Portent
The last global economic crisis of this magnitude helped spread Fascism, Communism and the economic primitivism of State Autarky. I expect that, if a relatively decent bounce-back cannot be engineered to loosen credit markets, we will see countries moving in authoritarian and autarkic directions in 2009, using managed trade barter deals to evade currency fluctuations or devaluations. Black Globalization will explode as ordinary citizens seek to escape new economic controls.
A convenience that, for middle income states, will soon harden into habit with the help of vested interests who benefit, relatively speaking, by reducing social mobility and economic fluidity in hard times.
TDL:
October 9th, 2008 at 4:51 am
That is the direction that we seem to be moving in. Both candidates for POTUS have an autarkic/authoritarian streak to them.
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As an aside, the credit markets are not as bad as people are making them out to be. Rates are simply higher. August saw all time highs in loans of various kinds. So CAT can’t float a five year note for less than 7.25%, so what? Also, be careful when you hear pundits, pols, & bureaucrats blathering on about small businesses not being able to get short term financing for payroll; financing payroll is the death knell of a small business and anyone claiming that this is a problem has never run a small or medium sized business. You make payroll from revenues or retained earnings (i.e. savings.)
Regards,
TDL
Smitten Eagle:
October 9th, 2008 at 12:49 pm
…And Thomas PM Barnett will have to write another book…
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🙂
Lexington Green:
October 9th, 2008 at 2:48 pm
"… we will see countries moving in authoritarian and autarkic directions in 2009, using managed trade barter deals to evade currency fluctuations or devaluations."
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Up to about p. 100 in Tooze’s economic history of the Third Reich. That is precisely what the Nazis did. They did not want to let the currency float. The moved toward a system of minutely managed domestic economy organized as a system of government regulated cartels. The business community did not object. The public suffered a decline in living standards, but did not really understand what was happening.
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Interesting and troubling that as late as 2000 both candidates were free traders. Now neither are.
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Very bad. Good think we have nuclear weapons, so that a great power conflict will not likely be the ending of the episode.
Lexington Green:
October 9th, 2008 at 2:52 pm
"reducing social mobility and economic fluidity"
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You say this like it is a bad thing. For a lot of people, this is a political goal. A population with no assets and no options are a nice bunch of serfs, whose "needs" can only be met by asking their political masters on one knee.
Jose Angel de Monterrey:
October 10th, 2008 at 2:45 am
Yet another concern is the fact in many countries responsible and serious governments had started the liberalization of their economies, making their central banks independent, privatizing banks and industries that were previously under state control, opening their markets to foreign investment and competition from abroad, modernizing their regulatory structures, etc. Many of these politicians in emerging democracies have done these reforms under fierce opposition from populist, socialist, irresponsible and power-hungry opposition leaders and parties that many times resort to recklessly promoting violence among the general population, as has been the case in Mexico, Brasil, Colombia and other Latin American countries where old school marxists always oppose liberalization of the economy. Now, as the economic crisis deepen and begins to take its toll in latin American economies, many of these more serious and responsible politicians that seek liberal economic reforms will begin losing their political power in elections, and people will probably resort to voting for the tipycal, radical socialists and populists, as has been the case in Ecuador, Venezuela and Bolivia.
Smitten Eagle:
October 11th, 2008 at 11:41 am
The big question in my mind is whether this is just a System Perturbation, or Something Bigger. SPs have the advantage of highlighting areas of weakness in the systems that keep world finance and governance going. Those highlighted areas of weakness can then be addressed with new techniques and rules of governance.
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If it is Something Bigger, than authoritarian/autarkic regimes may take charge. The drive to globalization will be shown to be entirely stoppable, with Gap states appearing where we thought there was Core connectivity. Mexico already appears to be moving in this direction, with Tijiuana having more violent deaths per month than Baghdad (by a large margin, too!) The basketcase known as Russia also appears to be lurching in this direction. Perverse interconnectedness (black globalization) will work to hamper reconnecting Gap areas to the Core.
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I guess we’ll wait and see.
Ski:
October 11th, 2008 at 1:39 pm
I don’t Barnett ever addresses what happens when the Gap expands and the Core gets smaller. That is a very real possibility over the short term.