Markets around the world continue to plummet, with no end in sight. A contagion that began as a product "made in America" - a subprime morass - has now spread around the world, a virus that has now all but brought down some of Europe's biggest banks and is pummeling "emerging markets" (a combination of words that hindsight may come to regard as a terrible euphemism). Europeans have been waking up the past few mornings learning that their life's savings were in danger of evaporating because of bad loans and collapsing housing values in various parts of the United States. They might rightly wonder what reality they are inhabiting, where their savings can disappear because of bad loans made in the American real estate market.
Globalization giveth, and globalization taketh away. The past few years we have heard much of its promise, the glories of mobility and opportunity for those who embraced a world made flat. We are now witnessing how quickly a contagion runs through a world without hills, valleys, borders and cultures. The very genius of the global system - to dismantle barriers to trade and movement, to "flatten" the world (a metaphor that means that the world looks essentially the same from the financier's point of view) and remove frictions within the system that might slow the pace of global capital's trajectory - is on the verge of proving to be its undoing. We are now seeing the downside of the upside: no ability to stop the unraveling, no friction to slow the spreading contagion, no borders at which the virus will stop. We are told that this global system was so large and efficient that it was built not to fail: by spreading the risk everywhere and nowhere, no single point could bring down the entire edifice.
It's amusing, or maybe painful, to recall that only a decade ago we collectively watched, and re-watched, and re-watched the movie "Titanic," convinced it was actually a story about how love knew no bounds rather than a story about human hubris. The demise of the ship was portrayed as the fault a greedy speculator - Charles Ismay - and a foolhardy leader (captain? President?), and not the over-confidence of a generation who believed that technology and human ingenuity could REALLY build a ship that could not be sunk.
At the end of that movie, it turns out there is a happy ending for the young lovers: they are reunited in Heaven, which, it turns out, resembles the main deck of the Titanic. Perhaps if we were to revisit them there in a sequel, we would discover that they - and we - were mistaken about their destination. For, as Wendell Berry has reminded us in his recent short masterpiece "Faustian Economics," hell is the place where we believe no limits apply, where we believe our power and knowledge to be limitless, and thus become slaves to our appetite and lose freedom in the name of false liberty.