by Jerome a Paris
Mon Feb 18th, 2008 at 09:47:35 AM EST
A hard-hitting piece from a French-sounding guy in the Guardian:
The interwar crisis led to the second world war and the birth of Keynesianism. The less significant Opec crisis of the 1970s destroyed the social-democratic consensus and led to the triumph of neoliberalism. And this time? One thing seems certain: the neoliberal orthodoxy will be undermined.
The American model was celebrated by Thatcherites and New Labour alike, California worshipped as the model of the future, "Anglo-Saxon" embalmed as the fitting metaphor for the shared Anglo-American legacy, Europe denigrated and the rest of the world ignored. How perceptions of the US have changed: a country living beyond its means, dependent on large helpings of Asian credit, characterised by huge inequalities, its great financial institutions guilty of huge folly, forced to rely for their salvation on the sovereign wealth funds of China and elsewhere.
He also has these paragraphs on free-trade and liberalism, but I wonder if he's right about that:
When the free market and deregulation are the means by which the western world extends its global economic power over the developing world, then they are deemed highly virtuous, but it is a different matter when they become the instrument by which developing countries can extend their influence over western economies.
I think our elites mind when these tools are used for political purposes rather than for financial purposes, ie when the rules of the game are changed, so I don't quite agree that "these tools" are the instrument for reverse influence - rather, their "retooling" is. But the point about this being about power and domination remains.
This crisis, however, threatens to be even more fundamental. While the 1973 gyrations were the result of a temporary shift of power from the industrial world to Opec, the underlying cause this time is permanent and far-reaching - a fundamental shift in power from the developed world to the developing world, and above all China and India. We have not witnessed anything like this since the inception of the west as an industrial powerhouse in the 19th century.
This is a fashionable theory, but I'm not convinced yet that this can actually happen - because of resource constraints, because of deeper tensions and problems inside within these countries and, most of all, because in many cases their elites are as much trying to ape and join the global elite as they are trying to steer their countries towards prosperity or greater power.