Cheap energy and relative peace helped create a false doctrine
by James Howard Kunstler
The big yammer these days in the United States is to the effect that globalisation is here to stay: it's wonderful, get
used to it. The chief cheerleader for this point of view is Thomas Friedman, columnist for the New York Times and
author of The World Is Flat. The seemingly unanimous embrace of this idea in the power circles of America is a
marvellous illustration of the madness of crowds, for nothing could be further from the truth than the idea that
globalisation is now a permanent fixture of the human condition.
Today's transient global economic relations are a product of very special transient circumstances, namely relative
world peace and absolutely reliable supplies of cheap energy. Subtract either of these elements from the equation
and you will see globalisation evaporate so quickly it will suck the air out of your lungs. It is significant that none of
the cheerleaders for globalisation takes this equation into account. In fact, the American power elite is sleepwalking
into a crisis so severe that the blowback may put both major political parties out of business.
The world saw an earlier phase of robust global trade run from the 1870s to a dead stop in 1914. This was the boom
period of railroad construction and the advent of the ocean-going steamship. The great powers had existed in relative
peace since Napoleon's last stand. The Crimean war was a minor episode that took place in backwaters of Eurasia,
and the Franco-Prussian war was a comic opera that lasted less than a year - most of it the static siege of Paris.
The American civil war hardly affected the rest of the world.
This first phase of globalisation then took off under coal-and-steam power. There was no shortage of fuel, the colonial
boundaries were stable, and the pipeline of raw materials from them to the factories of western Europe ran smoothly.
The rise of a middle class running the many stages of the production process provided markets for all the new
production. Innovations in finance gave legitimacy to all kinds of tradable paper. Life was very good for Europe and
America, notwithstanding a few sharp cyclical depressions and recoveries. Trade boomed between the great powers.
The belle époque represented the high tide of hopeful expectations. In America, it was called the progressive era.
The 20th century looked golden.
It all fell apart in 1914.
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