Small, not flat

Froomkin has a very nice post on what it means to pay for college. As I watch another cadre of students enter the working world burdened by crushing student loans–even public university school loans are crushing–it strikes me that it is an unsupportable system for both students and academics. In my ideal school, students attend for free, but pay back 3% of their annual earnings for life. This frees students to do what they like when they graduate. I think it would be a particularly good model for professional (law, business, medicine) programs. But I’ll leave that aside for the moment.

In introducing this, he points to an outstanding review of The World Is Flat, written by Edward Leamer for the Journal of Economic Literature (pdf). If you’ve taken the time to read TWIF, you should absolutely take the time to read this review, which makes for entertaining and interesting skewering.

It doesn’t do it justice, but the upshot is this: flatness depends a lot on where you are standing. As with the last round of rosy predictions (e.g., The Long Boom), TWIF misses the forest for the trees. So yes, there are great stories of how Google Adwords feeds a family of four in India, and if you talk to people (as Friedman does) who have benefited from some of the shifts in the global economy over the last few decades, you are likely to find a large number of similar examples. But such anecdotes are the exceptions rather than the rule.

I have a terrible metaphor I use with students when I talk about the “Information Revolution,” and what is really revolving. Think of a very large wave, and a lot of stuff out on the water. (This metaphor works better in California than in land-locked states, I suspect.) Each wave that rolls in is, indeed, hugely powerful. But the fact is that it seems to raise and lower the flotsam and jetsam equally, perhaps providing a bit of minor jostling here and there. The rare exception to this is the person or thing that hits a wave at just the right point to be carried along. That is, the person or thing that manages to exploit a momentary fisure in the social structure.

Naturally, you are going to say “Oooh. There goes Bill Gates” as he becomes one of the richest men in the world based on a snippet of wisely purchased (or pilfered, depending on your source) snippet of code. The natural assumption is that while he may be the most extreme example, some scaled version of this is happening all the way down. If you look at the shift in occupations over the last century in the US, you get a similar impression: we’re all mini-Gateses.

But in practice, the window Gates exploited has already closed. The opportunity for such changes come not in a flat world, any more than they come in a flat ocean. Rather they come in a “flattening” world. In a flat world, there are no such opportunities for seeking and seizing advantage.

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