Monday, August 22, 2011

An Empire in Decline: Is The Debt Crisis Just a "Prelude to War"?

Carl Philipp Gottfried von Clausewitz (1780-1831), the German military strategist once said that 'War is the continuation of politics by other means.' Given the political dead-end the West seems to be on, his maxim may once again prove all too true.

Western governments appear powerless to confront the current crisis and the looming threat of a depression, with all of the serious consequences that implies. The colossal debt of nations and bleak prospects for growth are creating a panic situation on financial markets around the world. A crash is not a figment of the imagination. The one in 1929 paved the way for the rise of fascism and the Second World War.

It is futile to expect a paradigm shift from the established order. Since the sub-prime crisis in 2008, there has been much talk of market regulation. The noble ideas that accompanied the latest international joint financial agreement have been quickly abandoned. The leaders of Western states, starting with the president of the United States, have failed to develop a clear and convincing way to discuss economic policy options, let alone take strong measures. Markets are stronger than states. It is they that are ultimately the masters - and they impose their own logic. more