Network technologies have not only served to harmonize the world by fostering economic transactions–as Thomas Friedman argues in his book, The World is Flat (2004); as importantly, these technologies have functioned as media channels, providing a vehicle for promoting a common set of economic ideologies and business practices, which have helped sustain these global transactions. Friedman argues that, in a flat world in which all countries are operating on an equal playing field, the United States must become more competitive by enhancing its own human resources. A good principle, for sure.

However, what Friedman fails to take into account is that a flat world may–on its own account–be unsustainable over the long run!

However, what Friedman fails to take into account is that a flat world may–on its own account–be unsustainable over the long run!

When considering the shape of the world today, it is important to remember that the structure of information flows–and hence ideas and ideology–is anything but flat. To the contrary, it is decidedly asymmetrical. In fact, as Joseph Stiglitz has argued in Globalization and its Discontents (2002), the US, together with its allies in the IMF, and to a lesser extent the World Bank, have acted in a typically hegemonic fashion, employing their dominance of world-wide communication networks (both institutional as well as technological) to create precisely the same flat world that Friedman describes. Characterizing the negative impacts of the IMF’s policies, Stiglitz points out that the greatest mistake the world financial leaders made in response to the 1980 debt crisis was to unquestioningly adhere to their own economic fundamentalism, notwithstanding its failures, and to insist that one size–that is to say the Washington Consensus–fits all.

the greatest mistake the world financial leaders made… was to insist that one size–that is to say, the Washington Consensus–fits all.

Like Stiglitz, the evolutionary economist Geoffrey M. Hodgson takes issue with the notion that capitalist systems will converge. Pointing to the stickiness of cultural aspects of economic behavior (which he defines as the impurity principle), Hodgson argues that diversity in the global economy is likely to persist (Hodgson et al, 2001, chapter five). In fact, as he contends, just as in the biological world, such variation is essential for survival. For, if, as Friedman suggests, the world is really flat, where can we look for alternative, adaptive strategies in the event of major economic shocks and upheavals in our environment.

For if, as Friedman suggests, the world is really flat, where can we look for alternative, adaptive strategies in the event of major economic shocks and upheavals in our environment.

The rapid spread of the global financial crisis, from one nation to the next, provides one illustration of some of the dangers inherent in an increasingly flat world. Of course, it is still far too early to anticipate how extensive the damage will be. However, the crisis itself provides essential and long-needed feedback about the dangers of pursuing a singular approach, especially if it is wrong. As the leaders of the world meet to develop strategies to address the present financial crisis, the mistakes of the 1980′s debt crisis should not be repeated. All voices need to be heard, and a variety of approaches (insofar as they are congruent with one another) should be tolerated.

On Technorati: evolutionary economics, Geoffrey Hodgson, global economic crisis, Joseph Stiglitz, The World is Flat, Thomas Friedman, Washington Consensus