991 first opened the Indian economy to globalization, placing an emphasis on exports and trade and reform wholesale. And Singh, in turn, pledged himself to vastly increase government investments in rural infrastructure and to bring more reform retail to rural government.

How can outsiders collaborate in this process? I think, first and foremost, they can redefine the meaning of global populism. If populists really want to help the rural poor, the way to do it is not by burning down McDonald's and shutting down the IMF and trying to put up protectionist barriers that will unflatten the world. That will help the rural poor not one iota. It has to be by refocusing the energies of the global populist movement on how to improve local government, infrastructure, and education in places like rural India and China, so the populations there can acquire the tools to collaborate and participate in the flat world. The global populist movement, better known as the antiglobalization movement, has a great deal of energy, but up to now it has been too divided and confused to effectively help the poor in any meaningful or sustained manner. It needs a policy lobotomy. The world's poor do not resent the rich anywhere nearly as much as the left-wing parties in the developed world imagine. What they resent is not having any pathway to get rich and to join the flat world and cross that line into the middle class that Jerry Yang spoke about.

Let's pause for a minute here and trace how the antiglobalization movement lost touch with the true aspirations of the world's poor. The antiglobalization movement emerged at the World Trade Organization conference in Seattle in 1999 and then spread around the world in subsequent years, usually gathering to attack meetings of the World Bank, the IMF, and the G-8 industrialized nations. From its origins, the movement that emerged in Seattle was a primarily Western-driven phenomenon, which was why you saw so few people of color in the crowds. It was driven by five disparate forces. One was upper-middle-class American liberal guilt at the incredible wealth and power that America had amassed in the wake of the fall of the Berlin Wall and the dot-com boom. At the peak of the stock market boom, lots of pampered American college kids, wearing their branded clothing, began to get interested in sweatshops as a way of expiating their guilt. The second force driving it was a rear-guard push by the Old Left-socialists, anarchists, and Trotskyites-in alliance with protectionist trade unions. Their strategy was to piggyback on rising concerns about globalization to bring back some form of socialism, even though these ideas had been rejected as bankrupt by the very people in the former Soviet Empire and China who had lived under them longest. (Now you know why there was no antiglobalization movement to speak of in Russia, China, or Eastern Europe.) These Old Left forces wanted to spark a debate about whether we globalize. They claimed to speak in the name of the Third World poor, but the bankrupt economic policies they advocated made them, in my view, the Coalition to Keep Poor People Poor. The third force was a more amorphous group. It was made up of many people who gave passive support to the antiglobalization movement from many countries, because they saw in it some kind of protest against the speed at which the old world was disappearing and becoming flat.

The fourth force driving the movement, which was particularly strong in Europe and in the Islamic world, was anti-Americanism. The disparity between American economic and political power and everybody else's had grown so wide after the fall of the Soviet Empire that America began to-or was perceived to-touch people's lives around the planet, directly or indirectly, more than their own governments did. As people around the world began to intuit this, a movement emerged, which Seattle both reflected and helped to catalyze, whereby people said, in effect, “If America is now touching my life directly or indirectly more than my own government, then I want to have a vote in America's power.” At the time of Seattle, the “touching” that people were most concerned with was from American economic and cultural power, and therefore the demand for a vote tended to focus around economic rule-making institutions like the World Trade Organization. America in the 1990s, under President Clinton, was perceived as a big dumb dragon, pushing people around in the economic and cultural spheres, knowingly and unknowingly. We were Puff the Magic Dragon, and people wanted a vote in what we were puffing.

Then came 9/11. And America transformed itself from Puff the Magic Dragon, touching people around the world economically and culturally, into Godzilla with an arrow in his shoulder, spitting fire and tossing around his tail wildly, touching people's lives in military and security terms, not just economic and cultural ones. As that happened, people in the world began to say, “Now we really want a vote in how America wields its power”-and in many ways the whole Iraq war debate was a surrogate debate about that.

Finally, the fifth force in this movement was a coalition of very serious, well-meaning, and constructive groups-from environmentalists to trade activists to NGOs concerned with governance-who became part of the populist antiglobalization movement in the 1990s in the hopes that they could catalyze a global discussion about how we globalize. I had a lot of respect and sympathy for this latter group. But in the end they got drowned out by the whether-we-globalize crowd, which began to turn the movement more violent at the July 2001 Genoa G-8 summit, when an antiglobalization protester was killed while attacking an Italian police jeep with a fire extinguisher.

The combination of the triple convergence, the violence at Genoa, 9/11, and tighter security measures fractured the antiglobalization movement. The more serious how-we-globalize groups did not want to be in the same trench with anarchists out to provoke a public clash with police, and after 9/11, many American labor groups did not want to be associated with a movement that appeared to be taken over by anti-American elements. This became even more pronounced when in late September 2001, three weeks after 9/11, antiglobalization leaders attempted a rerun of Genoa in the streets of Washington, to protest the IMF and World Bank meetings there. After 9/11, though, the IMF and World Bank canceled their meetings, and many American protesters shied away. Those who did turn up in the streets of Washington turned the event into a march against the imminent American invasion of Afghanistan to remove Osama bin Laden and al-Qaeda. At the same time, with the triple convergence making the Chinese, Indians, and Eastern Europeans some of the biggest beneficiaries of globalization, it was no longer possible to claim that this phenomenon was devastating the world's poor. Just the opposite: Millions of Chinese and Indians were entering the world's middle class thanks to the flattening of the world and globalization.

So as the how-we-globalize forces drifted away, and as the number of Third World people benefiting from globalization began to grow, and as America under the Bush administration began to exercise more unilateral military power, the anti-American element in the antiglobalization movement began to assume a much louder voice and role. As a result, the movement itself became both more anti-American and more unable and unwilling to play any constructive role in shaping the global debate on how we globalize, precisely when such a role has become even more important as the world has gotten flatter. As Hebrew University political theorist Yaron Ezrahi so aptly noted, “The important task of enlisting the people's power to influence globalism-making it more compassionate, fair, and compatible with human dignity-is way too important to be wasted on crass anti-Americanism or left in the hands of only anti-Americans.”

There is a huge political vacuum now waiting to be filled. There is a real role today for a movement that could advance the agenda of how we globalize-not whether we globalize. The best place such a movement could start is rural India.

“Both the Congress [Party] and its left allies would be risking India's future if they draw the wrong conclusion from this [2004] election,” Pratap Bhanu Mehta, who heads the Center for Policy Research in Delhi, wrote in The Hindu newspaper. “This is not a revolt against the market, it is a protest against the state; this is not resentment against the gains of liberalization, but a call for the state to put its house in order through even more reform... The revolt against holders of power is not a revolt of the poor against the rich: ordinary people are far less prone to resent other people's success than intellectuals suppose. It is rather an expression of the fact that the reform of the state has not gone far enough.”

This is why the most important forces righting poverty in India today, in my view, are those NGOs righting for better local governance, using the Internet and other modern tools of the flat world to put a spotlight on corruption, mismanagement, and tax avoidance. The most important, effective, and meaningful populists in the world today are not those handing out money. They are those with an agenda to drive reform retail at the local level in their countries-to make it easier for the little man or woman to register his or her land, even if they are squatters; to start a business, no matter how small; and to get minimal justice from the legal system. Modern populism, to be effective and meaningful, should be about reform retail -making globalization workable, sustainable, and fair for more people by improving their local governance, so that the money that has already been earmarked for the poor actually gets to them and so that their natural entrepreneurship can get unlocked. It is through local government that people plug into the system and get to enjoy the benefits of the flattening world rather than just observe them. The average Indian villagers cannot be like the Indian high-tech companies and just circumvent the government by supplying their own electricity, their own water resources, their own security, their own bus system, and their own satellite dishes. They need the state for that. The market cannot be counted on to make up for the failure of the state to deliver decent governance. The state has to get better. Precisely because the Indian state opted for a globalization strategy in 1991 and abandoned fifty years of socialism-which had brought its foreign reserves to near zero-New Delhi had reserves in 2004 of $100 billion, giving it the resources to help more of its people into the flat arena.

Ramesh Ramanathan, an Indian-born former Citibank executive who returned to India to lead an NGO called Janaagraha, dedicated to improving local governance, is precisely the kind of new populist I have in mind. “In India,” he said, “clients of public education are sending a signal about the quality of service delivery: Whoever can afford to opt out does so. The same goes for health care. Given the escalating costs of health care, if we had a solid public health-care system, most citizens would opt to use it, not just the poor. Ditto for roads, highways, water supply, sanitation, registration of births and deaths, crematoria, driver's licenses, and so on. Wherever the government provides these services, it [should be] for the benefit of all citizens. [But] in fact, in some of these, like water supply and sanitation, the poor are actually not even getting the same basic services as the middle class and the rich. The challenge here is therefore universal access.” Getting NGOs that can collaborate on the local level to ensure that the poor get the infrastructure and budgets to which they are entitled could have a major impact on poverty alleviation.

So although this may sound odd coming from me, it is totally consistent with this whole book: What the world doesn't need now is for the antiglobalization movement to go away. We just need it to grow up. This movement had a lot of energy and a lot of mobilizing capacity. What it lacked was a coherent agenda for assisting the poor by collaborating with them in a way that could actually help them. The activist groups that are helping alleviate poverty the most are those working at the local village level in places like rural India, Africa, and China to spotlight and fight corruption and to promote accountability, transparency, education, and property rights. You don't help the world's poor by dressing up in a turtle outfit and throwing a stone through McDonald's window. You help them by getting them the tools and institutions to help themselves. It may not be as sexy as protesting against world leaders in the streets of Washington and Genoa, and getting lots of attention on CNN, but it is a lot more important. Just ask any Indian villager.

Collaboration in poverty alleviation is not just for NGOs. It is also for multinational corporations. The rural poor in India, Africa, and China represent a huge market, and it is possible to make money there and serve them -if companies are ready to collaborate horizontally with the poor. One of the most interesting examples I have come across of this form of collaboration is a program run by Hewlett-Packard. HP is not an NGO. HP began with a simple question: What do poor people need most that we could sell to them? You cannot design this stuff in Palo Alto; you have to cocreate with the user-customer beneficiary. In order to answer that question, HP created a public-private partnership with the national government in India and the local government in Andhra Pradesh. Then a group of HP technologists convened a series of dialogues in the farming village of Kuppam. It asked residents two things: What are your hopes for the next three to five years? and What changes would really make your lives better? To help the villagers (many of them illiterate) express themselves, HP used a concept called graphic facilitation, whereby when people voiced their dreams and aspirations, a visual artist whom HP brought over from the United States drew images of those aspirations on craft paper put up on the walls around the room.

“When people, particularly people who are illiterate, say something and it gets immediately represented on the wall, they feel really validated, and therefore they get more animated and more engaged,” said Maureen Conway, HP's vice president for emerging market solutions, who headed the project. “It raises self-esteem.” Once these poor farmers living in a remote village got loose, they really started aspiring. “One of them said, 'What we really need here is an airport,'” said Conway.

After the visioning sessions were complete, HP employees spent more time in the village just observing how people lived. One technological thing missing in their lives was photography. Conway explained: “We noticed that there was a big demand for having pictures taken for identification purposes, for licenses, for applications and government permits, and we said to ourselves, 'Maybe there is an entrepreneurial opportunity here if we can turn people into village photographers.' There was one photo studio in downtown Kuppam. Everyone around [is] farmers. We noticed that people would come back in from villages on a bus, spend two hours, get their pictures taken, come back a week later for the pictures, and find out that they were not done or done wrong. Time is as important for them as for us. So we said, 'Wait a minute, we make digital cameras and portable printers. So what is the problem?' Why doesn't HP sell them a bunch of digital cameras and printers? The villagers came back with a very short answer: 'Electricity.' They had no assured supply of electricity and little money to pay for it.

“So we said, 'We are technologists. Let's get a solar panel and put it on a backpack on wheels and see if there is a business for people here, and for HP, if we make a mobile photo studio.' That is the approach we took. The solar panel can charge both the camera and the printer. Then we went to a self-help women's group. We picked five women and said,

'We will train you how to use this equipment.' We gave them two weeks of training. And we said, 'We will provide you with the camera and supplies, and we will share revenue with you on every picture.'“ This was not charity. Even after buying all their supplies from HP and sharing some of the revenue with HP, the women in the photography group doubled their family incomes. ”And to be honest, what we found out was that less than 50 percent of the pictures they took were for identification pictures and the rest were people just wanting pictures of their kids, weddings, and themselves,“ said Conway. The poor like family photo albums as much as the rich and are ready to pay for them. The local government also made this women's group its official photographers for public works projects, which added to their income.

End of story? Not quite. As I said, HP is not an NGO. “After four months we said, 'Okay, the experiment is over, we're taking the camera back,'” said Conway. “And they said, 'You're crazy.'” So HP told the women that if they wanted to keep the camera, printer, and solar panel, they had to come up with a plan to pay for them. They eventually proposed renting them for $9 a month, and HP agreed. And now they are branching out into other villages. HP, meanwhile, has started working with an NGO to train multiple women's groups with the same mobile photography studio, and there is a potential here for HP to sell the studios to NGOs all over India, with all of them using HP ink and other supplies. And from India, who knows where?

“They are giving us feedback on the cameras and ease of use,” said Conway. “What it has done to change the confidence of the women is absolutely amazing.”

Too Frustrated

One of the unintended consequences of the flat world is that it puts different societies and cultures in much greater direct contact with one another. It connects people to people much faster than people and cultures can often prepare themselves. Some cultures thrive on the sudden opportunities for collaboration that this global intimacy makes possible. Others are threatened, frustrated, and even humiliated by this close contact, which, among other things, makes it very easy for people to see where they stand in the world vis-a-vis everyone else. All of this helps to explain the emergence of one of the most dangerous unflattening forces today-the suicide bombers of al-Qaeda and the other Islamist terror organizations, who are coming out of the Muslim world and Muslim communities in Europe.

The Arab-Muslim world is a vast, diverse civilization, encompassing over one billion people and stretching from Morocco to Indonesia and from Nigeria all the way to the suburbs of London. It is very dangerous to generalize about such a complex religious community, made up of so many different ethnicities and nationalities. But one need only look at the headlines in any day's newspaper to appreciate that a lot of anger and frustration seems to be bubbling over from the Muslim world in general and from the Arab-Muslim world in particular, where many young people seem to be agitated by a combination of issues. One of the most obvious is the festering Arab-Israeli conflict, and the Israeli occupation of Palestinian land and East Jerusalem—a grievance which has a powerful emotional hold on the Arab-Muslim imagination and has long soured relations with America and the West.

But this is not the only reason for the brewing anger in these communities. This anger also has to do with the frustration of Arabs and Muslims at having to live, in many, many cases, under authoritarian governments, which not only deprive their people of a voice in their own future, but have deprived tens of millions of young people in particular of opportunities to achieve their full potential through good jobs and modern schools. The fact that the flat world enables people to so easily compare their circumstances with others only sharpens their frustrations.

Some of these Arab-Muslim young men and women have chosen to emigrate in order to find opportunities in the West; others have chosen to suffer in silence at home, hoping for some kind of change. The most powerful journalistic experiences I have had since 9/11 have been my encounters in the Arab world with some of these young people. Because my column with my picture runs in Arabic in the leading pan-Arab newspaper, the London-based Al-Sharq Al-Awsat, and because I often appear on Arab satellite-television news programs, many people in that part of the world know what I look like. I have been amazed by the number of young Arabs and Muslims-men and women-who have come up to me on the streets of Cairo or in the Arabian Gulf since 9/11, and said to me what one young man in Al-Azhar mosque did one Friday, after noon prayer: “You're Friedman, aren't you?”

I nodded yes.

“Keep writing what you're writing,” he said. And what he meant was writing about the importance of bringing more freedom of thought, expression, and opportunity to the Arab-Muslim world, so its young people can realize their potential.

Unfortunately, though, these progressive young people are not the ones defining the relationship betweeen the Arab-Muslim community and the world at large today. Increasingly, that relationship is being dominated by, and defined by, religious militants and extremists, who give vent to the frustrations in that part of the world by simply lashing out. The question that I want to explore in this section is: What produced this violent Islamist fringe, and why has it found so much passive support in the Arab-Muslim world today-even though, I am convinced, the vast majority there do not share the violent agenda of these groups or their apocalyptic visions?

The question is relevant to a book about the flat world for a very simple reason: Should there be another attack on the United States of the magnitude of 9/11, or worse, walls would go up everywhere and the flattening of the world would be set back for a long, long time.

That, of course, is precisely what the Islamists want.

When Muslim radicals and fundamentalists look at the West, they see only the openness that makes us, in their eyes, decadent and promiscuous. They see only the openness that has produced Britney Spears and Janet Jackson. They do not see, and do not want to see, the openness— the freedom of thought and inquiry-that has made us powerful, the openness that has produced Bill Gates and Sally Ride. They deliberately define it all as decadence. Because if openness, women's empowerment, and freedom of thought and inquiry are the real sources of the West's economic strength, then the Arab-Muslim world would have to change. And the fundamentalists and extremists do not want to change.

To beat back the threat of openness, the Muslim extremists have, quite deliberately, chosen to attack the very thing that keeps open societies open, innovating, and flattening, and that is trust. When terrorists take instruments from our daily lives-the car, the airplane, the tennis shoe, the cell phone-and turn them into weapons of indiscriminate violence, they reduce trust. We trust when we park our car downtown in the morning that the car next to it is not going to blow up; we trust when we go to Disney World that the man in the Mickey Mouse outfit is not wearing a bomb-laden vest underneath; we trust when we get on the shuttle flight from Boston to New York that the foreign student seated next to us isn't going to blow up his tennis shoes. Without trust, there is no open society, because there are not enough police to patrol every opening in an open society. Without trust, there can also be no flat world, because it is trust that allows us to take down walls, remove barriers, and eliminate friction at borders. Trust is essential for a flat world, where you have supply chains involving ten, a hundred, or a thousand people, most of whom have never met face-to-face. The more open societies are exposed to indiscriminate terrorism, the more trust is removed, and the more open societies will erect walls and dig moats instead.

The founders of al-Qaeda are not religious fundamentalists per se. That is, they are not focused simply on the relationship between themselves and God, and on the values and cultural norms of the religious community. They are a political phenomenon more than a religious one. I like to call them Islamo-Leninists. I use the term “Leninists” to convey the utopian-totalitarian vision of al-Qaeda as well its self-image. As al-Qaeda's chief ideologist, Ayman al-Zawahiri, has put it, al-Qaeda is the ideological vanguard, whose attacks on the United States and other Western targets are designed to mobilize and energize the Muslim masses to rise up against their own corrupt rulers, who are propped up by America. Like all good Leninists, the Islamo-Leninists are certain that the Muslim masses are deeply dissatisfied with their lot and that one or two spectacular acts of jihad against the “pillars of tyranny” in the West will spark them to overthrow the secularizing, immoral, and unjust Arab-Muslim regimes that have defiled Islam. In their place, the Islamo-Leninists, however, do not want to establish a workers' paradise but rather a religious paradise. They vow to establish an Islamic state across the same territory that Islam ruled over at its height, led by a caliph, a supreme religious-political leader, who would unite all the Muslim peoples into a single community.

Islamo-Leninism, in many ways, emerged from the same historical context as the radical European ideologies of the nineteenth and twentieth centuries. Fascism and Marxist-Leninism grew out of the rapid industrialization and modernization of Germany and Central Europe, where communities living in tightly bonded villages and extended families suddenly got shattered and the sons and fathers went off to the urban areas to work for big industrial companies. In this age of transitions, young men in particular lost a sense of identity, rootedness, and personal dignity that had been provided by traditional social structures. In that vacuum, along came Hitler, Lenin, and Mussolini, who told these young men that they had an answer for their feelings of dislocation and humiliation: You may not be in the village or small town anymore, but you are still proud, dignified members of a larger community-the working class, or the Aryan nation.

Bin Laden offered the same sort of ideological response for young Arabs and Muslims. The first person to recognize the Islamo-Leninist character of these 9/11 hijackers-that they were not fundamentalists but adherents of an extreme, violent political cult-was Adrian Karatnycky, the president of Freedom House. In a November 5, 2001, article in the National Review, titled “Under Our Very Noses,” Karatnycky makes the following argument: “The key hijackers... were well-educated children of privilege. None of them suffered first-hand economic privation or political oppression.” And none of them seem to have been raised in a particularly fundamentalist household. Indeed, the top 9/11 operatives and pilots, like Mohammed Atta and Marwan al-Shehhi, who shared an apartment in Hamburg, where they both attended the Technical University of Hamburg-Harburg, all seem to have been recruited to al-Qaeda through cells and prayer groups-after they moved to Europe.

None of these plotters was recruited in the Middle East and then planted in Europe years in advance by bin Laden, notes Karatnycky. To the contrary, virtually all of them seem to have lived in Europe on their own, grown alienated from the European society around them, gravitated to a local prayer group or mosque to find warmth and solidarity, undergone a “born-again” conversion, gotten radicalized by Islamist elements, gone off for training in Afghanistan, and presto, a terrorist was born. Their discovery of religion was not just part of a personal search for meaning. It went far beyond fundamentalism. They converted Islam into a political ideology, a religious totalitarianism. Had the 9/11 hijackers been students at Berkeley in the early 1970's, they would have been Trotskyite radicals. “To understand the September 11 terrorists, we should have in mind the profile of the classic revolutionary: deracinated, middle class, shaped in part by exile. In other words, the image of Lenin in Zurich; or of Pol Pot or Ho Chi Minh in Paris... For them Islamism is the new universal revolutionary creed, and bin Laden is Sheikh Guevara,” writes Karatnycky. “Like the leaders of America's Weather Underground, Germany's Baader-Meinhof Gang, Italy's Red Brigades, and Japan's Red Army Faction, the Islamic terrorists were university-educated converts to an all-encompassing neo-totalitarian ideology.”

My friend Abdallah Schleifer, a journalism professor in Cairo, actually knew Ayman al-Zawahiri, bin Laden's number two and chief ideologue, when al-Zawahiri was a young doctor on his way to becoming a young neo-Leninist Muslim revolutionary. “Ayman was attracted from the time he was a teenager into a Utopian vision of an Islamic state,” Schleifer told me on a visit to Cairo. But instead of being drawn to the traditional concern of religion-the relationship between oneself and God-al-Zawahiri became drawn to religion as a political ideology. Like a good Marxist or Leninist, al-Zawahiri was interested in “building the Kingdom of God on earth,” said Schleifer, and Islamism became his Marxism-his “utopian ideology.” And where Mohammed Atta meets al-Zawahiri is the intersection where rage and humiliation meet the ideology that is going to make it all right. “Ayman is saying to someone like Mohammed Atta, 'You see injustice? We have a system-a system, mind you, a system-that will give you [justice], not a religion, because religion gives you inner peace.' It doesn't necessarily solve any social problem. But [al-Zawahiri] is saying we have a system that will give you justice. You feel frustration? We have a system that will enable you to flower. The system is what we call Islamism-an ideological, highly politicized Islam, in which the spiritual content-the personal relationship [with God]—is taken out of Islam and instead it is transformed into a religious ideology like fascism or communism.” But unlike the Leninists, who wanted to install the reign of the perfect class, the working class, and unlike Nazis, who wanted to install the reign of the perfect race, the Aryan race, bin Laden and al-Zawahiri wanted to install the reign of the perfect religion.

Unfortunately, bin Laden and his colleagues have found it all too easy to enlist recruits in the Arab-Muslim world. I think this has to do, in part, with the state of half-flatness that many Arab-Muslim young people are living in, particularly those in Europe. They have been raised to believe that Islam is the most perfect and complete expression of God's monotheistic message and that the Prophet Muhammed is God's last and most perfect messenger. This is not a criticism. This is Islam's self-identity. Yet, in a flat world, these youth, particularly those living in Europe, can and do look around and see that the Arab-Muslim world, in too many cases, has fallen behind the rest of the planet. It is not living as prosperously or democratically as other civilizations. How can that be? these young Arabs and Muslims must ask themselves. If we have the superior faith, and if our faith is all encompassing of religion, politics, and economics, why are others living so much better?

This is a source of real cognitive dissonance for many Arab-Muslim youth-the sort of dissonance, and loss of self-esteem, that sparks rage, and leads some of them to join violent groups and lash out at the world. It is also the sort of dissonance that leads many others, average folks, to give radical groups like al-Qaeda passive support. Again, the flattening of the world only sharpens that dissonance by making the backwardness of the Arab-Muslim region, compared to others, impossible to ignore. It has become so impossible to ignore that some Arab-Muslim intellectuals have started to point out this backwardness with brutal honesty and to demand solutions. They do this in defiance of their authoritarian governments, who prefer to use their media not to encourage honest debate, but rather to blame all their problems on others-on America, on Israel, or on a legacy of Western colonialism-on anything and anyone but the dead hand of these authoritarian regimes.

According to the second Arab Human Development Report, which was written in 2003 for the United Nations Development Program by a group of courageous Arab social scientists, between 1980 and 1999, Arab countries produced 171 international patents. South Korea alone during that same period registered 16,328 patents. Hewlett-Packard registers, on average, 11 new patents a day. The average number of scientists and engineers working in research and development in the Arab countries is 371 per million people, while the world average, including countries in Africa, Asia, and Latin America, is 979, the report said. This helps to explain why although massive amounts of foreign technology are imported to the Arab regions, very little of it is internalized or supplanted by Arab innovations. Between 1995 and 1996, as many as 25 percent of the university graduates produced in the Arab world immigrated to some Western country. There are just 18 computers per 1,000 people in the Arab region today, compared with the global average of 78.3 per 1,000, and only 1.6 percent of the Arab population has Internet access. While Arabs represent almost 5 percent of the world population, the report said, they produce only 1 percent of the books published, and an unusually high percentage of those are religious books-over triple the world average. Of the 88 million unemployed males between fifteen and twenty-four worldwide, almost 26 percent are in the Middle East and North Africa, according to an International Labor Organization study (Associated Press, December 26, 2004).

The same study said the total population of Arab countries quadrupled in the past fifty years, to almost 300 million, with 37.5 percent under fifteen, and 3 million coming onto the job market every year. But the good jobs are not being produced at home, because the environment of openness required to attract international investment and stimulate local innovation is all too rare in the Arab-Muslim world today. That virtuous cycle of universities spinning off people and ideas, and then those people and ideas getting funded and creating new jobs, simply does not exist there. Theodore Dalrymple is a physician and psychiatrist who practices in England and writes a column for the London Spectator. He wrote an essay in City journal, the urban policy magazine (Spring 2004), about what he learned from his contacts with Muslim youth in British prisons. Dalrymple noted that most schools of Islam today treat the Qu'ran as a divinely inspired text that is not open to any literary criticism or creative reinterpretation. It is a sacred book to be memorized, not adapted to the demands and opportunities of modern life. But without a culture that encourages, and creates space for, such creative reinterpretation, critical thought and original thinking tend to whither. This may explain why so few world-class scientific papers cited by other scholars come out of the Arab-Muslim universities.

If the West had made Shakespeare “the sole object of our study and the sole guide of our lives,” said Dalrymple, “we would soon enough fall into backwardness and stagnation. And the problem is that so many Muslims want both stagnation and power: they want a return to the perfection of the seventh century and to dominate the twenty-first, as they believe is the birthright of their doctrine, the last testament of God to man. If they were content to exist in a seventh-century backwater, secure in a quietist philosophy, there would be no problem for them or us; their problem, and ours, is that they want the power that free inquiry confers, without either the free inquiry or the philosophy and institutions that guarantee that free inquiry. They are faced with a dilemma: either they abandon their cherished religion, or they remain forever in the rear of human technical advance. Neither alternative is very appealing, and the tension between their desire for power and success in the modern world on the one hand, and their desire not to abandon their religion on the other, is resolvable for some only by exploding themselves as bombs. People grow angry when faced with an intractable dilemma; they lash out.”

Indeed, talk to young Arabs and Muslims anywhere, and this cognitive dissonance and the word “humiliation” always come up very quickly in conversation. It was revealing that when Mahathir Mohammed made his October 16, 2003, farewell speech as prime minister of Malaysia at an Islamic summit he was hosting in his own country, he built his remarks to his fellow Muslim leaders around the question of why their civilization had become so humiliated-a term he used five times. “I will not enumerate the instances of our humiliation,” said Mahathir. “Our only reaction is to become more and more angry. Angry people cannot think properly. There is a feeling of hopelessness among the Muslim countries and their people. They feel they can do nothing right...”

This humiliation is the key. It has always been my view that terrorism is not spawned by the poverty of money. It is spawned by the poverty of dignity. Humiliation is the most underestimated force in international relations and in human relations. It is when people or nations are humiliated that they really lash out and engage in extreme violence. When you take the economic and political backwardness of much of the Arab-Muslim world today, add its past grandeur and self-image of religious superiority, and combine it with the discrimination and alienation these Arab-Muslim males face when they leave home and move to Europe, or when they grow up in Europe, you have one powerful cocktail of rage. As my friend the Egyptian playwright Ali Salem said of the 9/11 hijackers, they “are walking the streets of life, searching for tall buildings-for towers to bring down, because they are not able to be tall like them.”

I fear that this sense of frustration that feeds recruits to bin Laden may get worse before it gets better. In the old days, leaders could count on walls and mountains and valleys to obstruct their people's view and keep them ignorant and passive about where they stood in comparison to others. You could see only to the next village. But as the world gets flatter, people can see for miles and miles.

In the flat world you get your humiliation dished up to you fiber-optically. I stumbled across a fascinating example of this involving bin Laden himself. On January 4, 2004, bin Laden issued one of his taped messages through al-Jazeera, the satellite television network based in Qatar. On March 7, the Web site of the Islamic Studies and Research Center published the entire text. One paragraph jumped out at me. It is in the middle of a section in which bin Laden is discussing the various evils of Arab rulers, particularly the Saudi ruling family.

“Thus, the situation of all Arab countries suffers from great deterioration in all walks of life, in religious and worldly matters,” says bin Laden.

“It is enough to know that the economy of all Arab countries is weaker than the economy of one country that had once been part of our [Islamic] world when we used to truly adhere to Islam. That country is the lost Andalusia. Spain is an infidel country, but its economy is stronger than our economy because the ruler there is accountable. In our countries, there is no accountability or punishment, but there is only obedience to the rulers and prayers of long life for them.”

The hair on my arms stood up when I read that. Why? Because what bin Laden was referring to was the first Arab Human Development Report, which came out in July 2002, well after he had been evicted from Afghanistan and was probably hiding out in a cave somewhere. The Arab authors of the report wanted to grab the attention of the Arab world as to how far behind it had fallen. So they looked for a country that had a GDP slightly more than that of all twenty-two Arab states combined. When they ran down the tables, the country that fit that bill perfectly was Spain. It could have been Norway or Italy, but Spain happened to have a GDP just slightly larger than all the Arab states together. Somehow, bin Laden heard or read about this first Arab Human Development Report from his cave. For all I know, he may have read my own column about it, which was the first to highlight the report and stressed the comparison with Spain. Or maybe he got it off the Internet. The report was downloaded from the Internet some 1 million times. So even though he was off in a cave somewhere, he could still get this report, and its humiliating conclusion, shoved right in his face-negatively comparing the Arab states to Spain, no less! And when he heard that comparison, wherever he was hiding, bin Laden took it as an insult, as a humiliation-the notion that Christian Spain, a country that was once controlled by Muslims, had a greater GDP today than all the Arab states combined. The authors of this report were themselves Arabs and Muslims; they were not trying to humiliate anyone-but that was how bin Laden interpreted it. And I am certain he got this dose of humiliation over a modem at 56K. They may even have broadband now in Tora Bora.

And having gotten his dose of humiliation this way, bin Laden and his emulators have learned to give it right back in the same coin. Want to understand why the Islamo-Leninists behead Americans in Iraq and Saudi Arabia and then distribute pictures on the Internet with the bloody head of the body resting on the headless corpse? It is because there is no more humiliating form of execution than chopping off someone's head. It is a way of showing utter contempt for that person and his or her physical being. It is no accident that the groups in Iraq who beheaded Americans dressed them first in the same orange jumpsuits that al-Qaeda prisoners in Guantanamo Bay are forced to wear. They had to learn about those jumpsuits either over the Internet or satellite TV. But it amazes me that in the middle of the Iraq war they were able to have the exact same jumpsuits made in Iraq to dress their prisoners in. You humiliate me, I humiliate you. And what do you suppose terrorist leader Abu Musab al-Zarqawi said in his audiotape released on September 11, 2004, the third anniversary of 9/11? He said, “The holy warriors made the international coalition taste humiliation... lessons from which they are still burning.” The tape was titled “Where Is the Honor?”

As I said, however, this frustration and humiliation is not confined to the Islamist fringes. The reason why the Islamo-Leninists have become the most energized and pronounced opponents of globalization/ Americanization and the biggest threat to the flattening of the world today is not simply their extraordinary violence, but also because they enjoy some passive support around the Arab-Muslim world.

In part, this is because most governments in the Arab-Muslim world have refused to take on these radicals in a war of ideas. While Arab regimes have been very active in jailing their Islamo-Leninists when they can find and arrest them, they have been very passive in countering them with a modern, progressive interpretation of Islam. This is because almost all of these Arab-Muslim leaders are illegitimate themselves. Having come to power by force, they have no credibility as carriers of a moderate, progressive Islam, and they always feel vulnerable to hard-line Muslim preachers, who denounce them for not being good Muslims. So instead of taking on the Muslim radicals, the Arab regimes either throw them in jail or try to buy them off. This leaves a terrible spiritual and political void.

But the other reason for the passive support that the Islamo-Leninists enjoy-and the fact that they are able to raise so much money through charities and mosques in the Arab-Muslim world-is that too many good decent people there feel the same frustration and tinge of humiliation that many of their most enraged youth do. And there is a certain respect for the way these violent youth have been ready to stand up to the world and to their own leaders and defend the honor of their civilization. When I visited Qatar a few months after 9/11, a friend of mine there-a sweet, thoughtful, liberal person who works for the Qatari government— confided to me something in a whisper that was deeply troubling to him: “My eleven-year-old son thinks bin Laden is a good man.”

Most middle-class Arabs and Muslims, I am convinced, were not celebrating the death of three thousand innocent Americans on 9/11. I know my Arab and Muslim friends were not. But many Arabs and Muslims were celebrating the idea of putting a fist in America's face— and they were quietly applauding the men who did it. They were happy to see someone humiliating the people and the country that they felt was humiliating them and supporting what they saw as injustice in their world-whether it is America's backing of Arab kings and dictators who export oil to it or America's backing of Israel whether it does the right things or the wrong things.

Most American blacks, I am sure, had little doubt that O. J. Simpson murdered his ex-wife, but they applauded his acquittal as a stick in the eye of the Los Angeles Police Department and a justice system that they saw as consistently humiliating and unfair to them. Humiliation does that to people. Bin Laden is to the Arab masses what O.J. was to many American blacks-the stick they poke in the eye of an “unfair” America and their own leaders. I once interviewed Dyab Abou Jahjah, often called the Malcolm X of Belgium's alienated Moroccan youth. I asked him what he and his friends thought when they saw the World Trade Center being smashed. He said, “I think if we are honest with ourselves, most of the Muslims all over the world felt that... America got hit in the face and that cannot be bad. I don't want to make an intellectual answer for that. I'll give it very simply. America was kicking our butts for fifty years. And really badly. Supporting the bullies in the region, whether it is Israel or our own regimes, [America] is giving us not only a bleeding nose, but breaking a lot of our necks.”

Just as America's economic depression in the 1920s and 1930s made many normal, intelligent, thinking Americans passive or active supporters of communism, so the humiliating economic, military, and emotional depression of the Arab-Muslim world has made too many normal, intelligent, and thinking Arabs and Muslims passive supporters of bin Ladenism.

Former Kuwaiti minister of information Dr. Sa'd Bin Tefla, a journalist, wrote an essay in the London Arabic daily Al-Sharq Al-Awsat on the third anniversary of September 11 titled “We Are All Bin Laden,” which went right to this point. He asked why it is that Muslim scholars and clerics eagerly supported fatwas condemning Salman Rushdie to death for writing an allegedly blasphemous novel, The Satanic Verses, that wove in themes about the Prophet Muhammad, but to this day no Muslim cleric has issued a fatwa condemning Osama bin Laden for murdering three thousand innocent civilians. After the fatwa was declared against Salman Rushdie, Muslims staged protests against the book at British embassies all over the Islamic world and burned Salman Rushdie dolls along with copies of his book. Nine people were killed in an anti-Rushdie protest in Pakistan.

“Religious legal rulings were disseminated one after another banning Salman Rushdie's book and calling for him to be killed,” Bin Tefla wrote. “Iran earmarked a reward of $ 1 million for whoever would implement Imam Khomeini's fatwa and kill Salman Rushdie.” And bin Laden? Nothing-no condemnation. “Despite the fact that bin Laden murdered thousands of innocents in the name of our religion and despite the damage that he has caused to Muslims everywhere, and especially to innocent Muslims in the West, whose life is much better than the life of Muslims in Islamic lands, to this date not a single fatwa has been issued calling for the killing of bin Laden, on the pretext that bin Laden still proclaims 'there is no God other than Allah,'” Tefla wrote. Worse, he added, Arab and Muslim satellite television channels have “competed amongst themselves in broadcasting [bin Laden's] sermons and fatwas, instead of preventing their dissemination as they did in the case of Rushdie's book... With our equivocal stance on bin Laden, we from the very start left the world with the impression that we are all bin Laden.”

Germany was humiliated after World War I, but it had the modern economic foundations to produce a state response to that humiliation—in the form of the Third Reich. The Arab world, by contrast, could not produce a state response to its humiliation. Instead, it has rattled the world stage in the last fifty years with two larger-than-life figures, rather than states, noted political theorist Yaron Ezrahi: One was the Saudi oil minister Ahmed Zaki Yamani, and the other was Osama bin Laden. Each achieved global notoriety, each briefly held the world in his palm-one by using oil as a weapon and the other by using the most unconventional suicide violence imaginable. Each gave a temporary “high” to the Arab-Muslim world, a feeling that it was exercising power on the world stage. But bin Laden and Yamani were only the illusions of power, noted Ezrahi: The Saudi oil weapon is economic power without productivity, and bin Laden's terrorism weapon is military force without a real army, state, economy, and engine of innovation to support it.

What makes Yamanism and bin Ladenism so unfortunate as strategies for Arab influence in the world is that they ignore the examples within Arab culture and civilization-when it was at its height-of discipline, hard work, knowledge, achievement, scientific inquiry, and pluralism. As Nayan Chanda, the editor of YaleGlobal Online, pointed out to me, it was the Arab-Muslim world that gave birth to algebra and algorithms, terms both derived from Arabic words. In other words, noted Chanda, “The entire modern information revolution, which is built to a large degree on algorithms, can trace its roots all the way back to Arab-Muslim civilization and the great learning centers of Baghdad and Alexandria,” which first introduced these concepts, then transferred them to Europe through Muslim Spain. The Arab-Muslim peoples have an incredibly rich cultural tradition and civilization, with long periods of success and innovation to draw on for inspiration and example for their young people. They have all the resources necessary for modernization in their own cultural terms, if they want to summon them.

Unfortunately, there is huge resistance to such modernization from the authoritarian and religiously obscurantist forces within the Arab-Muslim world. That is why this part of the world will be liberated, and feel truly empowered, only if it goes through its own war of ideas—and the moderates there win. We had a civil war in America some 150 years ago over ideas-the ideas of tolerance, pluralism, human dignity, and equality. The best thing outsiders can do for the Arab-Muslim world today is try to collaborate with its progressive forces in every way possible— from trying to solve the Arab-Israeli conflict, to stabilizing Iraq, to signing free-trade agreements with as many Arab countries as possible-so as to foster a similar war of ideas within their civilization. There is no other way. Otherwise this part of the world has the potential to be a huge un-flattening force. We have to wish the good people there well. But the battle will be one for them to fight and to win. No one can do it for them.

No one has expressed what is needed better than Abdel Rahman al-Rashed, the general manager of the London-based al-Arabiya news channel. One of the best-known and most respected Arab journalists working today, he wrote the following, in Al-Sharq Al-Awsat (September 6, 2004), after a series of violent incidents involving Muslim extremist groups from Chechnya to Saudi Arabia to Iraq: “Self-cure starts with self-realization and confession. We should then run after our terrorist sons, in the full knowledge that they are the sour grapes of a deformed culture... The mosque used to be a haven, and the voice of religion used to be that of peace and reconciliation. Religious sermons were warm behests for a moral order and an ethical life. Then came the neo-Muslims. An innocent and benevolent religion, whose verses prohibit the felling of trees in the absence of urgent necessity, that calls murder the most heinous of crimes, that says explicitly that if you kill one person you have killed humanity as a whole, has been turned into a global message of hate and a universal war cry... We cannot clear our names unless we own up to the shameful fact that terrorism has become an Islamic enterprise; an almost exclusive monopoly, implemented by Muslim men and women. We cannot redeem our extremist youth, who commit all these heinous crimes, without confronting the Sheikhs who thought it ennobling to reinvent themselves as revolutionary ideologues, sending other people's sons and daughters to certain death, while sending their own children to European and American schools and colleges.”

Too Many Toyotas

The problems of the too sick, the too disempowered, and the too humiliated are all in their own ways keeping the world from becoming entirely flat. They may do so even more in the future, if they are not properly addressed. But another barrier to the flattening of the world is emerging, one that is not a human constraint but a natural resource constraint. If millions of people from India, China, Latin America, and the former Soviet Empire who were living largely outside the flat world all start to walk onto the flat world playing field at once-and all come with their own dream of owning a car, a house, a refrigerator, a microwave, and a toaster-we are going to experience either a serious energy shortage or, worse, wars over energy that would have a profoundly unflattening effect on the world.

As I mentioned earlier, I visited Beijing in the summer of 2004 with my wife and teenage daughter, Natalie. Before we left, I said to Natalie, “You're really going to like this city. They have these big bicycle lanes on all the main roads. Maybe when we get there we can rent bikes and just ride around Beijing. I did that last time I was there, and it was a lot of fun.”

Silly Tom. I hadn't been to Beijing in three years, and just in that brief period of time the explosive growth there had wiped out many of those charming bicycle lanes. They had been either shrunken or eliminated to add another lane for automobiles and buses. The only biking I did there was on the stationary exercise bike in our hotel, which was a good antidote for having to spend so much time sitting in cars stuck in Beijing traffic jams. I was in Beijing to attend an international business conference, and while there I discovered why all the bikes had disappeared. According to one speaker at the conference, some thirty thousand new cars were being added to the roads in Beijing every month-one thousand new cars a day! I found that statistic so unbelievable that I asked Michael Zhao, a young researcher in the Times's Beijing bureau, to double-check it, and he wrote me back the following e-mail:

Hi Tom, Hope this email finds you well. On your question about how many cars are added each day in Beijing, I did some research on the Internet and found that... car sales in [Beijing] for April 2004 were 43,000—24.1% more than same period last year. So that is 1,433 cars added [daily] to Beijing, but including secondhand car sales. New car sales this month were 30,000, or 1,000 cars each day added to the city. The total car sales from Jan. to April 2004 were 165,000, that is about 1,375 cars added each day to Beijing over this period. This data is from the Beijing Municipal Bureau of Commerce. The city's bureau of statistics has it that the total car sales in 2003 were 407,649, or 1,117 cars each day added. The new car sales last year were 292,858, or 802 new cars each day... The total number of cars in Beijing is 2.1 million... But the recent months seem to have witnessed surging sales. Also noteworthy is last year's SARS outbreak, during which period a lot of families bought cars, due to panic about public contact and a sort of doomsday-stimulated enjoy-life mentality. And many new car owners did enjoy their time driving, as the traffic in the city so much improved with a lot of people voluntarily caged at home, without daring to go out. Since then, coupled with dropping car prices due to China's commitment to reduce tariffs after joining the WTO, a large number of families have advanced their timetable of buying a car, although some others decided to wait for further drops of prices. All the best, Michael.

As Michael's note indicated, you can see China's middle class rising right before your eyes, and it is going to have enormous energy and environmental spillover. The Great Chinese Dream, like the Great Indian Dream, the Great Russian Dream, and the Great American Dream, is built around a high-energy, high-electricity, high-bent-metal lifestyle. To put it another way, the thirty thousand new cars a month in Beijing, and the cloud of haze that envelops the city on so many days, and the fact that the city's official Web site actually keeps track of “blue sky” days all testify to the environmental destruction that could arise from the triple convergence-if clean alternative renewable energies are not developed soon. Already, according to the World Bank, sixteen of the twenty most polluted cities in the world are in China, and that pollution and environmental degradation together cost China $170 billion a year (The Economist, August 21, 2004).

And we have not seen anything yet. China, with its own oil and gas reserves, was once a net exporter. Not anymore. In 2003 China surged ahead of Japan as the second largest importer of oil in the world, after the United States. Right now about 700 to 800 million of China's 1.3 billion people live in the countryside, but they are heading for the flat world, and roughly half are expected to try to migrate to the cities over the next two decades, if they can find work. This will spur a huge surge in demand for cars, houses, steel beams, power plants, school buildings, sewage plants, electricity grids-the energy implications of which are unprecedented in the history of Planet Earth, round or flat.

At the business conference I was attending in Beijing, I kept hearing references to the Strait of Malacca-the narrow passage between Malaysia and Indonesia that is patrolled by the U.S. Navy and controls all the oil tanker traffic from the Middle East to China and Japan. I hadn't heard anyone talking about the Strait of Malacca since the 1970s oil crises. But evidently Chinese strategic planners have begun to grow increasingly concerned that the United States could choke off China's economy at any time by just closing the Strait of Malacca, and this threat is now being increasingly and openly discussed in Chinese military circles. It is just a small hint of the potential struggle for power-energy power-that could ensue if the Great American Dream and the Great Chinese Dream and the Great Indian Dream and the Great Russian Dream come to be seen as mutually exclusive in energy terms.

China's foreign policy today consists of two things: preventing Taiwan from becoming independent and searching for oil. China is now obsessed with acquiring secure oil supplies from countries that would not retaliate against China if it invaded Taiwan, and this is driving China to get cozy with some of the worst regimes in the world. The Islamic fundamentalist government in Sudan now supplies China with 7 percent of its oil supplies and China has invested $3 billion in oil drilling infrastructure there.

In September 2004, China threatened to veto a move by the United Nations to impose sanctions on Sudan for the genocide that it is perpetrating in its Darfur province. China followed by opposing any move to refer Iran's obvious attempts to develop nuclear-weapons-grade fuel to the United Nations Security Council. Iran supplies 13 percent of China's oil supplies. Meanwhile, as the Daily Telegraph reported (November 19, 2004), China has begun drilling for gas in the East China Sea, just west of the line that Japan regards as its border: “Japan protested, to no avail, that the project should be a joint one. The two are also set to clash over Russia's oil wealth. China is furious that Japan has outbid it in their battle to determine the route of the pipeline that Russia intends to build to the Far East.” At the same time it was reported that a Chinese nuclear submarine had accidentally strayed into Japanese territorial waters. The Chinese government apologized for the “technical error.” If you believe that, I have an oil well in Hawaii I would like to sell you...

In 2004, China began competing with the United States for oil exploration opportunities in Canada and Venezuela. If China has its way, it will stick a straw into Canada and Venezuela and suck out every drop of oil, which will have the side effect of making America more dependent on Saudi Arabia.

I interviewed the Japanese manager of a major U.S. multinational that was headquartered in Dalian, in northeastern China. “China is following the path of Japan and Korea,” said the executive, on the condition that he and his company not be quoted by name, “and the big question is, Can the world afford to have 1.3 billion people following that path and driving the same cars and using the same amount of energy? So I see the flattening, but the challenge of the twenty-first century is, Are we going to hit another oil crisis? The oil crisis in the 1970s coincided with Japan and Europe rising. [There was a time] when the U.S. was the only big consumer of oil, but when Japan and Europe came in, OPEC got the power. But when China and India come into being the consumers, it will be a huge challenge that is an order of magnitude different. It is megapolitics. The limits of growth in the 1970s were overcome with technology. We got smarter than before, equipment became more efficient, and energy consumption per head was lower. But now [with China, India, and Russia all coming on strong] it is multiplied by a factor of ten. There is something we really need to be serious about. We cannot restrict China, [Russia,] and India. They will grow and they must grow.”

One thing we will not be able to do is tell young Indians, Russians, Poles, or Chinese that just when they are arriving on the leveled playing field, they have to hold back and consume less for the greater global good. While giving a talk to students at the Beijing College of Foreign Affairs, I spoke about the most important issues that could threaten global stability, including the competition for oil and other energy resources that would naturally occur as China, India, and the former Soviet Union began to consume more oil. No sooner did I finish than a young Chinese woman student shot up her hand and asked basically the following question: “Why should China have to restrain its energy consumption and worry about the environment, when America and Europe got to consume all they energy they wanted when they were developing?” I did not have a good answer. China is a high-pride country. Telling China, India, and Russia to consume less could have the same geopolitical impact that the world's inability to accommodate a rising Japan and Germany had after World War I.

If current trends hold, China will go from importing 7 million barrels of oil today to 14 million a day by 2012. For the world to accommodate that increase it would have to find another Saudi Arabia. That is not likely, which doesn't leave many good options. “For geopolitical reasons, we cannot tell them no, we cannot tell China and India, it is not your turn,” said Philip K. Verleger Jr., a leading oil economist. “And for moral reasons, we have lost the ability to lecture anyone.” But if we do nothing, several things will likely result. First, gasoline prices will continue to trend higher and higher. Second, we will be strengthening the very worst political systems in the world-like Sudan, Iran, and Saudi Arabia. And third, the environment will be damaged more and more. Already, the newspaper headlines in China every day are about energy shortages, blackouts, and brownouts. U.S. officials estimate that twenty-four out of China's thirty-one provinces are now experiencing power shortages.

We are all stewards of the planet, and the test for our generation is whether we will pass on a planet in as good or better shape than we found it. The flattening process is going to challenge that responsibility. “Aldo Leopold, the father of wildlife ecology, once said: 'The first rule of intelligent tinkering is save all the pieces,'” remarked Glenn Prickett, senior vice president of Conservation International. “What if we don't? What if the 3 billion new entrants start gobbling up all the resources? Species and ecosystems can't adapt that fast, and we will lose a major portion of the earth's remaining biological diversity.” Already, noted Prickett, if you look at what is happening in the Congo Basin, the Amazon, the rain forest of Indonesia-the last great wilderness areas-you find that they are being devoured by China's rising appetite. More and more palm oil is being extracted from Indonesia and Malaysia, soybeans out of Brazil, timber out of central Africa, and natural gas out of all of the above to serve China-and, as a result, threatening all sorts of natural habitats. If these trends go on unchecked, with all the natural habitats being converted to farmland and urban areas, and the globe getting warmer, many of the currently threatened species will be condemned to extinction.

The move to sharply reduce energy consumption has to come from within China, as the Chinese confront what the need for fuel is doing to their own environment and growth aspirations. The only thing-and the best thing-we in the United States and Western Europe can do to nudge China toward that understanding is set an example by changing our own consumption patterns. That would give us some credibility to lecture others. “Restoring our moral standing on energy is now a vital national security and environmental issue,” said Verleger. That requires doing everything more seriously-more serious government funding for alternatives, a real push by the federal government to promote conservation, a gasoline tax that will drive more consumers to buy hybrid vehicles and smaller cars, legislation to force Detroit to make more fuel-efficient vehicles, and yes, more domestic exploration. Together, added Verleger, that could help stabilize the price at around $25 a barrel, “which seems to be the ideal range for sustainable global growth.”

In sum, we in the West have a fundamental interest in keeping the American dream alive in Beijing and Boise and Bangalore. But we have to stop fooling ourselves that it can be done in a flat world with 3 billion potential new consumers-if we don't find a radical new approach to energy usage and conservation. If we fail to do so, we will be courting both an environmental and geopolitical whirlwind. If there was ever a time for some big collaboration, it is now, and the subject is energy. I would love to see a grand China-United States Manhattan Project, a crash program to jointly develop clean alternative energies, bringing together China's best scientists and its political ability to implement pilot projects, with America's best brains, technology, and money. It would be the ideal model and the ideal project for creating value horizontally, with each side contributing its strength. Said Scott Roberts, the Cambridge Energy Research Associates analyst in China, “When it comes to renewable technology and sustainable energy, China could be the laboratory of the world-not just the workshop of the world.” Why not?

TWELVE: The Dell Theory of Conflict Prevention, Old-Time Versus Just-in-Time

Before I share with you the subject of this chapter, I have to tell you a little bit about the computer that I wrote this book on. It's related to the theme I am about to discuss. This book was largely written on a Dell Inspiron 600m notebook, service tag number 9ZRJP41. As part of the research for this book71 visited with the management team at Dell near Austin, Texas. I shared with them the ideas in this book and in return I asked for one favor: I asked them to trace for me the entire global supply chain that produced my Dell notebook. Here is their report: My computer was conceived when I phoned Dell's 800 number on April 2, 2004, and was connected to sales representative Mujteba Naqvi, who immediately entered my order into Dell's order management system. He typed in both the type of notebook I ordered as well as the special features I wanted, along with my personal information, shipping address, billing address, and credit card information. My credit card was verified by Dell through its work flow connection with Visa, and my order was then released to Dell's production system. Dell has six factories around the world-in Limerick, Ireland; Xiamen, China; Eldorado do Sul, Brazil; Nashville, Tennesee; Austin, Texas; and Penang, Malaysia. My order went out by e-mail to the Dell notebook factory in Malaysia, where the parts for the computer were immediately ordered from the supplier logistics centers (SLCs) next to the Penang factory. Surrounding every Dell factory in the world are these supplier logistics centers, owned by the different suppliers of Dell parts. These SLCs are like staging areas. If you are a Dell supplier anywhere in the world, your job is to keep your SLC full of your specific parts so they can constantly be trucked over to the Dell factory for just-in-time manufacturing.

“In an average day, we sell 140,000 to 150,000 computers,” explained Dick Hunter, one of Dell's three global production managers. “Those orders come in over Dell.com or over the telephone. As soon these orders come in, our suppliers know about it. They get a signal based on every component in the machine you ordered, so the supplier knows just what he has to deliver. If you are supplying power cords for desktops, you can see minute by minute how many power cords you are going to have to deliver.” Every two hours, the Dell factory in Penang sends an e-mail to the various SLCs nearby, telling each one what parts and what quantities of those parts it wants delivered within the next ninety minutes-and not one minute later. Within ninety minutes, trucks from the various SLCs around Penang pull up to the Dell manufacturing plant and unload the parts needed for all those notebooks ordered in the last two hours. This goes on all day, every two hours. As soon as those parts arrive at the factory, it takes thirty minutes for Dell employees to unload the parts, register their bar codes, and put them into the bins for assembly. “We know where every part in every SLC is in the Dell system at all times,” said Hunter.

So where did the parts for my notebook come from? I asked Hunter. To begin with, he said, the notebook was codesigned in Austin, Texas, and in Taiwan by a team of Dell engineers and a team of Taiwanese notebook designers. “The customer's needs, required technologies, and Dell's design innovations were all determined by Dell through our direct relationship with customers,” he explained. “The basic design of the motherboard and case-the basic functionality of your machine-was designed to those specifications by an ODM [original design manufacturer] in Taiwan. We put our engineers in their facilities and they come to Austin and we actually codesign these systems. This global teamwork brings an added benefit-a globally distributed virtually twenty-four-hour-per-day development cycle. Our partners do the basic electronics and we help them design customer and reliability features that we know our customers want. We know the customers better than our suppliers and our competition, because we are dealing directly with them every day.” Dell notebooks are completely redesigned roughly every twelve months, but new features are constantly added during the year— through the supply chain-as the hardware and software components advance.

It happened that when my notebook order hit the Dell factory in Penang, one part was not available-the wireless card-due to a quality control issue, so the assembly of the notebook was delayed for a few days. Then the truck full of good wireless cards arrived. On April 13, at 10:15 a.m., a Dell Malaysia worker pulled the order slip that automatically popped up once all my parts had arrived from the SLCs to the Penang factory. Another Dell Malaysia employee then took out a “traveler”-a special carrying tote designed to hold and protect parts-and started plucking all the parts that went into my notebook.

Where did those parts come from? Dell uses multiple suppliers for most of the thirty key components that go into its notebooks. That way if one supplier breaks down or cannot meet a surge in demand, Dell is not left in the lurch. So here are the key suppliers for my Inspiron 600m notebook: The Intel microprocessor came from an Intel factory either in the Philippines, Costa Rica, Malaysia, or China. The memory came from a Korean-owned factory in Korea (Samsung), a Taiwanese-owned factory in Taiwan (Nanya), a German-owned factory in Germany (Infineon), or a Japanese-owned factory in Japan (Elpida). My graphics card was shipped from either a Taiwanese-owned factory in China (MSI) or a Chinese-run factory in China (Foxconn). The cooling fan came from a Taiwanese-owned factory in Taiwan (CCI or Auras). The motherboard came from either a Korean-owned factory in Shanghai (Samsung), a Taiwanese-owned factory in Shanghai (Quanta), or a Taiwanese-owned factory in Taiwan (Compal or Wistron). The keyboard came from either a Japanese-owned company in Tianjin, China (Alps), a Taiwanese-owned factory in Shenzen, China (Sunrex), or a Taiwanese-owned factory in Suzhou, China (Darfon). The LCD display was made in either South Korea (Samsung or LG.Philips LCD), Japan (Toshiba or Sharp), or Taiwan (Chi Mei Optoelectronics, Hannstar Display, or AU Optronics). The wireless card came from either an American-owned factory in China (Agere) or Malaysia (Arrow), or a Taiwanese-owned factory in Taiwan (Askey or Gemtek) or China (USI). The modem was made by either a Taiwanese-owned company in China (Asustek or Liteon) or a Chinese-run company in China (Foxconn). The battery came from an American-owned factory in Malaysia (Motorola), a Japanese-owned factory in Mexico or Malaysia or China (Sanyo), or a South Korean or Taiwanese factory in either of those two countries (SDI or Simplo). The hard disk drive was made by an American-owned factory in Singapore (Seagate), a Japanese-owned company in Thailand (Hitachi or Fujitsu), or a Japanese-owned factory in the Philippines (Toshiba). The CD/DVD drive came from a South Korean-owned company with factories in Indonesia and the Philippines (Samsung); a Japanese-owned factory in China or Malaysia (NEC); a Japanese-owned factory in Indonesia, China, or Malaysia (Teac); or a Japanese-owned factory in China (Sony). The notebook carrying bag was made by either an Irish-owned company in China (Tenba) or an American-owned company in China (Targus, Samsonite, or Pacific Design). The power adapter was made by either a Thai-owned factory in Thailand (Delta) or a Taiwanese, Korean, or American-owned factory in China (Liteon, Samsung, or Mobility). The power cord was made by a British-owned company with factories in China, Malaysia, and India (Volex). The removable memory stick was made by either an Israeli-owned company in Israel (M-System) or an American-owned company with a factory in Malaysia (Smart Modular).

This supply chain symphony-from my order over the phone to production to delivery to my house-is one of the wonders of the flat world.

“We have to do a lot of collaborating,” said Hunter. “Michael [Dell] personally knows the CEOs of these companies, and we are constantly working with them on process improvements and real-time demand/supply balancing.” Demand shaping goes on constantly, said Hunter. What is “demand shaping”? It works like this: At 10 a.m. Austin time, Dell discovers that so many customers have ordered notebooks with 40-gigabyte hard drives since the morning that its supply chain will run short in two hours. That signal is automatically relayed to Dell's marketing department and to Dell.com and to all the Dell phone operators taking orders. If you happen to call to place your Dell order at 10:30 a.m., the Dell representative will say to you, “Tom, it's your lucky day! For the next hour we are offering 60-gigabyte hard drives with the notebook you want-for only $10 more than the 40-gig drive. And if you act now, Dell will throw in a carrying case along with your purchase, because we so value you as a customer.” In an hour or two, using such promotions, Dell can reshape the demand for any part of any notebook or desktop to correspond with the projected supply in its global supply chain. Today memory might be on sale, tomorrow it might be CD-ROMs.

Picking up the story of my notebook, on April 13, at 11:29 a.m., all the parts had been plucked from the just-in-time inventory bins in Penang, and the computer was assembled there by A. Sathini, a team member “who manually screwed together all of the parts from kitting as well as the labels needed for Tom's system,” said Dell in their production report to me. “The system was then sent down the conveyor to go to burn, where Tom's specified software was downloaded.” Dell has huge server banks stocked with the latest in Microsoft, Norton Utilities, and other popular software applications, which are downloaded into each new computer according to the specific tastes of the customer.

“By 2:45 p.m., Tom's software had been successfully downloaded, and [was] manually moved to the boxing line. By 4:05 p.m., Tom's system [was] placed in protective foam and a shuttle box, with a label, which contains his order number, tracking code, system type, and shipping code. By 6:04 p.m., Tom's system had been loaded on a pallet with a specified manifest, which gives the Merge facility visibility to when the system will arrive, what pallet it will be on (out of 75+ pallets with 152 systems per pallet), and to what address Tom's system will ship. By 6:26 p.m., Tom's system left [the Dell factory] to head to the Penang, Malaysia, airport.”

Six days a week Dell charters a China Airlines 747 out of Taiwan and flies it from Penang to Nashville via Taipei. Each 747 leaves with twenty-five thousand Dell notebooks that weigh altogether 110,000 kilograms, or 50,000 pounds. It is the only 747 that ever lands in Nashville, except Air Force One, when the president visits. “By April 15, 2004, at 7:41 a.m., Tom's system arrived at [Nashville] with other Dell systems from Penang and Limerick. By 11:58 a.m., Tom's system [was] inserted into a larger box, which went down the boxing line to the specific external parts that Tom had ordered.”

That was thirteen days after I'd ordered it. Had there not been a parts delay in Malaysia when my order first arrived, the time between when I phoned in my purchase, when the notebook was assembled in Penang, and its arrival in Nashville would have been only four days. Hunter said the total supply chain for my computer, including suppliers of suppliers, involved about four hundred companies in North America, Europe, and primarily Asia, but with thirty key players. Somehow, though, it all came together. As Dell reported: On April 15, 2004, at 12:59 p.m., “Tom's system had been shipped from [Nashville] and was tenured by UPS shipping LTL (3-5-day ground, specified by Tom), with UPS tracking number 1Z13WA374253514697. By April 19, 2004, at 6:41 p.m., Tom's system arrived in Bethesda, MD, and was signed for.”

I am telling you the story of my notebook to tell a larger story of geopolitics in the flat world. To all the forces mentioned in the previous chapter that are still holding back the flattening of the world, or could actually reverse the process, one has to add a more traditional threat, and that is an outbreak of a good, old-fashioned, world-shaking, economy-destroying war. It could be China deciding once and for all to eliminate Taiwan as an independent state; or North Korea, out of fear or insanity, using one of its nuclear weapons against South Korea or Japan; or Israel and a soon-to-be-nuclear Iran going at each other; or India and Pakistan finally nuking it out. These and other classic geopolitical conflicts could erupt at any time and either slow the flattening of the world or seriously unflatten it.

The real subject of this chapter is how these classic geopolitical threats might be moderated or influenced by the new forms of collaboration fostered and demanded by the flat world-particularly supply-chaining. The flattening of the world is too young for us to draw any definitive conclusions. What is certain, though, is that as the world flattens, one of the most interesting dramas to watch in international relations will be the interplay between the traditional global threats and the newly emergent global supply chains. The interaction between old-time threats (like China versus Taiwan) and just-in-time supply chains (like China plus Taiwan) will be a rich source of study for the field of international relations in the early twenty-first century.

In The Lexus and the Olive Tree I argued that to the extent that countries tied their economies and futures to global integration and trade, it would act as a restraint on going to war with their neighbors. I first started thinking about this in the late 1990s, when, during my travels, I noticed that no two countries that both had McDonald's had ever fought a war against each other since each got its McDonald's. (Border skirmishes and civil wars don't count, because McDonald's usually served both sides.) After confirming this with McDonald's, I offered what I called the Golden Arches Theory of Conflict Prevention. The Golden Arches Theory stipulated that when a country reached the level of economic development where it had a middle class big enough to support a network of McDonald's, it became a McDonald's country. And people in McDonald's countries didn't like to fight wars anymore. They preferred to wait in line for burgers. While this was offered slightly tongue in cheek, the serious point I was trying to make was that as countries got woven into the fabric of global trade and rising living standards, which having a network of McDonald's franchises had come to symbolize, the cost of war for victor and vanquished became prohibitively high.

This McDonald's theory has held up pretty well, but now that almost every country has acquired a McDonald's, except the worst rogues like North Korea, Iran, and Iraq under Saddam Hussein, it seemed to me that this theory needed updating for the flat world. In that spirit, and again with tongue slightly in cheek, I offer the Dell Theory of Conflict Prevention, the essence of which is that the advent and spread of just-in-time global supply chains in the flat world are an even greater restraint on geopolitical adventurism than the more general rising standard of living that McDonald's symbolized.

The Dell Theory stipulates: No two countries that are both part of a major global supply chain, like Dell's, will ever fight a war against each other as long as they are both part of the same global supply chain. Because people embedded in major global supply chains don't want to fight old-time wars anymore. They want to make just-in-time deliveries of goods and services -and enjoy the rising standards of living that come with that. One of the people with the best feel for the logic behind this theory is Michael Dell, the founder and chairman of Dell.

“These countries understand the risk premium that they have,” said Dell of the countries in his Asian supply chain. “They are pretty careful to protect the equity that they have built up or tell us why we should not worry [about their doing anything adventurous]. My belief after visiting China is that the change that has occurred there is in the best interest of the world and China. Once people get a taste for whatever you want to call it-economic independence, a better lifestyle, and a better life for their child or children-they grab on to that and don't want to give it up.”

Any sort of war or prolonged political upheaval in East Asia or China “would have a massive chilling effect on the investment there and on all the progress that has been made there,” said Dell, who added that he believes the governments in that part of the world understand this very clearly. “We certainly make clear to them that stability is important to us. [Right now] it is not a day-to-day worry for us... I believe that as time and progress go on there, the chance for a really disruptive event goes down exponentially. I don't think our industry gets enough credit for the good we are doing in these areas. If you are making money and being productive and raising your standard of living, you're not sitting around thinking, Who did this to us? or Why is our life so bad?”

There is a lot of truth to this. Countries whose workers and industries are woven into a major global supply chain know that they cannot take an hour, a week, or a month off for war without disrupting industries and economies around the world and thereby risking the loss of their place in that supply chain for a long time, which could be extremely costly. For a country with no natural resources, being part of a global supply chain is like striking oil-oil that never runs out. And therefore, getting dropped from such a chain because you start a war is like having your oil wells go dry or having someone pour cement down them. They will not come back anytime soon.

“You are going to pay for it really dearly,” said Glenn E. Neland, senior vice president for worldwide procurement at Dell, when I asked him what would happen to a major supply-chain member in Asia that decided to start fighting with its neighbor and disrupt the supply chain. “It will not only bring you to your knees [today], but you will pay for a long time-because you just won't have any credibility if you demonstrate you are going to go [off] the political deep end. And China is just now starting to develop a level of credibility in the business community that it is creating a business environment you can prosper in-with transparent and consistent rules.” Neland said that suppliers regularly ask him whether he is worried about China and Taiwan, which have threatened to go to war at several points in the past half century, but his standard response is that he cannot imagine them “doing anything more than flexing muscles with each other.” Neland said he can tell in his conversations and dealings with companies and governments in the Dell supply chain, particularly the Chinese, that “they recognize the opportunity and are really hungry to participate in the same things they have seen other countries in Asia do. They know there is a big economic pot at the end of the rainbow and they are really after it. We will spend about $35 billion producing parts this year, and 30 percent of that is [in] China.”

If you follow the evolution of supply chains, added Neland, you see the prosperity and stability they promoted first in Japan, and then in Korea and Taiwan, and now in Malaysia, Singapore, the Philippines, Thailand, and Indonesia. Once countries get embedded in these global supply chains, “they feel part of something much bigger than their own businesses,” he said. Osamu Watanabe, the CEO of the Japan External Trade Organization (JETRO), was explaining to me one afternoon in Tokyo how Japanese companies were moving vast amounts of low— and middle-range technical work and manufacturing to China, doing the basic fabrication there, and then bringing it back to Japan for final assembly. Japan was doing this despite a bitter legacy of mistrust between the two countries, which was intensified by the Japanese invasion of China in the last century. Historically, he noted, a strong Japan and a strong China have had a hard time coexisting. But not today, at least not for the moment. Why not? I asked. The reason you can have a strong Japan and a strong China at the same time, he said, “is because of the supply chain.” It is a win-win for both.

Obviously, since Iraq, Syria, south Lebanon, North Korea, Pakistan, Afghanistan, and Iran are not part of any major global supply chains, all of them remain hot spots that could explode at any time and slow or reverse the flattening of the world. As my own notebook story attests, the most important test case of the Dell Theory of Conflict Prevention is the situation between China and Taiwan-since both are deeply embedded in several of the world's most important computer, consumer electronics, and, increasingly, software supply chains. The vast majority of computer components for every major company comes from coastal China, Taiwan, and East Asia. In addition, Taiwan alone has more than $100 billion in investments in mainland China today, and Taiwanese experts run many of the cutting-edge Chinese high-tech manufacturing companies.

It is no wonder that Craig Addison, the former editor of Electronic Business Asia magazine, wrote an essay for the International Herald Tribune (September 29, 2000), headlined “A 'Silicon Shield' Protects Taiwan from China.” He argued that “Silicon-based products, such as computers and networking systems, form the basis of the digital economies in the United States, Japan and other developed nations. In the past decade, Taiwan has become the third-largest information technology hardware producer after the United States and Japan. Military aggression by China against Taiwan would cut off a large portion of the world's supply of these products... Such a development would wipe trillions of dollars off the market value of technology companies listed in the United States, Japan and Europe.” Even if China's leaders, like former president Jiang Zemin, who was once minister of electronics, lose sight of how integrated China and Taiwan are in the world's computer supply chain, they need only ask their kids for an update. Jiang Zemin's son, Jiang Mianheng, wrote Addison, “is a partner in a wafer fabrication project in Shanghai with Winston Wang of Taiwan's Grace T.H.W. Group.” And it is not just Taiwanese. Hundreds of big American tech companies now have R & D operations in China; a war that disrupted them could lead not only to the companies moving their plants elsewhere but also to a significant loss of R & D investment in China, which the Beijing government has been betting on to advance its development. Such a war could also, depending on how it started, trigger a widespread American boycott of Chinese goods-if China were to snuff out the Taiwanese democracy-which would lead to serious economic turmoil inside China.

The Dell Theory had its first real test in December 2004, when Taiwan held parliamentary elections. President Chen Shui-bian's pro-independence Democratic Progressive Party was expected to win the legislative runoff over the main opposition Nationalist Party, which favored closer ties with Beijing. Chen framed the election as a popular referendum on his proposal to write a new constitution that would formally enshrine Taiwan's independence, ending the purposely ambiguous status quo. Had Chen won and moved ahead on his agenda to make Taiwan its own motherland, as opposed to maintaining the status quo fiction that it is a province of the mainland, it could have led to a Chinese military assault on Taiwan. Everyone in the region was holding his or her breath. And what happened? Motherboards won over motherland. A majority of Taiwanese voted against the pro-independence governing party legislative candidates, ensuring that the DPP would not have a majority in parliament. I believe the message Taiwanese voters were sending was not that they never want Taiwan to be independent. It was that they do not want to upset the status quo right now, which has been so beneficial to so many Taiwanese. The voters seemed to understand clearly how interwoven they had become with the mainland, and they wisely opted to maintain their de facto independence rather than force de jure independence, which might have triggered a Chinese invasion and a very uncertain future.

Warning: What I said when I put forth the McDonald's theory, I would repeat even more strenuously with the Dell Theory: It does not make wars obsolete. And it does not guarantee that governments will not engage in wars of choice, even governments that are part of major supply chains. To suggest so would be naive. It guarantees only that governments whose countries are enmeshed in global supply chains will have to think three times, not just twice, about engaging in anything but a war of self-defense. And if they choose to go to war anyway, the price they will pay will be ten times higher than it was a decade ago and probably ten times higher than whatever the leaders of that country think. It is one thing to lose your McDonald's. It's quite another to fight a war that costs you your place in a twenty-first-century supply chain that may not come back around for a long time.

While the biggest test case of the Dell Theory is China versus Taiwan, the fact is that the Dell Theory has already proved itself to some degree in the case of India and Pakistan, the context in which I first started to think about it. I happened to be in India in 2002, when its just-in-time services supply chains ran into some very old-time geopolitics-and the supply chain won. In the case of India and Pakistan, the Dell Theory was working on only one party-India-but it still had a major impact. India is to the world's knowledge and service supply chain what China and Taiwan are to the manufacturing ones. By now readers of this book know all the highlights: General Electric's biggest research center outside the United States is in Bangalore, with seventeen hundred Indian engineers, designers, and scientists. The brain chips for many brand-name cell phones are designed in Bangalore. Renting a car from Avis online? It's managed in Bangalore. Tracing your lost luggage on Delta or British Airways is done from Bangalore, and the backroom accounting and computer maintenance for scores of global firms are done from Bangalore, Mumbai, Chennai, and other major Indian cities. Here's what happened: On May 31, 2002, State Department spokesman Richard Boucher issued a travel advisory saying, “We urge American citizens currently in India to depart the country,” because the prospect of a nuclear exchange with Pakistan was becoming very real. Both nations were massing troops on their borders, intelligence reports were suggesting that they both might be dusting off their nuclear warheads, and CNN was flashing images of people flooding out of India. The global American firms that had moved their back rooms and R & D operations to Bangalore were deeply unnerved.

“I was actually surfing on the Web, and I saw a travel advisory come up on India on a Friday evening/' said Vivek Paul, president of Wipro, which manages backroom operations from India of many American multinationals. ”As soon as I saw that, I said, 'Oh my gosh, every customer that we have is going to have a million questions on this.' It was the Friday before a long weekend, so over the weekend we at Wipro developed a fail-safe business continuity plan for all of our customers.“ While Wipro's customers were pleased to see how on top of things the company was, many of them were nevertheless rattled. This was not in the plan when they decided to outsource mission-critical research and operations to India. Said Paul, ”I had a CIO from one of our big American clients send me an e-mail saying, I am now spending a lot of time looking for alternative sources to India. I don't think you want me doing that, and I don't want to be doing it.' I immediately forwarded his message to the Indian ambassador in Washington and told him to get it to the right person.“ Paul would not tell me what company it was, but I have confirmed through diplomatic sources that it was United Technologies. And plenty of others, like American Express and General Electric, with back rooms in Bangalore, had to have been equally worried.

For many global companies, “the main heart of their business is now supported here,” said N. Krishnakumar, president of MindTree, another leading Indian knowledge outsourcing firm based in Bangalore. “It can cause chaos if there is a disruption.” While not trying to meddle in foreign affairs, he added, “What we explained to our government, through the Confederation of Indian Industry, is that providing a stable, predictable operating environment is now the key to India's development.” This was a real education for India's elderly leaders in New Delhi, who had not fully absorbed how critical India had become to the world's knowledge supply chain. When you are managing vital backroom operations for American Express or General Electric or Avis, or are responsible for tracing all the lost luggage on British Airways or Delta, you cannot take a month, a week, or even a day off for war without causing major disruptions for those companies. Once those companies have made a commitment to outsource business operations or research to India, they expect it to stay there. That is a major commitment. And if geopolitics causes a serious disruption, they will leave, and they will not come back very easily. When you lose this kind of service trade, you can lose it for good.

“What ends up happening in the flat world you described,” explained Paul, “is that you have only one opportunity to make it right if something [goes] wrong. Because the disadvantage of being in a flat world is that despite all the nice engagements and stuff and the exit barriers that you have, every customer has multiple options, and so the sense of responsibility you have is not just out of a desire to do good by your customers, but also a desire for self-preservation.”

The Indian government got the message. Was India's central place in the world's services supply chain the only factor in getting Prime Minister Vajpayee to tone down his rhetoric and step back from the brink? Of course not. There were other factors, to be sure-most notably the deterrent effect of Pakistan's own nuclear arsenal. But clearly, India's role in global services was an important additional source of restraint on its behavior, and it was taken into account by New Delhi. “I think it sobered a lot of people,” said Jerry Rao, who, as noted earlier, heads the Indian high-tech trade association. “We engaged very seriously, and we tried to make the point that this was very bad for Indian business. It was very bad for the Indian economy... [Many people] didn't realize till then how suddenly we had become integrated into the rest of the world. We are now partners in a twenty-four by seven by three-sixty-five supply chain.”

Vivek Kulkami, then information technology secretary for Bangalore's regional government, told me back in 2002, “We don't get involved in politics, but we did bring to the government's attention the problems the Indian IT industry might face if there were a war.” And this was an altogether new factor for New Delhi to take into consideration. “Ten years ago, [a lobby of IT ministers from different Indian states] never existed,” said Kulkarni. Now it is one of the most important business lobbies in India and a coalition that no Indian government can ignore.

“With all due respect, the McDonald's [shutting] down doesn't hurt anything,” said Vivek Paul, “but if Wipro had to shut down we would affect the day-to-day operations of many, many companies.” No one would answer the phones in call centers. Many e-commerce sites that are supported from Bangalore would shut down. Many major companies that rely on India to maintain their key computer applications or handle their human resources departments or billings would seize up. And these companies did not want to find alternatives, said Paul. Switching is very difficult, because taking over mission-critical day-to-day backroom operations of a global company takes a great deal of training and experience. It's not like opening a fast-food restaurant. That was why, said Paul, Wipro's clients were telling him, “'I have made an investment in you. I need you to be very responsible with the trust I have reposed in you.' And I think that created an enormous amount of back pressure on us that said we have to act in a responsible fashion... All of a sudden it became even clearer that there's more to gain by economic gains than by geopolitical gains. [We had more to gain from building] a vibrant, richer middle class able to create an export industry than we possibly could by having an ego-satisfying war with Pakistan.” The Indian government also looked around and realized that the vast majority of India's billion people were saying, “I want a better future, not more territory.” Over and over again, when I asked young Indians working at call centers how they felt about Kashmir or a war with Pakistan, they waved me off with the same answer: “We have better things to do.” And they do. America needs to keep this in mind as it weighs its overall approach to outsourcing. I would never advocate shipping some American's job overseas just so it will keep Indians and Pakistanis at peace with each other. But I would say that to the extent that this process happens, driven by its own internal economic logic, it will have a net positive geopolitical effect. It will absolutely make the world safer for American kids.

Each of the Indian business leaders I interviewed noted that in the event of some outrageous act of terrorism or aggression from Pakistan, India would do whatever it takes to defend itself, and they would be the first to support that-the Dell Theory be damned. Sometimes war is unavoidable. It is imposed on you by the reckless behavior of others, and you have to just pay the price. But the more India and, one hopes, soon Pakistan get enmeshed in global service supply chains, the greater disincentive they have to fight anything but a border skirmish or a war of words.

The example of the 2002 India-Pakistan nuclear crisis at least gives us some hope. That cease-fire was brought to us not by General Powell but by General Electric.

We bring good things to life.

Infosys Versus al-Qaeda

Unfortunately, even GE can do only so much. Because, alas, a new source for geopolitical instability has emerged only in recent years, for which even the updated Dell Theory can provide no restraint. It is the emergence of mutant global supply chains -that is, nonstate actors, be they criminals or terrorists, who learn to use all the elements of the flat world to advance a highly destabilizing, even nihilistic agenda. I first started thinking about this when Nandan Nilekani, the Infosys CEO, was giving me that tour I referred to in Chapter 1 of his company's global videoconferencing center at its Bangalore headquarters. As Nandan explained to me how Infosys could get its global supply chain together at once for a virtual conference in that room, a thought popped into my head: Who else uses open-sourcing and supply-chaining so imaginatively? The answer, of course, is al-Qaeda.

Al-Qaeda has learned to use many of the same instruments for global collaboration that Infosys uses, but instead of producing products and profits with them, it has produced mayhem and murder. This is a particularly difficult problem. In fact, it may be the most vexing geopolitical problem for flat-world countries that want to focus on the future. The flat world-unfortunately-is a friend of both Infosys and al-Qaeda. The Dell Theory will not work at all against these informal Islamo-Leninist terror networks, because they are not a state with a population that will hold its leaders accountable or with a domestic business lobby that might restrain them. These mutant global supply chains are formed for the purpose of destruction, not profit. They don't need investors, only recruits, donors, and victims. Yet these mobile, self-financing mutant supply chains use all the tools of collaboration offered by the flat world-open-sourcing to raise money, to recruit followers, and to stimulate and disseminate ideas; outsourcing to train recruits; and supply-chaining to distribute the tools and the suicide bombers to undertake operations. The U.S. Central Command has a name for this whole underground network: the Virtual Caliphate. And its leaders and innovators understand the flat world almost as well as Wal-Mart, Dell, and Infosys do.

In the previous chapter, I tried to explain that you cannot understand the rise of al-Qaeda emotionally and politically without reference to the flattening of the world. What I am arguing here is that you cannot understand the rise of al-Qaeda technically without reference to the flattening of the world, either. Globalization in general has been al-Qaeda's friend in that it has helped to solidify a revival of Muslim identity and solidarity, with Muslims in one country much better able to see and sympathize with the struggles of their brethren in another country-thanks to the Internet and satellite television. At the same time, as pointed out in the previous chapter, this flattening process has intensified the feelings of humiliation in some quarters of the Muslim world over the fact that civilizations to which the Muslim world once felt superior-Hindus, Jews, Christians, Chinese—are now all doing better than many Muslim countries, and everyone can see it. The flattening of the world has also led to more urbanization and large-scale immigration to the West of many of these young, unemployed, frustrated Arab-Muslim males, while simultaneously making it much easier for informal open-source networks of these young men to form, operate, and interconnect. This certainly has been a boon for underground extremist Muslim political groups. There has been a proliferation of these informal mutual supply chains throughout the Arab-Muslim world today-small networks of people who move money through hawalas (hand-to-hand financing networks), who recruit through alternative education systems like the madrassas, and who communicate through the Internet and other tools of the global information revolution. Think about it: A century ago, anarchists were limited in their ability to communicate and collaborate with one another, to find sympathizers, and to band together for an operation. Today, with the Internet, that is not a problem. Today even the Unabomber could find friends to join a consortium where his “strengths” could be magnified and reinforced by others who had just as warped a worldview as he did.

What we have witnessed in Iraq is an even more perverse mutation of this mutant supply chain-the suicide supply chain. Since the start of the U.S. invasion in March 2002, more than two hundred suicide bombers have been recruited from within Iraq and from across the Muslim world, brought to the Iraqi front by some underground railroad, connected with the bomb makers there, and then dispatched against U.S. and Iraqi targets according to whatever suits the daily tactical needs of the insurgent Islamist forces in Iraq. I can understand, but not accept, the notion that more than thirty-seven years of Israeli occupation of the West Bank might have driven some Palestinians into a suicidal rage. But the American occupation of Iraq was only a few months old before it started to get hit by this suicide supply chain. How do you recruit so many young men “off the shelf” who are ready to commit suicide in the cause of jihad, many of them apparently not even Iraqis? And they don't even identify themselves by name or want to get credit-at least in this world. The fact is that Western intelligence agencies have no clue how this underground suicide supply chain, which seems to have an infinite pool of recruits to draw on, works, and yet it has basically stymied the U.S. armed forces in Iraq. From what we do know, though, this Virtual Caliphate works just like the supply chains I described earlier. Just as you take an item off the shelf in a discount store in Birmingham and another one is immediately made in Beijing, so the retailers of suicide deploy a human bomber in Baghdad and another one is immediately recruited and indoctrinated in Beirut. To the extent that this tactic spreads, it will require a major rethinking of U.S. military doctrine.

The flat world has also been such a huge boon for al-Qaeda and its ilk because of the way it enables the small to act big, and the way it enables small acts-the killing of just a few people-to have big effects. The horrific video of the beheading of Wall Street Journal reporter Danny Pearl by Islamist militants in Pakistan was transmitted by the Internet all over the world. There is not a journalist anywhere who saw or even just read about that who was not terrified. But those same beheading videos are also used as tools of recruitment. The flat world makes it much easier for terrorists to transmit their terror. With the Internet they don't even have to go through Western or Arab news organizations but can broadcast right into your computer. It takes much less dynamite to transmit so much more anxiety. Just as the U.S. Army had embedded journalists, so the suicide supply chain has embedded terrorists, in their own way, to tell us their side of the story. How many times have I gotten up in the morning, fired up the Internet, and been confronted by the video image of some masked gunman threatening to behead an American-all brought to me courtesy of AOL's home page? The Internet is an enormously useful tool for the dissemination of propaganda, conspiracy theories, and plain old untruths, because it combines a huge reach with a patina of technology that makes anything on the Internet somehow more believable. How many times have you heard someone say, “But I read it on the Internet,” as if that should end the argument? In fact, the Internet can make things worse. It often leads to more people being exposed to crazy conspiracy theories.

“The new system of diffusion-the Internet-is more likely to transmit irrationality than rationality,” said political theorist Yaron Ezrahi, who specializes in the interaction between media and politics. “Because irrationality is more emotionally loaded, it requires less knowledge, it explains more to more people, it goes down easier.” That is why conspiracy theories are so rife in the Arab-Muslim world today-and unfortunately are becoming so in many quarters of the Western world, for that matter. Conspiracy theories are like a drug that goes right into your bloodstream, enabling you to see “the Light.” And the Internet is the needle. Young people used to have to take LSD to escape. Now they just go online. Now you don't shoot up, you download. You download the precise point of view that speaks to all your own biases. And the flat world makes it all so much easier.

Gabriel Weimann, a professor of communication at Haifa University, Israel, did an incisive study of terrorists' use of the Internet and of what I call the flat world, which was published in March 2004 by the United States Institute of Peace and excerpted on YaleGlobal Online on April 26, 2004. He made the following points:

While the danger that cyber-terrorism poses to the Internet is frequently debated, surprisingly little is known about the threat posed by terrorists' use of the Internet. A recent six-year-long study shows that terrorist organizations and their supporters have been using all of the tools that the Internet offers to recruit supporters, raise funds, and launch a worldwide campaign of fear. It is also clear that to combat terrorism effectively, mere suppression of their Internet tools is not enough. Our scan of the Internet in 2003-04 revealed the existence of hundreds of websites serving terrorists in different, albeit sometimes overlapping, ways... There are countless examples of how [terrorists] use this uncensored medium to spread disinformation, to deliver threats intended to instill fear and helplessness, and to disseminate horrific images of recent actions. Since September 11, 2001, al-Qaeda has festooned its websites with a string of announcements of an impending “large attack” on US targets. These warnings have received considerable media coverage, which has helped to generate a widespread sense of dread and insecurity among audiences throughout the world and especially within the United States...

The Internet has significantly expanded the opportunities for terrorists to secure publicity. Until the advent of the Internet, terrorists' hopes of winning publicity for their causes and activities depended on attracting the attention of television, radio, or the print media. The fact that terrorists themselves have direct control over the content of their websites offers further opportunities to shape how they are perceived by different target audiences and to manipulate their image and the images of their enemies. Most terrorist sites do not celebrate their violent activities. Instead— regardless of their nature, motives, or location-most terrorist sites emphasize two issues: the restrictions placed on freedom of expression; and the plight of their comrades who are now political prisoners. These issues resonate powerfully with their own supporters and are also calculated to elicit sympathy from Western audiences that cherish freedom of expression and frown on measures to silence political opposition...

Terrorists have proven not only skillful at online marketing but also adept at mining the data offered by the billion-some pages of the World Wide Web. They can learn from the Internet about the schedules and locations of targets such as transportation facilities, nuclear power plants, public buildings, airports and ports, and even counterterrorism measures. According to Secretary of Defense Donald Rumsfeld, an al-Qaeda training manual recovered in Afghanistan tells its readers, “Using public sources openly and without resorting to illegal means, it is possible to gather at least 80 percent of all information required about the enemy.” One captured al-Qaeda computer contained engineering and structural architecture features of a dam, which had been downloaded from the Internet and which would enable al-Qaeda engineers and planners to simulate catastrophic failures. In other captured computers, U.S. investigators found evidence that al-Qaeda operators spent time on sites that offer software and programming instructions for the digital switches that run power, water, transportation, and communications grids.

Like many other political organizations, terrorist groups use the Internet to raise funds. Al-Qaeda, for instance, has always depended heavily on donations, and its global fundraising network is built upon a foundation of charities, nongovernmental organizations, and other financial institutions that use websites and Internet-based chat rooms and forums. The fighters in the Russian breakaway republic of Chechnya have likewise used the Internet to publicize the numbers of bank accounts to which sympathizers can contribute. And in December 2001, the U.S. government seized the assets of a Texas-based charity because of its ties to Hamas.

In addition to soliciting financial aid online, terrorists recruit converts by using the full panoply of website technologies (audio, digital video, etc.) to enhance the presentation of their message. And like commercial sites that track visitors to develop consumer profiles, terrorist organizations capture information about the users who browse their websites. Visitors who seem most interested in the organization's cause or well suited to carrying out its work are then contacted. Recruiters may also use more interactive Internet technology to roam online chat rooms and cyber cafes, looking for receptive members of the public, particularly young people. The SITE Institute, a Washington, D.C.-based terrorism research group that monitors al-Qaeda's Internet communications, has provided chilling details of a high-tech recruitment drive launched in 2003 to recruit fighters to travel to Iraq and attack U.S. and coalition forces there. The Internet also grants terrorists a cheap and efficient means of networking. Many terrorist groups, among them Hamas and al-Qaeda, have undergone a transformation from strictly hierarchical organizations with designated leaders to affiliations of semi-independent cells that have no single commanding hierarchy. Through the Internet, these loosely interconnected groups are able to maintain contact with one another-and with members of other terrorist groups. The Internet connects not only members of the same terrorist organizations but also members of different groups. For instance, dozens of sites supporting terrorism in the name of jihad permit terrorists in places as far-removed from one another as Chechnya and Malaysia to exchange ideas and practical information about how to build bombs, establish terror cells, and carry out attacks... Al-Qaeda operatives relied heavily on the Internet in planning and coordinating the September 11 attacks.

For all of these reasons we are just at the beginning of understanding the geopolitical impact of the flattening of the world. On the one hand, failed states and failed regions are places we have every incentive to avoid today. They offer no economic opportunity and there is no Soviet Union out there competing with us for influence over such countries. On the other hand, there may be nothing more dangerous today than a failed state with broadband capability. That is, even failed states tend to have telecommunications systems and satellite links, and therefore if a terrorist group infiltrates a failed state, as al-Qaeda did with Afghanistan, it can amplify its power enormously. As much as big powers want to stay away from such states, they may feel compelled to get even more deeply embroiled in them. Think of America in Afghanistan and Iraq, Russia in Chechnya, Australia in East Timor.

In the flat world it is much more difficult to hide, but much easier to get connected. “Think of Mao at the beginning of the Chinese communist revolution,” remarked Michael Mandelbaum, the Johns Hopkins foreign policy specialist. “The Chinese Communists had to hide in caves in northwest China, but they could move around in whatever territory they were able to control. Bin Laden, by contrast, can't show his face, but he can reach every household in the world, thanks to the Internet.” Bin Laden cannot capture any territory but he can capture the imagination of millions of people. And he has, broadcasting right into American living rooms on the eve of the 2004 presidential election.

Hell hath no fury like a terrorist with a satellite dish and an interactive Web site.

Too Personally Insecure

In the fall of 2004,1 was invited to speak at a synagogue in Woodstock, New York, home of the famous Woodstock music festival. I asked my hosts how was it that they were able to get a synagogue in Woodstock, of all places, big enough to support a lecture series. Very simple, they said. Since 9/11, Jews, and others, have been moving from New York City to places like Woodstock, to get away from what they fear will be the next ground zero. Right now this trend is a trickle, but it would become a torrent if a nuclear device were detonated in any European or American city.

Since this threat is the mother of all unflatteners, this book would not be complete without a discussion of it. We can live with a lot. We lived through 9/11. But we cannot live with nuclear terrorism. That would un-flatten the world permanently.

The only reason that Osama bin Laden did not use a nuclear device on 9/11 was not that he did not have the intention but that he did not have the capability. And since the Dell Theory offers no hope of restraining the suicide supply chains, the only strategy we have is to limit their worst capabilities. That means a much more serious global effort to stanch nuclear proliferation by limiting the supply-to buy up the fissile material that is already out there, particularly in the former Soviet Union, and prevent more states from going nuclear. Harvard University international affairs expert Graham Allison, in his book Nuclear Terrorism: The Ultimate Preventable Catastrophe, outlines just such a strategy for denying terrorists access to nuclear weapons and nuclear materials. It can be done, he insists. It is a challenge to our will and convictions, but not to our capabilities. Allison proposes a new American-led international security order to deal with this problem based on what he calls “a doctrine of the Three No's: No loose nukes, No new nascent nukes, and No new nuclear states.” No loose nukes, says Allison, means locking down all nuclear weapons and all nuclear material from which bombs could be made-in a much more serious way than we have done up till now. “We don't lose gold from Fort Knox,” says Allison. “Russia doesn't lose treasures from the Kremlin armory. So we both know how to prevent theft of those things that are super valuable to us if we are determined to do it.” No new nascent nukes means recognizing that there is a group of actors out there who can and do produce highly enriched uranium or plutonium, which is nothing more than nuclear bombs just about to hatch. We need a much more credible, multilateral nonprolif-eration regime that soaks up this fissile material. Finally, no new nuclear states means “drawing a line under the current eight nuclear powers and determining that, however unfair and unreasonable it may be, that club will have no more members than those eight,” says Allison, adding that these three steps might then buy us time to develop a more formal, sustainable, internationally approved regime.

It would be nice also to be able to deny the Internet to al-Qaeda and its ilk, but that, alas, is impossible-without undermining ourselves. That is why limiting their capabilities is necessary but not sufficient. We also have to find a way to get at their worst intentions. If we are not going to shut down the Internet and all the other creative and collaborative tools that have flattened the world, and if we can't restrict access to them, the only thing we can do is try to influence the imagination and intentions that people bring to them and draw from them. When I raised this issue, and the broad themes of this book, with my religious teacher, Rabbi Tzvi Marx from Holland, he surprised me by saying that the flat world I was describing reminded him of the story of the Tower of Babel.

How so? I asked. “The reason God banished all the people from the Tower of Babel and made them all speak different languages was not because he did not want them to collaborate per se,” answered Rabbi Marx. “It was because he was enraged at what they were collaborating on-an effort to build a tower to the heavens so they could become God.” This was a distortion of the human capacity, so God broke their union and their ability to communicate with one another. Now, all these years later, humankind has again created a new platform for more people from more places to communicate and collaborate with less friction and more ease than ever: the Internet. Would God see the Internet as heresy?

“Absolutely not,” said Marx. “The heresy is not that mankind works together-it is to what ends. It is essential that we use this new ability to communicate and collaborate for the right ends-for constructive human aims and not megalomaniacal ends. Building a tower was megalo-maniacal. Bin Laden's insistence that he has the truth and can flatten anyone else's tower who doesn't heed him is megalomaniacal. Collaborating so mankind can achieve its full potential is God's hope.”

How we promote more of that kind of collaboration is what the final chapter is all about.