I was recently discussing the global financial crisis in email and thought it would make a decent post in and of its self:
…One last contribution, the current Euro crises has a very similar feel to the breakdown in diplomacy leading up to world war 1.
I’m not suggesting we’re going to have a sudden outbreak of world war in Europe. I’m intuiting that the European leaders are in a very similar existential position that there predecessors were in Pre-WW1.
WW1 was the collapse of the European establishments/empires, the system/web of ruling aristocracy and royals. The European establishment then, could not comprehend that the Previous system of Westphalia nation states, international royal families and empire would un-ravel so quickly from internal contradictions. If you study the diplomatic correspondence of the time, the Leaders were in an almost hysteria, careful diplomacy over decades had broken down, chaos reigned. The nations went to war not because they were warmongers, but because their respective nations establishment interests and issues were so intertwined that no accommodation or concession could be made.
Today, we don’t have a pan European aristocracy, we have an international, extended and incestuous banking/ political establishment, like their predecessors intertwined interests, there financial and economic obligations commit them to a course of action where no quarter or concession can be made such are the existential seriousness of the issues they face. Hysteria and chaos is beginning to take hold. This is an extinction of a global culture and establishment, they know of no other world but of fiat, fractional lending and deficit spending. To demand a gold standard, and balanced budgets, regardless of the current economic viability of such demands. Is a kin to asking the banks and the government(really the permanent civil service) to simply a-null themselves, to disappear, to have world without them. I find some libertarians naive in this respect, though they mean well. These establishments are going to fight to survive regardless of the economic stupidity or the annihilation of the middle classes. It is similar to some extent to the collapse of the soviet establishment a few years before the fall of the Berlin wall. This is why they will go to the printing press.
I hope this contributes to the discussions…
Here is a previous post discussing the analogies of debt as a Faustian bargain and existential position.