The World Is Flat

Not sure anyone cares, but I thought I'd get back to posting some book reviews. It has been a while so I'll post some as I think of them.

Recently I listened to The World Is Flat. I was really impressed. I was actually surprised to hear such a reasonable discussion of the flattening of the world (globalization, outsourcing, and all that entails). Even if you are not in a field that has been affected by outsourcing there is a lot of good discussion of the many other affects of increased communication around the world.

The one thing that I thought was missing from the book is an interesting point I learned about in the IT and the US labor market class I took. The one thing that I never hear anyone talk about (other than one time on NPR) is the equalizing effect of currency exchange. If so much money is going to India and China then eventually the US dollar's value will drop relative to theirs and then the price of their labor will increase. Now of course even if it was a 2x affect outsourcing would still be quite inexpensive but it would take a big chunk out of the gains. There are two arguments I would imagine people would have with this. The first is why hasn't this already happened with China and Japan. Well that's because they have artificially kept it from happening by storing lots of dollars so eventually it will hit, but right now those countries are implementing policy to promote manufacturing in their countries. The other argument would be that having the value of the dollar drop is bad for US consumers. But outsourcing is good for US consumers so it doesn't really make sense to want to reduce or slow outsourcing, but be concerned for the US consumer.

Well now I'm done with that little rant. Anyway if you are looking for an interesting read The World is Flat is pretty good.