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Jay Currie

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6/05/2005

The Brittle West

The fragility of the structure of the West's economic system is easy to exagerate. After all, the American economy is still huge, Britain has become highly productive, Canada has a lot of oil and, perhaps as importantly, water. Japan, notionally a Western nation and card carrying member of the G-7 has lots of American Treasury bills.

Yet, for all of that, the consumer debt, the housing madness, the coming oil shocks, the brittleness of the EU and the coming end of Canada's hundred and twenty years as a bi-cultural nation, all suggest a degree of wariness is in order.

After the last American election it became popular on the American left to spend a good deal of time suggesting that the entire economic structure of America - and, often by extension, the West in general - was profoundly suspect. Adverse economic statisitics were seized with glee in order to demonstrate that the "Bush regime" might be able to win ("steal") elections but, so what, the American Empire had jumped the shark. From peak oil to the balance of trade, Uncle Sam was on the wrong end of economic history.

This was, and remains a profoundly conservative, view of the world; but then again the American (and Canadian and non-Blairite British) left is a profoundly conservative bunch of folks. It is a view which is profoundly suspicious of technilogical solutions, sceptical about the motives of politicians and businessmen, hostile to the idea of captialism and free markets and, at a profound level, in reaction to the entire idea of wealth creation.

Which does not make its critique any the less cogent no matter how much one might dispise the motivations of that critique.

Peak oil is a reality - the only open questions are price and how quickly hydro carbons will actually run out. The American balance of trade and budget deficit are more than a little troubling. But the issue which I am inclined to thing the left conservatives have too heavily discounted is the brittleness of the West's economies.

Brittleness is about the capacity of a structure to survive an shock. The obvious and best example of a shock would be 9/11. America shut down. Billions of dollars were simply lost in the charred heaps of the World Trade Center. The loss of life was horrendous; but the anticipated loss of confidence didn't happen. While much ink was spilled on the rather useless question "Why us?" Most of America absorbed the blow and got on with business and life.

In a way, the very pointedness of the 9/11 shock, the fact that it was so concentrated and without follow up from al-Qaeda, meant that its effect was to boost rather than destroy American morale. (An outcome which anyone who knew America was unsurprised by.)

I suspect that a similar attack would create much the same reaction; but I also suspect that, not withstanding the gloomier warbloggers, it is unlikely that such an attack will be mounted.

Instead, the resilience of the American and Western resolve are going to be tested in quite different ways over the next decade.

I am frankly a bit bored with the pleasures of watching Dithers and the CPC race to the bottom. So a few thoughts on what I suspect will be the real issues of the next decade on a global and national scale will follow.