Friday, June 15, 2012

Book Review: The World Is Curved: Hidden Dangers to the Global Economy by David M. Smick

The World Is Curved: Hidden Dangers to the Global Economy (2008)
David M. Smick

I never heard of David M. Smick before, but he's been a high-powered Washington economic consultant for some years. His book title is a deliberate variation on Thomas L. Friedman's popular volume The World is Flat. Smick's message, essentially, is that globalization has brought unprecedented wealth and prosperity to those nations who embraced it, but that there are still many underlying perils that we face going forward.

The book is welcome. Almost no one today has anything remotely sane to say about the global economy, and here we have an entire volume of intelligent commentary. Politicians are mostly quiet on the topic these days, alert for a popular protectionist backlash against global capital flow. Activists engage in mindless violent protest against the very policies that have boosted global wealth most dramatically.

The American hereos of this essentially nonpartisan narrative are an unlikely pair of Presidents: Ronald Reagan and Bill Clinton. Smick also gives kudos to Chuck Schumer, Democratic Senator from New York. I was surprised, and pleased, to hear it. But the real problem is that globalization has few public champions in our deeply troubled times, and many are all too willing to blame it for almost any of our divers economic difficulties.

The book's section on China is excellent, and certainly one of the scarier segments. Also frightening is the knowledge that global capital flows are so huge that no one central bank has the ready cash to cover a disaster.

To summarize then, global capital flows offer unparalleled opportunities for worldwide economic growth and wealth creation. The flip side of the coin is the huge amount of fiscal uncertainty out there, and the potential for far-reaching economic calamity if markets aren't managed properly. Anyway, there is so much misunderstanding and disinformation in circulation on this subject that it is essential for this book to have as wide a readership as possible.


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