Mutually Assured Penury

So this is interesting- both from a political perspective and (if you'll excuse me) an energetic perspective.

Now I don't think this is really going to happen, but with people all up and about it about the continued preeminence of the dollar in a time of crisis, it is worth considering the implication of some of the proposals being floated.

Most non-US citizens are concerned that the country that was so flagrantly irresponsible as to get us into this financial mess is still the country whose currency is the reserve that props up the world's economies. That just makes everyone go all itchy.

Particularly China. While many Americans have quietly worried that one day the Chinese would call in the chips that they have been lending us - or worse, switch to the Euro as their reserve currency, it seems pretty clear that nothing like this could really happen. The EU is still a fragile enterprise (and in my opinion still mostly a pipe dream that hasn't woken up yet), and no sound nation would bank on its decade old currency for the long run. China simply has no other serious options other than the dollar. We've got them by the short and curlies - and they us.

While this is hardly a sturdy foundation for the US Culture of Debt, it nonetheless has held for some time and will likely continue to in the future.

But let's fancifully look at what would happen if China got their "dream wish" to develop a universal currency to replace the dollar. Such a concoction would relieve them of their half of the foolishness-equation in not letting their currency float and getting too deeply in bed with the dollar. (Krugman writes convincingly about this in today's Times.

I agree with Krugman that this would be a bad idea. But given America's weak hand at the moment and given the rest of the world's (read: Europe's) desire to plague the planet with policies that have kept them in stagnation for half a century, it seems that a global socialist outcry might actually catch the ears of some of the key players on the world scene.

Like I said, this would be a disaster. I have written elsewhere that socialist policies work great in culturally/racially/religiously homogeneous societies. Where everyone in the culture is brainwashed by the culture into believing the same things, one can create a system of laws and norms that satisfy the people of that culture - while leaving the taboos to the designated scapegoats just outside of the culture, historically the Jews and now more and more the Muslims.

The humanistic beauty of Capitalism is that it generally makes for a culture without scapegoats. Because the shadow side of the culture is openly acknowledged (greed is good) and not forced onto a minority (future-scapegoat) population through banning of finance and profit-making, for instance, Capitalism embraces the outsider rather than flaying him. This inclusiveness goes hand in hand with Capitalism's apparent "lack of culture" because the norms of the culture are always subject to change. It is therefore more unstable, but less entrenched and prone to scapegoating than the European models.

This is why Socialism works in Germany, Italy, and Britain - but why the European Union will almost certainly fail. The disparate cultures (and how disparate they are) have too many cultural norms out of common for an "ueber"-socialism to umbrella them all. It simply will not work. Socialism only works locally.

So to attempt to spread a socialist agenda across the entire globe would be sheer folly. Who would establish the "universal" norm set? Sarkozy? Brown? Hu?

The only way to fairly and accurately establish a norm set is through popular electoral participation in legislation and the democratic process. It is slow, unwieldy, and always changing, but it is the most accurate reflection of the will of all the peoples affected by the laws.

If America is the microcosm for the planet, and I believe it is, then for the planet to function together cohesively, it would have to adopt the American style of conflict resolution, rather than the top-down socialist model of various cultural authorities (and/or experts).

This will be a hard pill for the world to swallow, and I don't think it is really ready. Part of what makes America so flexible in this way is its own racial heterogeneity and, more important, its racial interbreeding. Put simply, the world's nations are too racially homogeneous to function peacefully with each other. There are likely tens of thousands of Americans walking around with French, German, Italian, and English blood coursing through the same body. Such people do more good for world peace than any United Nations special agency. They are - individually - diluting the cultural norms that divide the world from itself and are therefore readying the world for the coming age of global unity.

That interracial breeding is a peculiarly American value should not be surprising. And it is why our system is so much more effective for us than it would be for, say, the Swedes. We have less difficulty with cultural upheaval because most of us experience it in our own bodies every day. This is not the case in the rest of the world, so they will tend to cower towards social cohesion rather than the individualistic integration required for global participatory democracy - a direction I believe we are all headed in whether we like it or not.

Ironically to history, this American exceptionalist model is based on a kind of reverse-eugenics. That racial "impurity" is the secret to success and the cause to be emulated rather than racial homogeneity a la Nazism and so many other 'master-race' cultures. This is a philosophy I am comfortable with, both morally and practically, that the superior man will be the one with more strains running through him rather than fewer.

Which brings us back to global interdependence.

The one thing I would find intriguing about a world currency now would be this: that there would be no back-up. Right now, the only hope left for the world economy is for the Asians (and to a lesser extent the Europeans) to start spending. Stop hoarding and let it loose, just like the Americans have. This is one of the only changes that could open the taps again for the global economy.

So what is saving us now, in my judgment, is that we have a few different currencies to play with- we have a couple of ways out.

Imagining into the future, for a moment, that there was only one global currency, were it to fail, there would be no hope, no way out - utter global disaster.

The one saving grace, then, of a global currency would be that it would force us - force us - to obey sound money policies- because there would be no one left on earth to bail us out. Right now, somewhere deep down, those people that borrowed and lent us into this mess understood that the Chinese were there to back us up. The world would not end when things went south.

But if there were but one currency, then that would simply not be tolerable. We would police our own selves with the vigor and discipline befitting a mature economy, and we would not - could not - let ourselves falter. The result of failure would be mutually assured penury. Just as the cold war focused out minds on achieving a mature peace with Russia - the alternative being too much to imagine - a unique global currency would focus our minds on fiscal discipline and mature us as a nation and as a planet.

This would indeed be a worthy - if scary - ride.


But in a way it makes sense. And here I engage the "energetic."

The mutually assured destruction of the atomic age has changed the locus of our survival instinct from physical to financial. Physical, military wars are almost inconceivable between the great powers at this time. It would mean the end of all life on the planet, and we understand that. So from an evolutionary perspective, we have forced ourselves "up" a notch from the physical to the emotional-financial.

This is quite an achievement.

Energetically speaking (and here I know I have lost the Harvard crowd) we have moved from the first to the second chakra as a way of relating to one another. We have made peace with our collective physicality over the last half century. A global currency would force us to make peace with our collective emotionality as reflected through Dollars - or whatever it would be called - as opposed to bodies/corpses.

This would be an extraordinary leap - and one made rather quickly on the heels of the last one that began in the 1940s. That maturing process took about 60 years to gel, with mutually assured destruction being the disciplinarian of our baser instincts to war and murder. How long would it take for a global financial currency to achieve the same effect through mutually assured penury?

I don't know.

Would we have the equivalencies of Cuban Millie Crises, in which the currency threatens to default, and we have to "bring ourselves back from the edge" by having sounder financial regulation? That would be truly amusing, but I see it as a distinct possibility.

We would be growing financially, taking care of ourselves through self-interest, capitalistic principles, rather than command and control regulation which is utterly toothless and ineffective. If the Madhoffs and the Lehman Brothers understood that their actions would cause global bankruptcy and would be treated as a sort of treason, then they would likely act more diligently. Certainly their customers would.

Rogue bankers would be treated - both by the government and by their colleagues - as rogue arms dealers, with the dangers being effectively parallel in the new situation. It would be a time of collective ripening that the world has only seen before during the cold war. And what a marvel it would be.

Cheating a little by looking at energetic systems, we could imagine the next steps would follow within a century or less. "3rd chakra" intellectual maturity would be reached, perhaps through some sort of globalized language.

And eventually a 4th chakra heart maturity would emerge, by which point the human race would be largely unrecognizable from what it was before then. This would be a world I would (likely) want to belong to, a prize well earned through the toil and sweat of a long, 6000 year adolescence.

Universal, global love. It's almost hard to conceive of, and yet it remains a distinct possibility if we are able to survive the tests of the lower planes of exchange an competition - physical, emotional, and intellectual.

This sort of thinking is worth basking in for a moment. It seems almost juvenile to think that way, and yet the process by which it would be arrived at would be nothing if not cynical and rigorous. It would be the delightful fusion of left and right - leftist ideals achieved by rightist means. Universal love and harmony achieved through global military, financial, and intellectual competition, all sealed in the alembic by the discipline of mutually assured destruction, penury, and. . .retardation?

It all remains to be seen. But if somehow we must suffer under European constraints of global socialism and global currency, at least we Americans can look to this even more distant horizon for the inspiration to carry us through the hard times. Certainly the socialist mood is in the ascent right now, and I don't know that America will have the power to overcome it. But if the Euros and the Chinese get their currency, they might be unpleasantly surprised that there will be no one left to scapegoat when their socialist systems fail.

The enemy (as it has always been) will be themselves - and perhaps this is the wake up they require. Too much culture brings stagnation and disavowal of one's own flaws and blind spots. Americans have been learning this for years through our own internal turmoils. Europe has not. Their great wars in the 20th century were really only the beginning. Maybe it will turn out to be their century after all- to thrash about amongst themselves until they get it right. For Americans it would be tedious and boring, no doubt. But perhaps it would give us some time to get our own houses in order so that we can be ready to pick up the pieces.