Those left behind will put walls back…that’s why you can’t be a globaliser without being a social democrat

• In fact, your latest book begins there.

It all really happened by accident. We were there shooting for a documentary for Discovery in February 2004 and I had been off covering the 9/11 world. And I took a break to come to India and do a story about outsourcing. Because in the middle of the political campaign, John Kerry said that American executives who outsource are Benedict Arnolds. So, we decided to come to Bangalore and look at outsourcing from the other side, from the Indian side.

• They were complaining of being Bangalored.

Exactly. That’s right. So, we came to Bangalore and in the course of 10 days, we shot about 60 hours of film and I got sicker and sicker each day.

• Why so?

Well, it wasn’t the food. It was somewhere between the Indian entrepreneur who wanted to do my taxes from Bangalore and the one who offered to read my X-rays from Bangalore and the one who wanted to trace my lost luggage from Delta Airlines from Bangalore. And I realised that while I was sleeping, while I had been off covering the 9/11 wars, something really big had happened in this globalisation story and I had missed it. The last interview we had done was with Nandan Nilekani, the CEO of Infosys. We were sitting on the couch outside his office and the camera wasn’t running at that time and Nandan said to me, ‘Tom, I’ve got to tell you something, the global economic playing field is being levelled. And you Americans are not quite ready.’ I wrote that down in my notebook and on my ride back to the hotel, I kept thinking about what Nandan had said. I realised what he was telling me was that the playing field is being flattened. And then it hit me, somewhere between his office and the Leela Hotel, ‘Oh my God, he’s telling me that the world is flat’.

• So, it’s the first time a best-seller had its title outsourced.

Exactly right, exactly right.

• And to Bangalore, where else?

And to Bangalore and I went back to the hotel and I told my wife, I said: ‘Honey, I’m going to write a book and I’m going to call it The world is flat.’ She thought I was stark, raving mad. But I came home and I told my editors, ‘Stop. I need to update my software. Something really big has happened in the world and Bangalore symbolises it. It’s the creation of the global economic platform that has really levelled the playing field that most people can play on like never before and I need to understand that’.

• Earlier, in The Lexus and The Olive Tree, you talked about nations wearing the golden straitjacket and now you are saying this straitjacket is becoming so big that it’s submerging many nations.

Not just nations. Globalisation 1.0, that was from 1492 until about 1800, that was about nations. In that year, you went global through your country like Spain expanding and British colonisation of India, and that year from 1492 to 1800, globalisation shrunk the world from size large to size medium. The second year, Globalisation 2.0., was from 1800 to 2000, that shrunk the world from size medium to size small. In the second year, you go global through your company. You are multinational, searching for markets and for labour. And what I realised, on this trip to Bangalore, was that we are in Globalisation 3.0, from 2000 to the present and that is shrinking the world’s size from small to tiny and levelling the playing field…The new thing about this year of globalisation is the degree to which it is being built around individuals. And small groups can now go global.

• Not countries, not corporations.

Individuals and small groups. That’s the new-new thing. Whether it’s bloggers with their own individual newspapers, or entrepreneurs with their own small companies. It’s the degree to which individuals can go global and as I tell my American audiences, ‘Pay attention, it ain’t going to be just a bunch of white Western individuals who dominated Globalisation 1.0 and 2.0. In 3.0, it’s going to be individuals of every colour of the rainbow who are going to plug and play. That’s the new thing’.

• So, the world is moved on from The Lexus and The Olive Tree.

It has. That was 2.0. Now, we are in 3.0. And it’s a flat platform.

• Tell me where did that delightful title come from The Lexus and The Olive Tree?

I was actually visiting Japan in 1995 and I went to the Lexus factory in Toyota City and I watched with amazement these robots putting the Lexus together, the cutting-edge car at the time. And I got out of the factory and I took the bullet train to go back to Tokyo and I picked up the Herald Tribune and on Page 3, there was a story (where) a State Department (official) was being criticised for some interpretation she gave to the UN resolution about Israel-Palestine and basically it hit me that I’ve just come from the Lexus factory where Japan is putting together its latest new car with robots and here are these people on page 3, whom I know so well, whom I lived with for so long, are still fighting over who owns which olive tree. And isn’t that the post-Cold War world? Where half of us are trying to build a better Lexus and half of us are still clinging to our olive tree.

• In fact, one anecdote I remember, it’s when you were swimming in the pool at the Oberoi and the day before India had tested its nuclear weapons. And you thought people will say what has our government done but they were so proud of it and your view was that this is the olive tree.

Olive trees are nation, religion, family, community. Olive trees are really, really important. The trick in globalisation is to keep your olive trees in balance with your Lexus.

• Olive tree as a metaphor and in real life is more accessible to the people than a Lexus. Lexus by its very definition is very exclusivist. So, is globalisation exclusivist? Critics say that.

Yes. There’s no question that globalisation makes the rich, richer…those who access it. But what’s so exciting is that how many people in India and China have grown out of poverty, thanks to globalisation. We have seen more people being lifted from the lower classes into the lower-middle classes in these years than in the history of the world. So, it can work for everybody. So, the job of the government, that’s what Dr Singh’s government is trying to figure out, is to see how to bring that platform to more people. How to bring more people into the flat world.

• That’s a peculiar equation. He started out as a socialist, now a reformer. In 1991, he opened India to the world but now he’s running a government with the Communists, who are suspicious of the word globalisation. You have met Dr Singh, what’s your view on him?

My view on him is he totally gets it. He gets both the Lexus and the olive tree and he understands the need to keep them in balance and keep moving forward. And that’s really critical…I just came from Europe, France just rejected globalisation by voting against EU constitution. So, in one day I feel like I went from Europe with French saying ‘Stop the world, I wanna get off’ to India where people are saying ‘Stop the world, I wanna get on, I just need a ladder’. And what I think Prime Minister Singh’s government is trying to do is provide that ladder to get more Indians into globalisation because only if more Indians have access to the flatter world will it be stable and sustainable. The scary thing for Europe, when I come to India, Europe is trying to preserve the 35-hour week, India has invented a 35-hour day and in a flat world where people here want to work 35 hours a day and people there only want to work 35 hours a week, when these two energies meet, it’s going to be a very interesting explosion.

• The guys who want to work less are the ones who have money.

Exactly. They want to take it easy.

• You can get them to spend it now.

Exactly.

• As the debate evolves in India about reform and globalisation, one expression that Dr Singh and his party used was ‘reform with a human face’ and then they dropped it. Because reform by definition does not have a human face. When I read your writings, you say that you cannot be globaliser unless you are a social democrat. You have to take everybody along. Not easy.

I was saying in my new book, it’s not original to me, that if you want to live like a Republican in America, vote like a Democrat.

• That is the way you vote I suspect.

That’s the way I vote. People say there’s the market way and there’s the safety net way and there’s the third way. I say, no, there’s no third way. There’s only the third way and that is some kind of balance between market forces and safety net. I think Tony Blair’s government in Great Britain has found a pretty good balance between opening the economy, keeping it going forward. Only 4 per cent unemployment and investing in hospitals, education and safety nets. Not perfect but they have got a sustainable balance. That’s why I’m a Blair Democrat.

• So, new labour is the way.

That’s right. New Labour is the way.

• One idea of yours I really like and which I think the Left here will pick up—The Rapid Change Opportunity Act.

I believe that with any kind of rapid change we have to cushion it with any kinds of social safety nets and programmes that will bring people on. I actually lay out my whole philosophy in my new book now, I call it compassionate flatism. I’m a compassionate flatist.

• So, this whole Republican idea that globalisation has to be ruthless, you have to ride roughshod over those who lose out in the process and at the end of the day it’ll all be happy.

No, they’ll not all be happy because at the end of the day, we are going into a level of globalisation where it’s gonna touch workers. These are people who vote. And write out their articles for The New York Times and The Indian Express. They can stop this if we don’t take their concerns into account. We have to listen to those people. When you are unemployed, your unemployment rate is not 5 per cent, it’s a 100 per cent, for yourself. And as we go through this churning, that I call the flattening of the world, we have got to be aware of that. But on this flat platform, I argue, wealth is going into those countries, those companies, those individuals who understand this platform and can figure out a way of how to use it best for their country, company or individual.

• And you are willing to share their wealth.

Exactly, that is a big part of it.

• And you share the wealth with those who will not pay back immediately.

Because otherwise it’s not sustainable. And I have another motto and that is that if you don’t visit a bad neighbourhood in a flat world, it will visit you. We learnt that with 9/11. And the flat world is for Infosys and IBM and Microsoft. All of them are playing of the same platform now.

• And leaders who don’t have the intellect to understand this complexity will be in trouble then. Like Bush is right now.

I think so. Bush has not got the right balance for this going forward. And as a country, we are doing okay. We are growing reasonable on employment. But I feel that my administration is trying to take part in a new deal and what we need right now is a new-new deal to enable, encourage and empower the Americans to succeed in the new flat world.

• This is what critics can’t square with. From the Tom Friedman who so strongly pushed for the regime change in Iraq, to the Friedman who wanted Rumsfeld’s resignation after Iraq abuse, and who’s now talking about shutting down Guantanamo Bay. So, how do you explain that or justify that.

People said there can be only two positions on the Iraq war. You can be for the war and therefore be for everything that the Bush administration does. And you can be against the war and be against everything that the Bush administration does. I said wait a minute, there’s another position also and that’s because I’m confused. If you are for the war but believe that the administration has made certain mistakes along the way and you want to use your column for pointing that out. So, I believe that it is critical, I’m a Liberal-Hawk. I belong to a very small group of Liberal-Hawks and it has got smaller by the years.

• And our Foreign Minister who hosted you a dinner. He was once asked if he was a hawk or a dove and he said ‘I’m a diplomat, I don’t run a bird sanctuary’.

I like that. In fact, that’s why I’m a Blair Democrat. I believe that power should be used today, in certain cases to expand freedom. At the same time, to be Liberal today also means to be pro-globalisation. But, a globalisation with a human face.

• On the other hand, anti-globalisation always becomes synonymous with anti-Americanism. Like in new York, one placard would say ‘Down with Bush’ and the other would say ‘Down with globalisation’.

Exactly. I think the anti-globalisation movement is the coalition to keep poor people poor. If India would have paid attention to anti-globalisation, they would never have had the reforms of 1991. Is there anyone here today who thinks that India is worse off today than before making that change?

• I call this crowd, the Povertarians. Their principle is poverty is my birth right and you can have it.

That is wonderful. Who want to share their poverty with others. And look at all the potential that has been unlocked here. And that doesn’t mean that the government has to wither away. We still need the government for a lot of things—for regulation, for social protection and safety nets—but the basic impulse of 1991 was right. And we listen to those people, we do wrong.

• But you also say, for globalisation to work, America has to be at its best. What does it mean?

What it means is that we are the most important example that people look to. When we say that ‘Look there’s a war on terrorism and you are with us or against us’. But a word for a greener planet, a word against global warming, ‘Sorry buddy, you are on your own. I will drive my SUV’. That’s not on. There’s no way we can ask the world to follow us in the war on terrorism and then we say to everybody else we are just going to do what we feel like doing.

• Because that sounds like Imperialism and that just gives a anti-globaliser another argument, they say globalisation is American-domination.

It’s worse for me than Imperialism. And when you have the resources that we have and the ability to lead that we have and if we make global warming our agenda, the impact that it’ll have all over the world, that for me is worse than imperialism, it’s selfishness and that is terrible thing for a power like ours to have.

• And what is the mood in America. You think people are figuring it out or they are still blinded by the combination of insecurity, anger, religion?

We are moving into the post-9/11 mood, I would argue, in America and there is a lot of angst right now. About Iraq—where it’s going, competition, education. I tell my kids, when I was young my parents used to tell me, ‘Tom, finish your dinner, people in India and China are starving’.’ What I tell my girls today is ‘Girls, finish your homework because people in India and China are starving for your jobs and in a flat world, they can have it’.

• And how fascinating, you brought your daughter along with you and she’s now going to teach here.

Yes, she’s going to teach in a village school outside of Bangalore. I am re-exporting my daughter because I want her to experience the country that I enjoy so much and also because it will help her to be a globaliser with a human face.

• I can’t let you go without explaining your most fascinating theory of all times, your Golden Arches theory of conflict prevention.

Well, the Golden Arches theory is now updated. The Golden Arches theory said that no two countries having McDonalds have ever fought a war since each got a McDonalds.

• India and Pakistan have each got a McDonalds.

So I’m not worried about India and Pakistan anymore. Although when I wrote it, Pakistan didn’t have a McDonalds. In my new book, it’s now called the Dell theory. For Dell computers. And the Dell theory says that no two countries that are part of the same global supply chain will ever fight a war as long as they are part of the same supply chain. So, let me tell you how I established this theory. Michael Dell asked me if I could come down and talk his people about my new book. And I said I would be happy to but I want to be paid. And here’s what I want to be paid—I wrote my book on a Dell notebook serial No 9PQZ84 and I said I want Dell to trace every part in my computer, where it came from, including the names of the people who assembled it. And I used that supply chain to tell the story of the huge global supply chain that was used to build my computer. There were 400 different suppliers and 30 key parts that came from at least 30 different countries. And when people have that kind of a supply chain they have a much greater inter-dependence.

• Ten to 15 years from now, when both us are grandfathers, how do you see the world? Where do you see India, America, China?

I very strongly believe that these flattening forces are very powerful but they are not inextricable and to think that they can really upset it, there are two things, one is energy. If we don’t find the alternate sources of energy because we are all in the flat world now, we all want the same things, the house, the car, we really need to find the alternate source of energy. That could really upset the flat world. The second thing that could upset it is that if we don’t bring all those people into Bangalore—they have seen the lights, they have seen the commercials, they want to be there—so we have to give them a stepping stone to get into the flat world. If we do that then all those who want to live like Republicans and vote like Democrats can enjoy that lifestyle but only if they share it.

• On the other hand, if you have the flattening growing only in some areas and you build a critical mass of those who get left behind, then they will stop you.

Absolutely. They will put the walls back and that’s why I said you cannot be a globaliser without being a social democrat. And that’s why I say I’m a Blair Democrat.

• Well, there’s no such thing as a perfect world as Blair himself discovered. Voters are hard to please. But I hope the movement is in the right direction.

I think India is going in the right direction and if India were a stock, I would buy it.