In reality, it is a self-interested step designed to protect western economies by winding down the debt burden in a controlled manner. Having agreed to these measures, governments are still dragging their feet. They want to minimise their embarrassment as western taxpayers end up bailing out the various banks that have been responsible for this sorry mess. The writing off of debt implies disorganisation. Money loses its meaning as a store of value. The gainers in this case will be the financial institutions who are given a face-saving way out of the situation created by their own illjudged lending decisions.
Many solutions to civilisation’s problems may simply involve buying time, making the situation worse in one obscure area in order to patch things up somewhere else.
In the future, therefore, to gauge how the descent is going, one should not be taken in by statistics. The crucial measure of economic health will be the evidence of genuine innovation that people experience in their everyday lives. If some major new item appears in one’s home, comparable to the vacuum cleaner, the video recorder, or the microwave oven, one can assume that the dark age is getting further away, perhaps by a quarter of a century or more. On the other hand, one may find it difficult to identify what is driving the stock market. One’s own consumption may be of mostly transient pleasures, and one may worry whether one’s work is really making a positive contribution to the commonweal. In that case, the economic descent will be proceeding unchecked.
However, in practice, monetary union will probably not cure the underlying rottenness of the economic order, and European economies will continue to stagnate over the long run. Given ongoing failures of entrepreneurship, the economic unification of Euroland is likely to accelerate the impoverishment of some regions, as workers, companies and capital move more easily to where the pickings are richest. The EU proposes to counter this by channelling money into the depressed regions via various grants and loans, but this is sure to fail as much of the money will be wasted and misappropriated.
Since the ending of communism, there has been an explosion of entrepreneurial activity in Russia. However, the political weakness of the post-Soviet state means that it has been allowed to take on a criminal form. The Russian mafias have built up impressive empires based on such lucrative lines of business as extortion, drug running, art theft, and forcing women into prostitution. In this respect, Russia’s experience is a foretaste of the future for western countries. As they continue to develop in the context of ongoing political
disintegration, their economies will also become increasingly illegitimate and out of control.
The collapse may therefore begin in the poor, peripheral countries, where institutions are weakest, but it will inevitably spread inwards to reach Japan, American and Europe. In the western Roman collapse, such an inrush of darkness took more than half a century. The future collapse, however, is likely to occur in a much shorter time, owing to the speed of contemporary communications. When south Asia or Africa experience such anarchy and comprehensive business failure that urban life is abandoned there, a similar fate for the west may be only a decade away.
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