Culture Guides

You, Me and the Credit Crisis

What the world is it all about?

Some years ago, a friend who has been driving motorcycles around India for the last 20 years found himself staying in a peasant’s hut somewhere in Karnataka. Impressed by his Hindi and his observation of the complicated Hindu customs of personal hygiene and purity, the poor man with not much more than a change of clothes to his name asked:

Ji, India is a poor country. And it is the government who prints the money. So why don’t they just print more money and give it to us so we can buy food to eat?’

My friend contemplated explaining the balance of payments in his pidgin Hindi for a moment but eventually gave up and just declared it would be a fine thing but everyone in power was corrupt. This answer was easily digested and satisfied curiosity on the matter. What the hell else was he supposed to tell him?

Now that it’s impossible to pick up a newspaper without hearing about the ‘credit crisis’ and people across the first world are worried for their homes, their jobs and their future economic security, we might as well be given the same answer. Sure, we can repeat a few phrases about irresponsible lending, the shadow economy and failed debts but what do we really understand about the way our economy works?

The world has become impossibly complicated. Everyone from banks to local authorities have their money tied up everywhere. They invest in futures, maybe even pasts, derivatives and sources, options and no-choices. The actions of a broker in New York now affect the fiscal security of a noodle seller in Shanghai. Like a huge deck of cards based on a fairytale notion of an earth whose resources will never run out, the mess we’re in was coming for a long time.

It’s not even like countries have the option to opt out. For hundreds of years it’s been the policy of the world powers to make everyone play the game of exchanging goods and credit or else the armies go rolling in. Japan was forced out of isolationism by the American navy, China was forced to buy British opium and Africa was considered ripe for colonisation as it was populated by the kind of work-shy barbarians who couldn’t organise themselves for trade.

There’s barely a country in the world (Go Mali!) that can produce all of its own food and goods, much less in the cold, rich countries where we can’t imagine even a diet without soya sauce, oranges and good wine. We’ve become specialised to the point that if, as in Douglas Adam’s imagination, we were to send professionals to another planet for colonisation, we might arrive with a crew of management consultants and hair stylists.

Road Junky went down the other day for 12 hours due to some database problem. I don’t have the foggiest idea of what that means but nor do I understand why dollars are worth 25% more than they were 6 months ago.

Our advertising checks are paid in $US so I’m not complaining. But there is an increasing sense of not understanding the forces that make the world go round, an isolation from reality, an urge to make the world stop so we can get off.

Many futuristic films like to imagine the day that computers will turn against us. The fruits of our own creation out of our control and threatening our survival. Looking at the economy, I have to ask So what else is new?