Is globalization dead? Author and columnist Thomas Friedman in conversation at Davos 2022

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Adrian Monck, Managing Director, World Economic Forum: Ladies and gentlemen, welcome. I think this is the most oversubscribed session in Davos. There are 135 people on the waiting list. So thank you for joining us and glad you got some seats. We are here to talk about something that Ray Dalio subscribes to, which is that globalization is dead with somebody who I think can probably challenge that opinion in a pretty convincing fashion.

It's a huge pleasure to have on the platform Tom Friedman, journalist, author, columnist and [...] the touchstone for commentary in the 21st century. So a great pleasure to have you with us, Tom, thanks for joining. And we've heard this from Ray. we've heard it from a number of business leaders, globalization has been crumpled up and thrown into the bin. Is it a little early to be dancing on the grave of globalization?

Thomas Friedman, Columnist, Foreign Affairs, The New York Times: Well, first of all, great to be with you, Adrian. Thanks for having me. I suspect ever since the first tree fell in a pathway used by Palaeolithic Homo sapiens, somebody wrote on a tablet 'Globalization is over'.

Here's a newsflash: people want to connect – it's wired into us. And the technology every month makes it easier to connect. Girls just want to have fun. Globalization is wired into us as human beings.

It is not linear, it's curvilinear – it goes up and down. But I have to tell you, just since I've been writing about it, Google after 9/11, globalization is over. What happened to globalization when people are flying planes into buildings? Google after 2008, globalization is over. The whole financial global economy melted, globalization is over.

So now we hear it again. You know, there's a library of books telling me the world is not flat, it's spiky, it's lumpy, it's curvy, it's jumpy. Get over it. Okay. If World War One didn't stop globalization, if World War Two didn't stop globalization, what makes you think the war between Ukraine and Russia is going to stop globalization when in fact it's actually the first world war, not World War One, not World War Two. This is the first world war. Two-thirds of the world's following it on a smartphone. So I just find the whole notion preposterous.

But let me drill down a little deeper and and explain why. And it's not like I have. Look, I just have to remind people – I didn't do this. I promise you. I just wrote a book about it, all right? And I wrote a book about it because I couldn't understand the world as a Foreign Affairs columnist without it. You know? I mean, now what I find is that the nature of journalism is such that if you say anything positive about anything, if you have any optimism bias about anything, you're treated as a utopian. I'm described as a techno-utopian!

I was just describing the conditions that were allowing globalization to take a different stage and my view is always it had upsides, it had downsides. And our job as the job of politics and geopolitics was to get the upside – more of the upside than the downside. But I do confess that when I see 800 million people grow out of poverty faster than any time in the history of the world, my heart does go a little pitter-patter. That does kind of float my boat a little bit, but for that you get called a techno utopian.

Now, if you're a pessimist and you've written umpteen times that globalization is over, nobody remembers that. Okay, so it's very dangerous to make any positive claim about the world and you're immediately turned into some dreamy, utopian.

Let me explain, though, what I think my contribution to the discussion was because we say globalization is over, first we have to say "What do you mean by globalization?" Do you mean global trade as a percent of global GDP? Do you mean telecommunications? Do you mean cargo travel in containers? Do you mean internet? And so to just say globalization is over, all of these are different aspects of globalization.

Now what the World is Flat was about... I'm actually not an economist at all. I've taken exactly one course in economics, introductory economics at Brandeis University in 1973. That's the only economics I know. And so when people accuse me of being a neoliberal, I also don't even know what that word means. It never even figured into my book. I wasn't making an economic argument. I'm not smart enough to do that.

What The World Is Flat was about was a very simple proposition. If you look at the sweep of history to act globally, historically, you needed to be a country. Spain discovering the new world, Vasco da Gama. Then beginning with the Dutch East India Company... Actually to act globally, you had to be a company at least or a country. What The World is Flat was about is that we had created a platform, a global economic platform, of technology and a set of rules that for the first time in history enabled individuals globally. That's what that was.

That was the core claim of the book. So I said, "the world is flat." I wasn't saying we're all equal. I wasn't saying, "Oh, borders are going to disappear." That is somebody else's book, not mine. Okay. What I was saying is something really big happened for the first time in history. You can now act globally. You can reach farther, faster, deeper, cheaper, in more ways and more days around more themes and subjects for less money than ever before as an individual. And that's what's new here.

And just to finish one last point while I get this rant off my chest. There are many things Vladimir Putin did not understand about the world. But the thing he understood least was globalization, because in a previous book to the World is Flat,

Lexus and the Olive Tree, I actually created a new category based on this platform but I hadn't sort of defined it yet in the World is Flat of what I call the super empowered individual.

What I was saying was that this global platform was creating a world where we didn't just have super powers, we were actually spawning super-empowered individuals where individuals could actually act with the power of states.

And so I wrote [...] in 1999, and in my example of a super empowered person, I called him "super empowered angry man," was a guy named Osama bin Laden. So I wrote that in 1999. And the reason I wrote it was because the Clinton administration, when al Qaeda blew up the United States embassies in Nairobi and Tanzania, Bill Clinton fired 72 cruise missiles at Bin Laden at a base in Afghanistan. And I wrote about it at the time, I just said, "Wow. We just fired 72 cruise missiles at a million dollars a pop at a person. We've never done that before. We fired 72 cruise missiles at a person." And I said that was the first war in history between a superpower and a super empowered angry man.

So when 9/11 happened, I said, "Oh, I know what this is. This is the retaliation of the superpowered angry man against the superpower."

Now it's flash-forward to Ukraine. So this will tie back to the core question. So Putin thought he was at war with a superpower, the United States acting through NATO and then buttressing Ukraine. So he fell into what I call my Princess Diana rule.

So Princess Diana once observed that "the problem with my marriage is that there are three people in my marriage." Putin didn't understand that there were now three people in his marriage. There was the super power and the super empowered people. And so the super power imposed all kinds of formal sanctions on Russia. And then the super empowered people went to work and this is how they did it.

So they went into TikTok and they saw videos of massacre in Bucha. They posted on their Facebook page. Then they went into Slack and discussed it with their fellow employees at, say, McDonald's. And then they did not ask the CEO of McDonald's, they told the CEO of McDonald's, "we are getting out of Russia." And that happened in a thousand companies in a space of two weeks. That was the super empowered people. That was individuals acting globally as individuals. And Putin didn't see that coming at all.

And so is globalization over? Not my globalization, that's for sure. Trade may be down, it may be up. I have no idea. I don't follow those statistics, I'm not a economics guy. I actually write about power, foreign affairs, that's where I come from. And for me, globalization is not over in the least.

Adrian Monck: One of my takeaways from your book, The World Is Flat, was actually what you were saying was that the world as a consumer society is becoming more homogenous. You know, the president of the United States doesn't have a better iPhone than you have. Someone in Cape Town doesn't have a different Android phone.

Thomas Friedman: That's very levelling.

Adrian Monck: It's levelling. And also there's a homogeneity to it. You go into a Luckins Coffee in Beijing or Shanghai, it's going to look pretty much like a Starbucks looks in Boston.

Thomas Friedman: So actually, that was not my view. But it's half right in the sense that my view of globalization - and again it gets to this idea that I'm some techno utopian - it's very clear in the book: globalization, it's flat, it goes both ways. It can be incredibly democratizing. We saw it in the Arab Spring, for instance. And it can be incredibly authoritarian, where China uses a globalization system to impose its order, you know, on its society. It can be incredibly particularizing. I wrote in that book about women artisans in Peru who, using the internet, suddenly had a global market for their artwork that they'd never had before.

And it could be incredibly homogenizing for the reasons you discussed - there's Starbucks now at every beautiful tourist site in the world. And so it's all about how you get the best and cushion the worst. But it goes both ways. And if you think it's all one or all the other, that's when you get in trouble.

Adrian Monck: You said at the beginning, we talked about the kind of rhetoric of "globalization is dead" but you said the upsides and the downsides. Is what's dead or dying some of that optimism about globalization. And is there a way you put some of that optimism back into it when you wrote The World is Flat, but is there a way to restore some of that optimism now in what looks like a really dark world where we're facing, you know, food shortage, we're facing fuel shortage, we're facing a conflict in Europe, the like of which hasn't been seen in decades.

Thomas Friedman: Well, again, it is basically against the rules of modern journalism to be optimistic. So if you stick your head out there, it's going to get chopped off. But I'm an old fart, so who cares? You know what I mean?

When did you see this before? Through PayPal. PayPal had set up a system. They identified and vetted 200 different Ukrainian charities, empowerment groups, rescue organizations. And they set up a system not only where individuals of 800 million PayPal users could, as individuals, act like USAID and send any amount of money to any one or all of these groups. But they work with American Express, so you could cash in your rewards, miles, and send a donation to an NGO in Ukraine.

Was your grandmother doing that in World War One? I don't think so. So, again, that kind of floats my boat. You know, I'm really sorry for being optimistic about that, but that's amazing. You can cash in your rewards, miles, as an individual to make a donation to strengthen a Ukrainian NGO against Russia as an individual.

Or as we saw in the first week of the war, someone at Airbnb said, "you know what, I'm going to rent a room in Lviv from someone on Airbnb. I'm not going to go, I'm going to transfer money to that person." And within two weeks, $20 million - before USAID had laced up their shoes - individuals around the world had transferred $20 million through a global platform in a flat world to Ukraine. I guarantee you that was not in Putin's prewar planning. Now, does it trump everything Putin's doing? No. But these are enormously exciting things. And to even mention it, you become a techno utopian.

Adrian Monck: Last night we heard from some of the Ukrainian MPs who are here and they were talking about how they'd used Booking.com to solve refugee issues and space. Yeah, so quite incredible. We don't have long with you I know. And we have a great room. I wanted to see if we could get some questions from our audience. [...]

Peter Holmes à Court: Thomas. My name is Peter Holmes à Court from the Australian Financial Review. Friend-shoring or ally-shoring – so, trading with only those that we like. Can you talk about that in the context of what you've been talking about?

Thomas Friedman: Explain a little more what you mean by that.

Peter Holmes à Court: The idea that nations choose who they will trade with based on whether those countries may share their values and whether that's a good thing or whether trade actually helps bring good values to countries.

Thomas Friedman: Right. So that's a much debated subject. It's a very interesting question. It's much debated. In The Lexus and the Olive Tree. I coined a term that I call "globalution," so I defined it as revolution from beyond.

That is when you can't get reform and political change from below and you can't get it from above, sometimes you get it from beyond. And what I pointed to is China importing global accounting standards that they couldn't generate from below or above. But because they want to do business with Australian companies or have Australian companies work in China, you get the revolution from beyond.

And it's interesting, we were just doing a round-up in The New York Times, they asked every columnist to write about something they got wrong or they've reconsidered. And I did actually China because I wrote in The Lexus and the Olive Tree, I wrote two things. One, that China is going to have a free press, the leaders just don't know it. And the argument was that without free and accurate information, it would always be a limit on its growth.

And the other thing I said was my grandmother, because China was claiming it was going to take the 21st century, you know, and I said, "my grandma used to say, never cede the century to a country that censors Google." It was a little thing grandma used to say. And so, you know, my belief is that censoring Google is a proxy for restricting people's imagination, so that it would always be a limit. And so I confessed I got these wrong but I said, "I plead guilty, Your Honour, but I'm asking for a 10-year suspended sentence." Because who declared 2020 to the end of history?

I think we're in a really interesting moment right now with China, you know, on this. And so I think it's really dangerous to to make any of these statements, you know, that globalization's dead. It's the end of history. I mean, you know, people don't realize I actually wrote The World is Flat in 2004. You know, when I wrote that book, Facebook didn't exist, Twitter was still a sound, the cloud was still in the sky, 4G was a parking place, LinkedIn was a prison, applications were what you sent to college, Big Data was a rap star and Skype was a typographical error.

And all of that happened after I wrote The World is Flat and people are telling me globalization is over and I've been in all these Ukraine meetings, the amount of innovation the Ukrainians overnight have generated to help their people internally to I mean ... globalization is over? There's a Ukrainian parliamentarian, the Russians' first goal was to take down the terrestrial internet in Ukraine. That was job one. And the Ukrainian MP tweets at Elon Musk: "God, we could use some Starlink here." And three weeks later, there are 130 Starlink pods in Ukraine and they're up and running and Russia can't do anything.

And globalization is over because somebody trade is off this year or they're foreign investments in their fund is down? I mean, I'm sorry, you know who gave them ownership of this phenomenon? If it isn't a human phenomenon, what is it?

Clashes within civilisations

Adrian Monck: Just see if I can get a question from the gentleman just there.

Voice from the floor: [Inaudible] I love the idea of writing about something that you were wrong about before.

Thomas Friedman: I could fill a whole book. Sorry, go ahead.

Voice from the floor: I'm going to ask you to make a prediction. If you are wrong about your view now, what do you think is the most likely thing that would have caused that? What are you most concerned about?

Thomas Friedman: It's a very good question. So I'll go back to a previous book that I wrote, and that was The

Lexus and the Olive Tree, which if you'll permit me a moment of narcissism, I think was my most important book. It was written in 1999, so it's written right after the fall of the Berlin Wall. And at that time, there were four big claims kind of made of what would be the international system that replaces the Cold War system.

Frank Fukuyama, said it would be 'the end of history', the triumph of free markets and liberal political systems. By the way, I'm a huge fan of Frank's [...] He may have been early, you know, but not entirely wrong. And so I'm not ready to ... but at the time, it certainly hasn't come about.

The second was Sam Huntington. He said it would be a 'clash of civilizations'. Oh really? Like Ukrainians fighting Russians? That's a clash, if there's ever been a lash within civilization that's tipped over the world, it's that. There's not a clash of civilizations. Islam versus Islam. Or how about Iraq versus Iran? I mean, Sunnis versus Shiites. That really didn't work. That didn't hold up at all.

The third was Robert Kaplan wrote a book called The Coming Anarchy. The world's just going to get anarchic. He may be right. I think the worst you could say, he's early, but who knows? That may be right.

So the book I wrote was The

Lexus and the Olive Tree. My argument is that actually what will be the defining feature of international relations is going to be the interaction between these really wired old urges, I called our 'olive tree urges', our quest to build solidarity around sect, tribe, family, region, state, religion, nationalism. Things that anchor us are olive trees. Interacting with the world increasingly defined and tied together by this globalization system. And this constant rubbing of these two things together.

Occasionally our olive tree urges would burst right through. Putin would take Crimea and then he would make this move toward Kiev and then get beaten back, you know, in part by the globalization system. But to me that's the system now. It's the interaction between what's really old and this new thing and it takes different forms all the time.

And that was the argument I was making. And the title of the book actually came - I was in Tokyo. I'd gone to the Lexus factory in 1994 in Toyota city and it was the first fully roboticized car factory. And I was just blown away. I'd never seen a roboticized car factory. It was 1994. This little thing where you put hot molten glue around the front windshield and at the end the little finger would come over and there'd be a drop of glue on it and a wire would come along and scoop it off. It's just amazing. You know, I was wowed.

Got back on the bullet train to drive back to Tokyo from Toyota city. And I was reading the Herald Tribune a story in there about how [inaudible] had misstated some UN resolution on Palestine in 1948. And I just thought, you know, these people who I'm riding on their bullet train are building the greatest luxury car in the world with robots. And these people in page three of the Herald Tribune, who I love so dearly, who I know so well, are still fighting over who owns which olive tree. And ain't that the post-Cold War world. That's where it came from.

“

What will be the defining feature of international relations is going to be the interaction between these really wired old urges, I called our olive tree urges, our quest to build solidarity around sect, tribe, family, region, state, religion, nationalism.

”—Thomas L. Friedman, New York Times columnist

Adrian Monck: Great reflection. I'm just going to look out and see if I can wisdom-of-crowds for a final question before we... Alec?

Alec Hogg: Alec Hogg from Biznews in South Africa. I need help from you on this because I can't understand it. The Ukrainians tell us that the Europeansm by buying gas are funding Russia to have a war with Ukraine. Russia gets more money from selling its gas than it's costing Putin to wage the war.

Thomas Friedman: It's even better that that. Putin starts a war and prices go up, you know, and so he actually sells half the oil to make the same income in a war.

Look, we specialize in America since 1973 of funding both sides in every war. That's what we do. You know, we fund the US military through our tax dollars and we fund the other side through energy purchases. And you know, I wrote about this for the umpteenth time, you know, a few days ago because, you know, I'm told, I don't know this by experience, but I'm told that if you jump off the top of a hundred story building, you can think you're flying for 99 floors. Okay. It's the sudden stop at the end that tells you you're not, okay.

And so you can launch a war with Ukraine and think you're flying. But it's all the underlying plumbing [...] the substructure of globalization, telecommunications, energy or what not. And so you get in these situations where you're funding both sides in a war, and that's where we are.

Now, the interesting question here, and I would argue we're in the sumo stage of this war now. So it's like now two giant sumo wrestlers are each trying to get leverage over the other, you know, and with Russia, it's the pure weight of manpower and just dumb bombs against a pretty defenceless urban population spread out around Ukraine. For the West, Ukraine and NATO, it's this massive sanctioning of the Russian economy by both superpowers and super empowered people. And we're just sort of seeing, you know, who will be able to generate the most leverage - and oil will be part of that.

The problem with oil is that oil and energy is a scale problem. If you don't have scale, you have a hobby. You know, I like hobbies. I used to build model aeroplanes as a kid. I wouldn't try to change the world energy system as a hobby, which is basically what we do, what we've been doing.

And so there's only one word that matters when you're talking about energy and climate. It's transition. It's transition. If you don't have a strategy for transition to get from small scale renewables to baseload renewables, to get from oil and gas companies to energy companies. And if you think the transition, the critique from me of the Greens is they think the transition is flipping a switch. I tweeted on it. I got the board of my school to disinvest from Exxon. You've got to get out of Facebook and into somebody's face if you're going to really make change, you know. So they have no plan for a transition. The energy companies, they've been selling us the same hogwash since 1973. Oh, Tom, you're right. You're right. We need do the transition. But right now, we need to pump more oil. So that's what they say. Every crisis. We need to pump more oil.

So actually, we never make the transition at the speed, scope and scale that we need. Now, hopefully, this will help and we're getting there. It's moving down the road. I mean, Germany, you know, gets 52% of its energy, electricity from renewables. Had they not shut down almost all 17 of their nuclear plants, they'd be 80% there. That's jumping off the top of a hundred story building and thinking you're flying.

If you don't have a scale plan, you don't have a plan. And the only way to get scale, there's only one thing as big as mother nature, and that's father profit. That's the market. And if you aren't leveraging the market by reshaping it to give it the incentives you want for the outcome you want, you just have a hobby.

Adrian Monck: Tom, what can I say? Thanks for coming in. Challenging the consensus for us. It's great to have you framing things. We've all gained a lot from listening to you and we gain a lot from reading you. So thank you so much.