Fear and loathing in the global economy

Every once in a while, I read an article that is worth posting largely without comment. Tony Judt, a professor of European history at NYU, has written one such article, a review in the New York Review of Books of Robert Reich's Supercapitalism.

The key paragraphs:

But we have good reason to believe that this may be about to change. Fear is reemerging as an active ingredient of political life in Western democracies. Fear of terrorism, of course; but also, and perhaps more insidiously, fear of the uncontrollable speed of change, fear of the loss of employment, fear of losing ground to others in an increasingly unequal distribution of resources, fear of losing control of the circumstances and routines of one's daily life. And, perhaps above all, fear that it is not just we who can no longer shape our lives but that those in authority have lost control as well, to forces beyond their reach.

Half a century of security and prosperity has largely erased the memory of the last time an "economic age" collapsed into an era of fear. We have become stridently insistent—in our economic calculations, our political practices, our international strategies, even our educational priorities—that the past has little of relevance to teach us. Ours, we insist, is a new world; its risks and opportunities are without precedent. Our parents and grandparents, however, who lived the consequences of the unraveling of an earlier economic age, had a far sharper sense of what can happen to a society when private and sectional interests trump public goals and obscure the common good.

We need to recover some of that sense. We are likely, in any event, to rediscover the state thanks to globalization itself. Populations experiencing increased economic and physical insecurity will retreat to the political symbols, legal resources, and physical barriers that only a territorial state can provide. This is already happening in many countries: note the rising attraction of protectionism in American politics, the appeal of "anti-immigrant" parties across Western Europe, the call for "walls," "barriers," and "tests" everywhere. "Flat worlders" may be in for a surprise. Moreover, while it may be true that globalization and "supercapitalism" reduce differences between countries, they typically amplify inequality within them—in China, for instance, or the US—with disruptive political implications.

In the midst of an unfolding credit crisis that could wind up destroying major US banks and who knows what else, Professor Judt is sobering as only a historian of the European twentieth century can be.

Read the whole thing. (HT: Andrew Sullivan)