The Coming Global Adjustment

Markets around the world, and economies, are having to adjust to gathering tectonic forces. One is that there is a much higher demand for oil to fuel the awakened giants of Asia. This process is having a happy consequence of moving money to South America and Africa after decades of debt imprisonment. Just last week African leaders asserted themselves in the face of a silly European attempt to patronise them without offering concrete reforms like, say, a monetary stabilisation fund or a Mediterranean community.

A second reality is that the huge credit imbalances in the UK and USA, and the deficits, excess money supply, and balance of payments deficits across the west are combining with demographic decline across Europe. This is forcing states to think about the long-term survival of their cultures, welfare states and their view of immigration. The confusion on this issue is profound. This is particularly since the west has focused not on the surplus labour available by the population booms of the poorer countries but upon the potential for crime and terrorism that those from those countries are held to represent by those in charge of the media.

The third shift is in the rising global demand for food. This is having an odd effect. Farm incomes, which have been depressed for decades in the west, may start rising just as urbanisation and climate change--largely the fruit of global economic development--are gathering pace. Equally, even though we are beginning to talk about restricting trade because of the loss of service sector and industrial jobs, states are lowering tariffs and encouraging the subsidy of agriculture across the world in an attempt to increase food supply and to lower inflation. This means trade without the destruction of agricultural incomes in rich countries...unless governments are obsessed with over-regulating farms and supermarkets and megashops can soak up any benefit and stop farmers profiting. That wouldn't happen in the US or England, would it?

My regular reader, whoever he or she is, will know that I have been banging on about all this for some time.

These are big shifts, which will shift politics. But there is one more poisonous legacy of the very long boom through which we have travelled. Everywhere in the west, a media class of political professionals with very little substance and very little association with the truth has learned to hold down social mobility and populism by the construction of media and economic barriers to their peoples. This has been acceptable so long as the boom has been on and people can be bought off with credit and foreign holidays and the argument that when you share your ownership of a house with a bank, you own it. But what will happen if things go very wrong?

What are we going to do? Wave some vague theory based on some Anthony Giddens 'insights' at crime and the collapse of hollowed out communities? Deny hysterically the vast disconnection of those who have votes from those whom the media allow to represent them or the politicians present to them? Repeat legalistic political correctness and lazy anti-nuclear, anti-GM 'environmentalism' and easy bans on social practices like smoking? Wait till the waters rise or Asia acts? Bully people into recycling?

We've spent such a long time reacting to fears that are either false or which would have been manageable if we'd kept our reason. We should have been steady, rather than allowing the media and their silly cynical employees to panic everyone in alliance with lobbies and mad scientists. We should have been building railways and airships and proper school curricula besides fields of GM food, not airports and motorways near celebrity-obsessed godless holding pens for class-divided kids.

There's another thing too. Do we think that the rest of the world will stand still? What if all this results in an army coming from 'them' rather than from 'us' in a couple of decades, or the fall of our banks or our states?

I do this every Sunday night. I have a weekend of breathing space and then, for one last weekend blog to avoid the more mundane pressures I have, I have a look at what's coming. Very few of us are remotely ready and the drums get louder every week. I really hope we are not living through the fall of the west and waiting for volcano day.

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