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Dominant Centre

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Wolcott’s got a post up about the coming US fiscal-economic crisis. I try to keep abreast of this stuff – read my FT and the business section of the Times (and Delong, for better or usually worse). But Wolcott’s been reading the subscription sheets of the analysts – worth a look. Just to give you a sense.

There’s a pattern here. As with Peak Oil, global warming, the real
estate bubble, and the various US deficits, there’s a general awareness
of Trouble Coming and yet no sense of urgency or battle plan. It isn’t
that the media, the political class, and the media are paralyzed by
fear or overwhelmed by alternative solutions, it’s as if everyone is
assuming that we can sleepwalk through the next crisis and muddle
through as we always have with only minor hiccups, if any, in our
lifestyles. As Stephen Roach and others have warned, the American consumer is now so indebted and
lacking in savings that there’s little cushion for the next reversal of
fortune. Almost any soft landing could turn hard.

OK, so other than a sort of irrational schadenfreude about the US economy that I (try to) hide under my mattress, why am I bringing this forward? Ferdinand Braudel, in his Afterthoughts on Material Culture and Civilization, advances a theory about financial crises and the shifting geopolitical (and perhaps ideological, cultural) "centers" of the world. I can’t for the life of me find my copy. But here’s John Plender summarizing in the FT a few months back:

No one can satisfactorily explain 1929 financial crash. One plausible theory is that such events
accompany rise and fall of financial hegemonies. Braudel, a French historian, argues that the world
always has a dominant centre. Over the centuries this has gone from Venice to Antwerp, Genoa,
Amsterdam, London and New York. The dominant centre usually presides over a dominant
currency. Being world reserve currency allows country to write cheques that no one cashes. Braudel
dates transfer of power from London to NY as 1929 – and it makes intuitive sense that dislocation
could occur in interregnum. 1987 stock market crash coincided with rise of Japan as main source of
international financial capital. 1974 crash which went further and faster than 1929 coincided with
shift of economic power to OPEC. Now it is not hard to make the case that US has reached high
point – with huge fiscal deficit, low savings, dependence on foreign capital (though this is
offset by
recent productivity gains). US now depends on China to supply capital needs. Economic power is
now shifting to Asia.

When I find my Braudel, perhaps I’ll revise this post. But here’s what I’m thinking about. Does the coming financial crisis in the US foreshadow a shift in not only the political and economic, but also cultural "center" of the world? Will the ideological/cultural center shift with the money and concomitant political power? Can we imagine a world in which the US wasn’t the primary supplier of images, "consensuses," and provocations? After more than a century of dominance, what might "our" work look like, if the more-than-a-century of UK-US dominance was to end?

What would it mean for us, for all this, to take our perhaps foreordained place as workers in a "minor" tradition? 

When I first moved to NYC, I was continually fascinated by the fact that I only had to walk three blocks or so to the Brooklyn Heights Promenade, from which I could see very clearly the river root of Wall Street. Seemed strange and awing, in a way, that my eye could focus, during my evening walks, on the "real" space on the physical location where the cameras of the world framed their "business report" shots. What will happen to my American eye when Wall Street is just another street?

Written by adswithoutproducts

April 12, 2005 at 1:36 am

Posted in Culture

2 Responses

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  1. “But here’s what I’m thinking about. Does the coming financial crisis in the US foreshadow a shift in not only the political and economic, but also cultural “center” of the world? Will the ideological/cultural center shift with the etc…”
    You’re a bit slow if you’re thinking about this now kiddo.
    The apex of American power came at the end of world war II.
    Our culture at this point is as overripe as your prose style (though of course we both know it’s really the other way around)
    On the other hand, your description of Brooklyn Heights and the promenade…
    Sheer Brechtian decadence.
    I think I’m in love.

    seth edenbaum

    April 12, 2005 at 9:47 pm

  2. Seth thinks your prose is overipe? My keyboard directly emits compost in that case.
    Never took so much as a course on economics nor any college level course on civilization(s) except some art history so I am impressed as hell by all the ideas you toss around. Thom Friedman’s Flat Earth book ceratainly agrees that the era of anglo’s calling the financial shots is over. I suspect that when the Asian countries can’t afford to prop up the dollar any more, the sudden buckling of the valuations will produce a spectacular curtailment of US purchasing and look like a big world economic crash. But this time around, we have compounding problems of how to fuel [i.e. literally fuel] the economies. The idea of their being limits to growth is old but the reality of limits is knocking at the door.


    April 22, 2005 at 4:36 pm

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