the great andre gunder frank once defined crisis (roughly) as a situation where the current balance is so disrupted that it can never be regained in the same place as it was lost.
the recent crisis that shook the stock markets, started davos-going captains of economy arguing whether we're dealing with a slowdown or a recession, appeared to be more or less taken under control in 48 hours by the world's exchanges, thanks a goodn deal to the fed's somewhat belated intervention.
since the balance was regained, then we can't speak of a crisis, right?
this one, is not a crisis that can or will greatly jar the stock markets, which are likely to function as shock absorbers to this quake. the actual impact spreads deeper into the core of world economies, kicking their behindsto up and catch with the tidal waves of globality.
the fed naturally took the world economy as a whole in consideration whille making its move but its actual target was the rejuvenation of america's economy; more precisely, opening up to the world the in-bound economy of introverted america that i recently mentioned in a post.
america's economy, on the whole, is probably vital enough to survive at least a decade of what is conveniently (but mistakenly) referred to as isolationism. however, strong is hardly synonymous with competitive. in america, as well as all over the western world, many jobs and subsequent incomes were forfeited to rising new economies as chindia and adjacent countries. many businesses that fed americans in the 1970s have now moved to asia - and africa is in wait for asia's leftovers. in the last two decades, the global wealth from hi-tech goods and innovative services kept unqualified job markets in the west as full as cotton mills once did, but slowly, a saturation point was achieved.
following the logical course of globalization, the only way is to rev up homely economies; the traditional businesses that have made fortunes and have built america into the largest world-economy by far, to levels of competitivity where they can do the same for (theoretically, at least) the entire world. in practical words, it is a question of making a cadillac as rational an option for a hungarian family as a honda borrowing the capital from turkey.
obviously, such an undertaking can achieve success only through a major reconstruction that has to follow a calamitious crisis and recovers some new balance at far higher average levels of technoology and innovation. for instance, like developing a hybrid engine that runs on laughter, to keep the cadilllac moving at no cost...
as a rational means of setting a huge economic potential that corresponds to three thirds of the country's total might in motion, whipping consumption is the obvious best option. low interest rates are imperative both to boost people's spending and to encourage businnesses to more productive ventures.
hence, the crisis is one of inadequately productive economies, rather than a financial shake up. sure, the financial system will have to adjust and adapt to the new impetus but will have to keep it going unless it, too, risks a majestic corollary collapse.
and hence, a brake is going to apply on the rolling train of globalization - a trend already in motion since the eu enlargement and the recognition of the recent polish plumber syndrome by the european public. this, in essence is a period, favoring home-grown economies over the "foreign" (*); a respite for local, regional and national businesses strained under the unfair competition from chindian goods, so that they can have a chance of getting back in the game.
not a return to mercantilist protectionism of course... the new term is more comparable to a referee interfering with a boxing game in order to give a fighter slugged below the belt time to regain his breath and composure.
what about the working class? after all, marx's proleteriat is the essential body of consumers that keeps the wheels of economy turning. the western working man, now faces the challenge of becoming a productive force in itself, so that his labor becomes the indispensable element to keep the economic world going on - the only such labor is that of the mind, so heretofore beginneth the real knowledge society.
now, let's take a look at chindia et.al. - the so called emerging economies that, in reality, are exiled or exported enterprises from the west.
despite the protests, it seems mathematically solid that globalized business has contributed to the welfare and wealth of those remote places, in many instances at the expense of the western proleteriat. if capitalism is not suddenly going to metamorphose into a charity system, that mutual advantage is going to be preserved.
however, where chindia et.al. are concerned, it needs to be reitirated that we are talking about an economy, where the capital, the technology, the know-how and decision processes and even the markets are dominantly western controlled. and although an impressive number of scientists, technicians, managers etc. are increasingly assuming responsible roles and some prosperity does transfer to the states and administrators of host countries, without the western input, the whole chindia et.al. adventure is, kindly, kaput.
consequently, the time has also come to call chindia and its upsetting influence to line; i.e., toward a more systemic organization where unfair advantages will not hamper core western establishments inordinately where the essential principples of capitalist competition are concerned. as a matter of fact, china, for instance is a slave market with an unending supply of dirt cheap labor - which is also summarily dispensable, too, as work accident stats testify. the situation does not change much elsewhere around, either. chindian goods emit more than their fair share of effluents and carbon gases, consume too much energy, are known to be produced with harmful materials (as toys that children have bought in turkey) etc., etc...
in other words, chindia productions are susceptible to regulatory censorship from western markets and consumers, due to a plethora of shortcomings in their philosophy of state (or raja or sheikh or bwana or sultan) managed capitalism.
thus, a ball has started rolling that will not come to rest in its point of origin, although it is likely to cross a "turbulent" and tumultous path. that, in the words of the great andre gunder frank, is a crisis.
what i attempted here is a conjecture about how the path of the crisis must travel for optimal overall results. crises, though, are not famous for following rational, globally optimal courses. stupidity is one virtue humanity has insistently maintained, since adam gulped down eve's apple. after all, politicians are going to be instrumental in the way this crisis is to be managed. and history bellows loud enough for even the stone statues of yesteryear's politicians to hear that wherever politicians and states are involved, the effluence is weirdly attracted to the fan.
one last word: there is also an irrationally rational possible (though less probable) and impeccably humane course, the whole crsisis shindig may veer to: a revival of the 1968 "hippie" revolution (**) - but that is to come later... the flower-power golden dawn of the polis as the abode and asylum of freedom, peace and wisdom once again!
(*) foreign, as in chindia... since this is really an era of globality, however, there can be no backbreaking of such developing remote economies. another likely method of bringing the "foreign" home, is to increase home's share in the productivity of the foreign... imagine the istanbul stock exchange quoting vietnamese rice packing company shares!
(**) for those, especiallly ex-commies, who do not accept 1968 as a revolution, i recommend (again) the great immanuel wallerstein's "1968, revolution in the world-system: theses and queries", in theory and society, vol. 18, no. 4, july 1989.