Copyright: 2008
Publisher: Portfolio
ISBN: 1-591-84218-2
In The World is Curved, David Smick responds to Thomas Friedman's assertion that the world is now flat. Smick asserts that globalization has so changed the macroeconomic game that the world is more curved now than ever. Events that once had predictable outcomes now seem to have consequences just beyond the horizon of what we can see. Smick interprets the world through the dual lens of capital flow and the entrepreneurial spirit.
Gold, the Euro and the Dollar
One of the interesting discussions that Smick engages in has to do with where the world holds its cash. Right now a number of conservatives are clamoring for a return to the gold standard. A great number of people are rushing headlong to buy gold out of fear that the dollar will collapse and gold will be the only thing worth anything. It is interesting to note that there simply isn't enough gold in the world to handle the world's capitalization needs. The savings of the world are generally dollar denominated now but if the dollar falls apart, the Euro is the most likely next best choice. The pool of Euro's is still smaller than the Dollar and it is arguably not large enough yet to act as the world's savings denomination but it has a far better chance than gold.
The Case for (or against) China
Smick devotes an entire chapter to discussing the possibility of China becoming the next great economic powerhouse. His views seem to dovetail with the geopolitical views of George Friedman as discussed in The Next 100 Years. In a nutshell, both men feel that the great economic disparity between the coastal and interior regions of the country are going to create a political climate so unstable as to knock the economic rocket off course. Smick devotes a great deal of time looking at the possible scenarios from the fallout of a China meltdown.
Conclusion
As a broad economic overview this book is a good read. Smick has a tendency for self-promotion and some of the anecdotes in the book, while entertaining, seem to only serve the purpose of name dropping. Serious economists will likely find faults in some of the theories and ideas expressed in the book, however for most of us, the book is a fascinating read.