The World is Flat and Getting Older

I just finished reading Thomas Friedman's The World is Flat. It is quite insightful and looks at globalization, outsourcing, global supply chains and the impacts this flattening process is having and will have in the future. As the fellow who recommended this book to me said, twenty percent of what Friedman says is wrong. I believe he overestimates what government is capable of doing effectively and he overestimates just how flat the world will become. Some things are just so localized that they can't be flattened (ie it's hard to outsource your house cleaning or lawn care to India). He also introduces too many people as "my friend." I have no doubt that Thomas Friedman has lots of friends, but you don't have to name drop. If you took a shot of whiskey everytime Friedman writes "my friend" you would be too drunk to finish the book. Nonetheless, The World is Flat is well worth the price.

One idea that's been running through my mind the last few months is how aging populations will impact the economy. Friedman doesn't get into this (he focuses on backward looking cultures, not age groups), but he does ask a question relevant to my concern: "Does your society have more memories than dreams or more dreams than memories?"

I've often wondered what will happen as the U.S. gets older. Will an aging population that has more years behind it than in front of it erect barriers or push for policies that will stymie economic growth in exchange for increased present comforts? Will a fear of change drive older Americans to restrict innovation or long term investments? Here is part of a great paragraph by Friedman:

In societies that have more memories than dreams, too many people are spending too many days looking backward. They see dignity, affirmation, and self worth not by mining the present but by chewing on the past. And even that is usually not a real past but an imagined and adorned past. Indeed, such societies focus all their imagination on making that ingrained past even more beautiful than it ever was, and then they cling to it like a rosary or a strand of worry beads, rather than imagining a better future and acting on that. It is dangerous enough when other countries go down that route; it would be disastrous for America to lose its bearing and move it that direction.

As the population ages, and as I hear about the "Good Old Days" more and more, I wonder whether or not America will move in this direction. I read an interview with the late management guru Peter Drucker where he said that the largest age group dominates the culture. As retirees come to dominate the culture, I fear that innovation and economic freedom could be restricted. I'm not so sure that Western Europe isn't already moving in that direction. So you could have a situation where the younger countries get flatter while the older countries start to unflatten. Time will tell.