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the Wal-Mart worker in us hates the benefits and pay packages that Wal-Mart offers

its starting employees. And the Wal-Mart citizen in us knows that because Wal-Mart,

the biggest company in America, doesn't cover all its employees with health care,

some of them will just go to the emergency ward of the local hospital and the taxpayers

will end up picking up the tab. The Times reported that a survey by Georgia officials

found that "more than 10,000 children of Wal-Mart employees were in the state's health

program for children at an annual cost of nearly $10 million to taxpayers." Similarly,

it said, a "North Carolina hospital found that 31 percent of 1,900 patients who

described themselves as Wal-Mart employees were on Medicaid, while an additional 16

percent had no insurance at all."

In her 2004 book, Selling Women Short: The Landmark Battle for Workers' Rights at

Wal-Mart, journalist Liza Featherstone followed the huge women's discrimination suit

against Wal-Mart. In an interview about the book with Salon.com (November 22, 2004),

she made the following important point: "American taxpayers chip in to pay for many

full-time Wal-Mart employees because they usually require incremental health

insurance, public housing, food stamps -there are so many ways in which Wal-Mart

employees are not able to be self-sufficient. This is very ironic, because Sam Walton

is embraced as the American symbol of self-sufficiency. It is really troubling and

dishonest that Wal-Mart supports Republican candidates in the way that they do: 80

percent of their corporate campaign contributions go to Republicans. But Republicans

tend not to support the types of public assistance programs that Wal-Mart depends

on. If anything, Wal-Mart should be crusading for national

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health insurance. They should at least be acknowledging that because they are unable

to provide these things for their employees, we should have a more general welfare

state."

As you sort out and weigh your multiple identities-consumer, employee, citizen,

taxpayer, shareholder-you have to decide: Do you prefer the Wal-Mart approach or the

Costco approach? This is going to be an important political issue in a flat world:

Just how flat do you want corporations to be when you factor in all your different

identities? Because when you take the middleman out of business, when you totally

flatten your supply chain, you also take a certain element of humanity out of life.

The same question applies to government. How flat do you want government to be? How

much friction would you like to see government remove, through deregulation, to make

it easier for companies to compete on Planet Flat?

Said Congressman Rahm Emanuel, an Illinois Democrat who was a senior adviser to

President Clinton, "When I served in the White House, we streamlined the FDA's drug

approval process in response to concerns about its cumbersome nature. We took those

steps with one objective in mind: to move drugs to the marketplace more quickly. The

result, however, has been an increasingly cozy relationship between the FDA and the

pharmaceutical industry, which has put public health at risk. The Vioxx debacle [over

an anti-inflammatory drug that was found to lead to an increased riskfor heart attacks

and strokes] shows the extent to which drug safety has taken a backseat to speedy

approval. A recent Senate hearing on Vioxx's recall revealed major deficiencies in

the FDA's ability to remove dangerous drugs from the market."

As consumers we want the cheapest drugs that the global supply chains can offer, but

as citizens we want and need government to oversee and regulate that supply chain,

even if it means preserving or adding friction.

Sort that out.

Who Owns What?

Something else is absolutely going to have to be sorted out in a flat world: Who owns

what? How do we build legal barriers to protect an innovator's intellectual property

so heor she can reap its financial benefits and plow those profits into a new invention?

And from the other side, how do we keep walls low enough so that we encourage the

sharing of intellectual property, which is required more and more to do cutting-edge

innovation?

"The world is decidedly not flat when it comes to uniform treatment of intellectual

property," said Craig Mundie, Microsoft's chief technology officer. It is wonderful,

he noted, to have a world where a single innovator can summon so many resources by

himself or herself, assemble a team of partners from around the flat world, and make

a real breakthrough with some product or service. But what does that wonderful

innovative engineer do, asked Mundie, "when someone else uses the same flat-world

platform and tools to clone and distribute his wonderful new product?" This happens

in the world of software, music, and pharma-ceuticals every day. And the technology

is reaching a point now where "you should assume that there isn't anything that can't

be counterfeited quickly"-from Microsoft Word to airplane parts, he added. The

flatter the world gets, the more we are going to need a system of global governance

that keeps up with all the new legal and illegal forms of collaboration.

We can also see this in the case of patent law as it has evolved inside the United

States. Companies can do one of three things with an innovation. They can patent the

widget they invent and sell it themselves; they can patent it and license it to someone

else to manufacture; and they can patent it and cross-license with several other

companies so that they all have freedom of action to make a product-like a PC-that

comes from melding many different patents. American patent law is technically neutral

on this. But the way established case law has evolved, experts tell me, it is decidedly

biased against cross-licensing and other arrangements that encourage collaboration

or freedom of action for as many players as possible; it is more focused on protecting

the rights of individual firms to

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manufacture their own patents. In a flat world, companies need a patent system that

encourages both. The more your legal structure fosters cross-licensing and standards,

the more collaborative innovation you will get. The PC is the product of a lot of

cross-licensing between the company that had the patent on the cursor and the company

that had the patent on the mouse and the screen.

The free-software person in all of us wants no patent laws. But the innovator in all

of us wants a global regime that protects against intellectual property piracy. The

innovator in us also wants patent laws that encourage cross-licensing with companies

that are ready to play by the rules. "Who owns what?" is sure to emerge as one of

the most contentious political and geopolitical questions in a flat world-especially

if more and more American companies start feeling ripped off by more and more Chinese

companies. If you are in the business of selling words, music, or pharmaceuticals

and you are not worried about protecting your intellectual property, you are not

paying attention.

And while you are sorting that out, sort this out as well. On November 13, 2004, Lance

Cpl. Justin M. Ellsworth, twenty, was killed by a roadside bomb during a foot patrol

in Iraq. On December 21, 2004, the Associated Press reported that his family was

demanding that Yahoo! give them the password for their deceased son's e-mail account

so they could have access to all his e-mail, including notes to and from others. "I

want to be able to remember him in his words. I know he thought he was doing what

he needed to do. I want to have that for the future," John Ellsworth, Justin's father,

told the AP. "It's the last thing I have of my son." We are moving into a world where

more and more communication is in the form of bits traveling through cyberspace and

stored onservers located all over the world. No government controls this cyber-realm.

So the question is: Who owns your bits when you die? The AP reported that Yahoo! denied

the Ellsworth family their son's password, citing the fact that Yahoo! policy calls

for erasing all accounts that are inactive for ninety days and the fact that all Yahoo!

users agree at sign-up that rights to a member's ID or account contents terminate

upon death. "While we sympathize with any grieving family, Yahoo! accounts and any

contents therein are nontransferable" even after death, Karen Mahon, a Yahoo!

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spokeswoman told the AP. As we get rid of more and more paper and communicate through

more and more digitized formats, you better sort out before you die, and include in

your will, to whom, if anyone, you want to leave your bits. This is very real. I stored

many chapters of this book in my AOL account, feeling it would be safest in cyberspace.

If something had happened to me during my writing, my family and publisher would have

had to sue AOL to try to get this text. Somebody, please, sort all this out.

Death of the Salesmen

In the fall of 2004, I went out to Minneapolis to visit my mother and had three

world-is-flat encounters right in a row. First, before I left home in Washington,

I dialed 411 -directory assistance-to try to get a friend's phone number in

Minneapolis. A computer answered and a computerized voice asked me to pronounce the

name of the person whose number I was requesting. For whatever reason, I could not

get the computer to hear me correctly, and it kept saying back to me in a computerized

voice, "Did you say ... ?" I kept having to say the family name in a voice that masked

my exasperation (otherwise the computer never would have understood me). "No, I didn't

say that... I said..." Eventually, I was connected to an operator, but I did not enjoy

this friction-free encounter with directory information. I craved the friction of

another human being. It may be cheaper and more efficient to have a computer dispense

phone numbers, but for me it brought only frustration.

When I arrived in Minneapolis, I had dinner with family friends, one of whom has spent

his life working as a wholesaler in the Midwest, selling goods to the biggest retailers

in the region. He is a natural salesman. When I asked him what was new, he sighed

and said that business just wasn't what it used to be. Everything was now being sold

at 1 percent margins, he explained. No problem. He was selling mostly commodity items

so that, given his volumes, he could handle the slim profit margin. But what bothered

him, he mentioned, was the fact that he no longer

had human contact with some of his biggest accounts. Even commodities and low-cost

goods have certain differentiating elements that need to be sold and highlighted.

"Everything is by e-mail now," he said. "I am dealing with a young kid at [one of

the biggest retailers in the nation], and he says, 'Just e-mail me your bid.' I've

never met him. Half the time he doesn't get back to me. I am not sure how to deal

with him ... In the old days, I used to stop by the office, give the buyers a few

Vikings tickets. We were friends. . . Tommy, all anyone cares about today is price."

Fortunately, my friend is a successful businessman and has a range of enterprises.

But as I reflected later on what he was saying, I was drawn back to that scene in

Death of a Salesman in which Willy Loman says that, unlike his colleague Charley,

he intends to be "well liked." He tells his sons that in business and in life, character,

personality, and human connections are more important than smarts. Says Willy, "The

man who makes an appearance in the business world, the man who creates personal

interest, is the man who gets ahead. Be liked and you will never want."

Not when the world goes flat. It's hard to create a human bond with e-mail and streaming

Internet. The next day, I had dinner with my friend Ken Greer, who runs a media company

that I discuss in greater detail later. Ken had a similar lament: So many contracts

were going these days to the advertising firms that were selling just numbers, not

creative instinct. Then Ken said something that really hit home with me: "It is like

they have cut all the fat out of the business" and turned everything into a numbers

game. "But fat is what gives meat its taste," Ken added. "The leanest cuts of meat

don't taste very good. You want it marbled with at least a little fat."

The flattening process relentlessly trims the fat out of business and life, but, as

Ken noted, fat is what gives life taste and texture. Fat is also what keeps us warm.

Yes, the consumer in us wants Wal-Mart prices, with all the fat gone. But the employee

in us wants a little fat left on the bone, the way Costco does it, so that it can

offer health care to almost all its employees, rather than just less than half of

them, as Wal-Mart does. But the shareholder in us wants Wal-Mart's profit margins,

not Costco's. Yet the citizen in us

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wants Costco's benefits, rather than Wal-Mart's, because the difference ultimately

may have to be paid for by society. The consumer in me wants lower phone bills, but

the human being in me also wants to speak to an operator when I call 411. Yes, the

reader in me loves to surf the Net and read the bloggers, but the citizen in me also

wishes that some of those bloggers had an editor, a middleman, to tell them to check

some of their facts one more time before they pressed the Send button and told the

whole world that something was wrong or unfair.

Given these conflicting emotions and pressures, there is potential here for American

politics to get completely reshuffled-with workers and corporate interests

realigning themselves into different parties. Think about it: Social conservatives

from the right wing of the Republican party, who do not like globalization or closer

integration with the world because it brings too many foreigners and foreign cultural