The Good News on the Global Financial Downturn
Monday, May 25, 2009 at 5:50AM When the global financial contagion kicked in last fall, the blogosphere was quick to predict that a sharp uptick in global instability would soon follow. While we're not out of the woods yet, it's interesting to note just how little instability -- and not yet a single war -- has actually resulted from the worst global economic downturn since the Great Depression.
Run a Google search for "global instability" and you'll get 23 million hits. But when it comes to actual conflicts, the world is humming along at a level that reflects the steady decline in wars -- by 60 percent -- that we've seen since the Cold War's end. As George Mason University's Center for Systemic Peace (CSP) notes, that trend applies within the Muslim world, too, so even America's "war on terror" has not quite lived up to the pessimists' expectations.
Reader Comments (7)
What has fascinated me since 2001 is how globalization has actually accelerated when we were supposedly all going to hermetically seal ourselves and our economies off. It's like 9/11 had the opposite effect. And I'm seeing some signs that, post-AIG (can we make that the financial equivalent of 9/11?), globalization has actually been stronger than many predicted.
It's almost as if there were some irresistible force, like gravity, pulling the world closer together.
Even better news will be, when we come out of this sever downturn we don't have a Nazi Germany, somewhere on the planet. Seems like we will pull that very low standard of success.
Don't know if I buy the "worst since the Great Depression" though. While no two downturns are similar enough to make a good comparison, especially at the front end, the late seventies/early eighties still look worse than the current situation in my book. If we backed away from some of the wishlist items and made efforts to mitigate the uncertainty perceived in the business community, the current situation would turn around quickly.
But getting back to the main point about stability, one could argue that some of the skirmishes (Georgia) with origins that predate the downturn, resulted as much from market-based dispute resolution mechanisms not yet being in place, as they did from the players' old habits of settling disputes with artillery.
Perhaps we're getting closer to the point where we can scrap the U.N. and replace it with a global chamber of commerce?
*MAB = Mutual Assured Bankruptcy
Though, OTOH, I tend to feel WWI was more of an extremifying factor than the Depression, since neither side was happy with how it was fought, and after all, Russia and Italy went extreme before the Depression.
Not only will the results be more cheerful, they will be more useful and relevant for practical efforts.