Wednesday, October 15, 2008

The Return of Nation-States's free offering this week is an interesting little article by George Friedman ("States, Economies and Markets: Redefining the Rules") on the subject of the US/European efforts to rescue the banking system. It's worth your attention, and available on Stratfor's site.

Meanwhile, here's a little tidbit for thought, taken from the piece. Wish I had written it: Professor Friedman could almost be channeling me:

What is most interesting in the long run is the fact the Europeans, even in the eurozone, have not attempted a European solution. Nationalism is very much alive in Europe and has emerged, as one would expect, in a time of crisis. . .
However, it has always been our view that the state ultimately trumps the economy and the nation trumps multinational institutions. We are strong believers in the durability of the nation-state. It seems to us that we are seeing here the failure of multinational institutions and the re-emergence of national power. The IMF, the World Bank, the Bank for International Settlements, the European Union and the rest have all failed to function either to prevent the crisis or to contain it. The reason is not their inadequacy. Rather it is that, when push comes to shove, nation-states are not prepared to surrender their sovereignty to multinational entities or to other countries if they don't have to. What we saw this weekend was the devolution of power to the state. All the summits notwithstanding, Berlin, Rome, Paris and London are looking out for the Germans, Italians, French and British. Globalism and the idea of "Europe" became a lot less applicable to the real world this weekend.
Whatever the international lawyers and bankers think, history is not yet finished with the nation-state. Moreover, economic and financial considerations, although important, will be impacted by the new geopolitical reality that began to emerge late last year, when it became apparent that the Europeans were unwilling, and the US unable, to stop the acquisition of nuclear weapons by Iran. Events quickened this summer with the Russian humiliation of the US in Georgia. Now the apparent collapse of the world financial system (don't kid yourselves, the the government maneuvers of the past three weeks are band-aids, only) and the impending take-over of the US by a left-wing regime have created a geopolitical outlook profoundly unfriendly to US power and US interests.
Pity our children. We grew up in a world where the Main Enemy was operating considerably under its potential; hobbled by a ridiculous ideology and a worse economic system. Now America confronts state actor rivals (not to mention a raft of non-state actors) not held back by ideology, which are economically and militarily hungry, who want to change the world system (which currently suits America and the West), in ways that we will not like, but that we are going to find ourselves powerless to prevent. We're bankrupt, and on the point of installing a regime that will keep us bankrupt and wants us (militarily at least) powerless. Americans want peace, but are heading into wars and scary times. I don't know about you, but I want gold, not the dollar, and to get out of the city.

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