Will the markets recover? Is this the end of an empire? Who will fall next?
Your first and last questions are simply answered: Will the markets recover? Yes, the markets will eventually recover. Who will fall next? Just look at the news. By the time you read this, whoever I may write here might already have been supplanted.
Some nuance may be worthwhile: While the markets will “recover,” that isn’t to say that this is simply a matter of up and down. Much of what is being destroyed now isn’t going to come back from the abyss. It will eventually be replaced by other wealth.
Your question about “the end of an empire” is an observant one. The US economic position had already been in relative decline as other countries and unions developed their economies. That much is inevitable. We will eventually be outclassed no matter how well our economy performs.
Of more concern is the absolute position of the economy, which had also been in decline, due primarily to irresponsible spending by citizens and irresponsible profiteering by business and their allies in the government. This financial crisis has accelerated that trend. When taken together with an incompetent energy policy and no apparent infrastructure policy, it is clear that our position as an economic superpower has been compromised. Over the past several years we have squandered many opportunities to reverse the damage. Now there are fewer options left open to us.
Reasonable people can disagree, but I don’t think America will be able to hold it together. I predict a Britain-style soft collapse of our “empire” even as American lifestyles in itself remain much the same as they have been. At this point in time it would behoove us, I think, to strengthen our alliances, as conventional powers must do to safeguard their interests.
The end is neigh!
That’s very cute! Did you do that on purpose? Who cares!
“Excuse me! You haven’t finished painting me!”
But chances are the economy will begin to rebound in a year or two, the new president will be credited despite the fact that the government has precious little control over the economy, and in another 50 or 70 years it will happen again in some market or another (I predict... the widget bubble will burst).
I disagree. I expect our economic situation to continue to deteriorate for at least another two years, followed by a long period of a very slow recovery. In fact, one of my chief political worries is that the Democrats, after taking power next year, are going to get stuck with all of the blame and then booted out, with the American people flying right back into the arms of the same economic conservatism that has brought us all down to such depths of humility. I hope they are candid with the American people right from the onset. So far, I don’t see signs of that.
On the other hand, you may be right about the cyclic nature of history. During the Great Depression, and afterwards, many safeguards and checks were built into the system to prevent another financial disaster. Republicans, with the aid of conservative Democrats, have now spent over a generation trying to dismantle those safeguards so as to allow greater profiteering. That worked for a while, but eventually the thing unraveled as it had to do, and now we’re stuck with another major crisis. No doubt there will be new safeguards built back into the system under the next administration, and it seems quite plausible that they will eventually be threatened again in the future by the forces of commercial avarice.
Another possibility in the near future is always total systemic failure of the entire modern industrial complex leading to mass starvation and ending in war, followed by a renaissance of small-scale technology after massive depopulation and destruction of existing institutions makes the highly centralized and coordinated industrial system we know today impossible to function.
What the hell is this?
Ramsus, what you describe is not literally impossible, but it is extremely improbable. In the event of a global economic crash—itself very unlikely when we define a “crash” to entail the debilitating macroeconomic breakdown of which you speak—what we would see is a lot of industrial partitioning as companies revert from worldwide commerce and logistics to national, regional, or local practices. Money, assets, capital, labor, and resources would be diverted to new use. Not all of it. Some would sit idle or disintegrate. Social unrest would develop. Plenty of
wealth would be wiped out. Living conditions would probably deteriorate slightly to moderately for most people. But, enough of it would remain intact to prevent the destruction of the modern world as we know it.
To get to the point of apocalyptic war and all that would require a system so seized up that it remains dysfunctional. I can’t think of any scenario under which that would happen. After a major disaster, economies always reorganize and move forward. There has never been an economy that went down to zero. Even Japan and Germany in the last year of World War II, and the Soviet Union or China under totalitarian communism’s darkest days, and, more recently, countries like Argentina, Sudan, the Palestinian Territories, and even friggin’ Zimbabwe, have all sustained continuously operational economies.
Life continues. Even in Zimbabwe, the “massive depopulation” that media reports would lead us to expect have yet to occur. Do you really think that the developed world, with its centuries of accumulated knowledge of economics and engineering, would fare worse? Well, obviously you do. There have always been people who have predicted the downfall of civilization. Usually they do so out of religious reasons, but, hey, some people are just bitter in general. Honestly, the rest of us have better things to do with our time than humor these anarcho-libertarian wet dreams of yours, Ramsus.
That came out harsh, which wasn’t my intention. I just don’t have a lot of tolerance for 1970’s style survivalist bullshit. It occurs to me that you may have been speaking hypothetically or tentatively, so, if you were, don’t take the above personally.
Only a global environmental catastrophe capable of
physically destroying an economy or humanity itself, could plausibly bring about an abrupt end to the modern world. And if you think about how likely those various possibilities are, you should rest a little easier.
That's also why we should focus more energy on developing more decentralized, smaller-scale technologies, so such a catastrophic event won't send us screaming back into the stone age. And yes, I'm using Theodore Kaczynski's terminology when I say small-scale technology.
You’ve got guts for subscribing to the ideology of a terrorist. Then again, it’s not much different than people who believe all that laissez-faire crap, now is it?
In economic development, decentralization progresses into centralization as societies merge and grow and undertake new ventures that require extensive collaboration. Then, centralization tends to progress into decentralization again as it becomes not only possible but sometimes more efficient to distribute systems. I expect we’ll see something like that happen with our electrical power grid in this century, with more end-users generating some of their own power in addition to the enormous main power stations that can most efficiently provide a base load.
However, drawing an economic development arrow immediately to decentralization is always a bad idea. You can’t skip the centralized steps, nor would you ever want to do away with centralization entirely. By definition, some development will only be possible at that level. You can’t decentralize commercial jetliner production, for instance. You can spread production to companies around the world, as Boeing has done, but you can’t have small individual companies independently working to manufacture comparable machines. Unless you’re viciously rich.
