Not a Recession but a Global Economic Restructuring …
Summary: What we are experiencing is not a recession, neither great nor small, but rather a global transference of wealth, power and prestige on an unprecedented level. (This article, which appeared in a slightly differing form earlier this year, is written by Paul JJ Payack and Edward ML Peters.)
Austin, Texas, September 7, 2010 — Originally alluded to as a ‘Financial Tsunami’ or ‘Financial Meltdown,’ the major global media continue to call our current economic condition ‘The Great Recession’. In the beginning, most comparisons were being made to the Great Economic Depression of the 1930s, more familiarly known, simply, as ‘The Depression’ in the same way that many still refer to World War II as ‘The War’. But even these comparisons frequently ended up referring to the recession of 1982, yet another so-called ‘Great Recession’.
The difficulty here stems from the fact that this economic crisis is difficult to express in words because it does not resemble any economic crisis of the past — but rather a crisis of another sort.
In On War, one of the most influential books on military strategy of all time, the Prussian career soldier Carl von Clausewitz (1780 – 1831) stated one of his most respected tenets, “War is not merely a political act, but also a real political instrument, a continuation of political commerce, a carrying out of the same by other means,” which is frequently abbreviated to “War is diplomacy carried out by other means’ and by other rules than those of the political and financial norm of the recent past.
We believe that the reason the “Great Recession” label doesn’t fit now is because what we are experiencing is not a recession, neither great nor small, but rather a global transference of wealth, power and prestige on an unprecedented level, carried out ‘by other means’ and by other rules than those of the political and financial norm of the recent past.
This fact is entrapping two US presidents, from radically diverging political viewpoints, in the same dilemma: describing an economic phenomenon, that doesn’t play by the old rules. Therefore the difficulty experienced by President Bush as he struggled to describe how the US economy was not in a recession since the GDP had not declined for two consecutive quarters, the traditional definition of a recession, even though jobs were being shed by the millions and the global banking system teetered on the brink of collapse. Now we have President Obama, attempting to describe how the US economy is emerging out of a recession, though the collateral damage in terms of the evaporation of wealth, mortgages, and jobs remains apparently undaunted and unabated.
The regional or global transfer of wealth, power and influence, the destruction of entire industries and the so-called collateral (or human) damage are all hallmarks of what is now being experienced in the West.
If you carefully disassemble the events of the last decade or two, one can see them as the almost inevitable conclusion of a nameless war that began with the collapse of the Soviet Union, the embrace of a form of the free-market system by China, India and the other rising states, an almost unprecedented transfer of wealth from the Western Economies to the Middle East (Energy) and South and East Asia (manufactured good and services), and the substantial transfer of political power and influence that inevitably follows.
It currently appears that the Western Powers most affected by these transfers cannot adequately understand, or even explain, their present circumstances in a way that makes sense to the citizenry, let alone actually reverse (or even impede) the course of history. In fact the larger realities are playing out while the affected societies seemingly default to the hope that they ultimately can exert some sort of control over a reality that is out of their grasp and control.
The good news here is that the transfers of wealth, power and influence has proven relatively bloodless but nonetheless destructive for the hundreds of millions of those on the front lines of the economic dislocations.
And it is in this context that the perceived resentment of the Islamic and Arab states should be more clearly viewed. This is especially so as they watch helplessly as the new global reality and re-alignments unfold.
In conclusion, it can be argued that the difficulty in naming the current economic crisis is the fact that is not an economic crisis at all but rather a transformational event involving the global transfer of wealth, power and influence, the destruction of entire industries along with the associated collateral (or human) damage.