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downturns, when they hit, lasted only eight months. This period of stability was a spoil of the decades-long assault on inflation.
    The tactics honed in that war became one of America’s most successful exports. In the late 1980s, dozens of large, important countries were beset by hyperinflation. In Argentina it was at 3,500 percent, in Brazil 1,200 percent, and in Peru 2,500 percent. In the 1990s, one after the other of these developing countries moved soberly toward monetary and fiscal discipline. Some accepted the need to float their currencies; others linked their currencies to the euro or the dollar. By 2007, just twenty-three countries had an inflation rate higher than 10 percent, and only one—Zimbabwe—suffered from hyperinflation. (By 2009, even Zimbabwe had cured its bout with hyperinflation by giving up its own currency and relying on the South African rand and U.S. dollar for commerce.) This broad atmosphere of low inflation has been crucial to the political stability and good economic fortunes of the emerging nations.
    Though the inevitable protesters at G-20 summits will say differently, none of this happened by coercion. Success stories like Japan and the “Asian tigers” (Hong Kong, Singapore, South Korea, and Taiwan) were persuasive examples of the benefits of free trade and smart economic governance. Governments from Vietnam to Colombia realized they couldn’t afford to miss out on the global race to prosperity. They adopted sound policies, lowering debt levels and eliminating distorting subsidies—not because Bob Rubin or a secretive cabal inside the World Trade Organization forced them to do so, but because they could see the benefits of moving in that direction (and the costs of not doing so). Those reforms encouraged foreign investment and created new jobs.
    Along with these political and economic factors moving countries toward a new consensus came a series of technological innovations that pushed in the same direction. It is difficult today to remember life back in the dark days of the 1970s, when news was not conveyed instantly. But by the 1990s, events happening anywhere—East Berlin, Kuwait, Tiananmen Square—were transmitted in real time everywhere. We tend to think of news mainly as political. But prices are also a kind of news, and the ability to convey prices instantly and transparently across the globe has triggered another revolution of efficiency. Today, it is routine to compare prices for products in a few minutes on the Internet. Twenty years ago, there was a huge business in arbitrage—the exploitation of different prices in different places or during different times—because such instant price comparison was so difficult.
    The expansion of communications meant that the world got more deeply connected and became “flat,” in Thomas Friedman’s famous formulation. Cheap phone calls and broadband made it possible for people to do jobs for one country in another country—marking the next stage in the ongoing story of capitalism. With the arrival of big ships in the fifteenth century, goods became mobile. With modern banking in the seventeenth century, capital became mobile. In the 1990s, labor became mobile. People could not necessarily go to where the jobs were, but jobs could go to where people were. And they went to programmers in India, telephone operators in the Philippines, and radiologists in Thailand. The cost of transporting goods and services has been falling for centuries. With the advent of broadband, it has dropped to zero for many services. Not all jobs can be outsourced—not by a long shot—but the effect of outsourcing can be felt everywhere.
    In a sense, this is how trade has always worked—textile factories shifted from Great Britain to Japan in the early twentieth century, for example. But instant and constant communications means that this process has accelerated sharply. A clothing factory in Thailand can be managed almost as if it were in the United