HSBC and Flat Solutions

Jan 18, 2013 at 11:20 AM by Katheryn Wright

Nearly ten years ago, Thomas Friedman used the metaphor of a “flat world” to illustrate what’s how the combination of technological changes are allowing more people to connect with each other to do collaborate and share knowledge. In describing economic changes, he forgets to talk about the economy. Friedman positions “technology as a driver of change” rather than analyzing economic policy and politics. Truthfully, it’s easy to critique Friedman. However, the “solutions” to the world’s problems that Friedman suggests seem awfully similar to what I hear American politicians (both Democrat and Republican) selling in stump speeches: open up the world economy through free trade, innovate through the connectivity of digital technology, and improve education by “producing more engineers and scientists.”

HSBC is a global financial institution, meaning it has stakeholders all across the globe. Over the holidays, the story broke the HSBC had been laundering money for drug cartels along with doing business with countries like Iran, who were off-limits due to U.S. sanctions. HSBC agreed to pay $1.9 billion in fines, although nobody went to prison as of yet. Here’s a link to The Colbert Report’s report on the laundering charges, followed by an interview with Matt Taibbi from Rolling Stone: http://www.colbertnation.com/the-colbert-report-videos/422922/january-16-2013/hsbc-laundering-charges

What I find interesting is that the solutions Friedman propose – and they all seem pretty viable – may be what’s enabling corruption like what happened at HSBC. Do opening up markets create banks that are too big to be controlled by law? Is the belief that digital technology is the prime mover of the economy making it easier for the public to rationalize corruption because there’s just so much of it going on? Is an education that focuses on the production of a certain type of worker rather than, well, education, producing workers who only care about something that happens if it affects them? Will Stephen Colbert be the President of the United States in the next decade?