Is empire cyclical, doomed to birth, consummation, establishment, decline and desolation? Or are there other futures for large regimes? Can large complex systems create new kinds of future, or are the winds of fate far too strong? Can we predict decline, change it, improve things, create order out of chaos?
Nobody is better at exploring the large questions than Niall Ferguson. This lecture is long and well-considered, not a candidate for viral videohood. Given the subject, that is perfect.
While the media was arguing about whether Ben Bernanke knows what he’s talking about, while America was discussing the meaning of “double dip” recession, or hockey stick recession, or V-neck, or crew cut, or whatever, while Sarah Palin’s daughter got back with Levi or didn’t because he’s maybe got another girl pregnant or maybe she set it up to sell books or not - something real and important was happening. As usual, Gregor MacDonald was on top of it:
“Russia has now surpassed Saudi Arabia to become the number one oil producer in the world. This is not an event that happened last month, either. The leap forward emerged as far back as 18 months ago, in October of 2008.”
It is usually a source of alarm when the Russians start taking the upper hand in things, but you would never know it by listening to American media, which is still in a tizzy over whether any major secrets were spilled by the Wikileaks documents showing us that Afghanistan is a tricky place to govern.
Incidentally, I hear that Wikileaks may come out next week with a chilling set of leak documents showing that fire is hot, puppies are cute, and that the trend for the sun setting in the west may continue.
Meanwhile, back in the rest of the evolving world:
It’s clear that Saudi Arabia has been a very different kind of oil producer than Russia, in the past ten years. I would encourage readers to think about, in particular, the period starting in late 2005 through late 2007 when against a backdrop of steadily increasing prices Saudi Arabia production fell by nearly a million barrels per day.
Obviously a major power shift will be going on as a result of this development. The priorities of the Middle East could change rapidly if the sheiks perceive a permanent contraction, and you can read history if you want to see what the Russians tend to do with significant power over their neighbors.
My latest interview with Pam Atherton of A Closer Look Radio, covering the superconnection between peak oil, European fiscal crises, local economics, and even the iPad. It’s all about institutions in transition and what you will do to assure your future success.
Between the Greeks staying in the European monetary union, or Detroiters keeping their dry cleaners and doggie-daycares afloat, there is a considerable amount of talk about the role of currency. The crux of the European issue is that the Portuguese and Greek economies are so different from the French and German ones, it is difficult to keep one currency with the same rules and assumptions in play. The fringe actors are no longer able to keep up the facade required for membership in the club.
We are seeing a microcosm of this in local towns in America, and the issue comes down to the ability to maintain a central currency. We note with interest an uptick in stories about local currencies not seen since the banking meltdown of 2008 and 2009.
Last year, two Detroit tavern owners were sitting at the bar, sampling their beverages and bemoaning the local economy — no one in the city had cash, and when they did, they spent it in the suburbs. Then the pair hit on a solution: Print their own money.
It is, after all, perfectly legal for anyone to issue currency, as long as it doesn’t look too much like a U.S. dollar. Thus was born the Detroit cheer, a local scrip accepted by a handful of city businesses, including a pizzeria, an electrician and a doggy day care center.
But why would people go to such trouble? Money is money, right?
When the Treasury prints billions to bail out banks and automakers, people look for alternatives. These folks may look nutty now, goes the quip, but wait till the dollar goes the way of the Argentine peso. Then you’ll be exchanging a wheelbarrow of cash for a bay buck, local currency boosters say.
What could this mean in terms of business strategies? One of the most likely implications would be a return to local distributors, those able to deal best with the local market and even local currencies. Compare this to the recent trend of market consolidation in a variety of industries. It just doesn’t match.
First Greece and Portugal, but they are on the outskirts of civilization. First Detroit and Western North Carolina, but those places aren’t prime time.
Next…California? Spain? Iceland? New York State?
