There is a new panic over food in the developing world. Countries are scrambling to increase imports and restrict exports. The political dimension is that rises in prices of staples are often directly linked to social unrest.

Countries affected in some way now make a lengthy list – the Ukraine, the Arab Gulf, India, Indonesia, Philippines, Argentina: this list could go on. India has tightened restrictions on rice exports. The military are already involved in maintaining domestic food distribution to the poorest in countries like Bangla Desh.

Before the West looks on complacently, a country like the UK tends to have only 40 days of many staples in stock at any one time. Rising prices or empty shelves could emerge even in developed countries over the summer if things started to go wrong.

What Happens When You Pretend That Taxes Aren't Happening

There is an interesting angle to this in terms of global security – as prices rise, governments have to start cutting sales-related taxes which have increasingly been used as substitutes for direct taxation.

Government action is often tolerable in the West because it is linked to low taxes. The executive has been freed to do relatively stupid things because the voters are seeing less and less economic interference in their own lives. 

Electorates have been sitting at home fat and comfortable while the politicians go and play with their toys in the global garden.

Now, this settlement is under threat. The economy is creating deep anxiety. Stealth taxes seem very unfair when they affect key inputs for the little man - environmentalism might get him thinking about plastic bags but not cheap flights and it certainly will not be allowed to get in the way of telling him how to run his little white van.

The key to developing world politics is food but the key to Western politics remains, in the long run, the oil price. Real prices are dictated as much by government taxation as by OPEC decision-making in much of Europe.

Electorates have a pain threshold (as the British Government recognised in its recent budget by deferring 'stealth' tax increases) on stealth taxation but will not allow governments to increase direct taxation when that threshold has been reached - and that threshold is reached sooner in times of economic difficulty.

Western Governments can appear flush with cash when they don't need it (encouraging them to 'bread and circuses' policies and that performance art called foreign policy) but, when they really do need it to maintain social stability, it starts to trickle through their fingers. One major criticism of New Labour is, for example, that it has failed to store up funds sufficiently for the bad times.

Polar Reversals

Politics, inflation, security and taxation are all intimately connected. The base for taxation is as undercut by inflation as it is by recession. What makes things harder for everyone is that, despite denials, there is a link between dumb-ass decisions in foreign (intervention) and economic (laissez-faire) policy and the depth and extent of the current crisis. 

The probable next phase (eventually) is one of those polar reversals that you get periodically in politics in which foreign (increasingly withdrawalist) and economic (increasingly interventionist) policies are changed around because the facts change.

We are already seeing the signs of this in the British Government's security policy. This is minimising direct military threat in favour of multilateral defence against more complex social problems. The Anglo-American interest in new levels of financial market regulation, if late in the day, shows a new interest in active intervention instead of regulatory tinkering.

There just won't be the cash for previous levels of intervention overseas. Public services expenditure at home will be threatened just as major parts of the global population (the poor and public sector middle classes in the emerging world and the ‘victims’ of correction such as the unskilled and the services sector middle classes in the West) require most assistance.

This brings us back to the ‘guns or butter’ debate, especially salient in the UK which admits that it has no direct military threat to its security and whose terror risk scarcely suggests the scale of expenditures that have been proposed.

Protecting national economic infrastructure is the probable limit of what should be done by any Western country at this time. The NATO Summit in Bucharest is being held just as the West is running out of enemies to justify large-scale expenditures.

Was Bin Laden Clever or Lucky?

Insurgencies are largely social and economic problems exploited by loose and inchoate cadres who are quite consciously (at the senior ideological level) seeking to drain the West’s resources.

The boogy-boo of Russia is increasingly over-egged to keep expenditures high for the military-industrial welfare system, jobs and profits that benefit a rather restricted number of good old boys including those selected trades unions that keep the establishment centre-left parties in office.

We all seem to have forgotten that Osama Bin Laden cited 9/11 as a deliberate stage in the economic draining of the West, rather like the War in Afghanistan drained the resources and will power of the old Soviet Union.

Whether the man was guessing rather than planning effects, it seems that seven years on, lack of confidence in government, over-expenditure by governments on 'security' and galloping inflation caused by an oil price which owes its rise in part to disruption in the Middle East, have at least contributed to the current economic crisis and all these can be argued as deriving from 9/11.

Perhaps the late capitalist system based on Wall Street and its outliers always was (like the Soviet Union) a vulnerable system, playing on borrowed time, itself distorted by the Cold War in terms of expenditures on non-productive but innovative security products and the determination to 'soft power' its opponents to death through consumerism.

If so, then 9/11 may just have triggered a problem in a system that was always a little bit dodgy. However, the Caliphate faction should not celebrate too soon.

On the basis that “what does not kill, strengthens”, the old Soviet Union may have collapsed but it has been re-born smaller and stronger as a Russian nationalist federation, still a nuclear power but now realistic about what it can do in the world and consciously using its energy resources within a less ideological frame of references.

Clearing Away the Dead Wood

Maybe that is where the West is heading – a short but painful ‘time of troubles’ but with the end game merely a strengthened West, restricting its influence to particular spheres and using its innovation and technological skills less ideologically for realistic profit.

If so, then, just as the collapse of Communism cleared away a lot of dialectal materialist dead wood so a collapse of international liberalism might clear away some similar dead wood in the West.

One suspects, though, that the Old Guard (just like Hilary Clinton in her desperate and self-defeating determination to fight to the bitter end against Obama) will hang on as grimly as the old Communists who tried to mount the coup against Gorbachev.

Because the battle in the West is fought through constitutional and legal methods rather than by the movement of tanks in the streets, the death throes of the old world may be protracted and more damaging to the public interest than it should be.

Bush-Clinton-Bush-Clinton – that is really rather sad in a great democracy born in hope for change. Yet history is always on the side of any New Guard that arises.

It is not, to paraphrase Shelley, that the old are few and the young are many because that is not so, but that the young are young and the old are old. No matter how long sclerotics (like Mugabe) hang on, eventually they lose power because they die. New elites slip through the cracks they leave behind.

The longer the old lot hang on, the more likely the next generation will be radically different. Only the Chinese seem to be perfecting the art of circulating elites. Even New Labour has fixed the matter for only two generations on the British centre-left - the one below these two is more radical and critical.

The 'Times They Are A-Changing'

We are not gloomy. The 'times they are a-changing'. It may be that the Old Guard does hang on to power during this 'correction' - indeed, given their hold over the levers of power, we consider it likely.

But there are fundamentals about the shift of power from the Atlantic to the East and the demand by the East (which is partly the old South) for a bigger share of the good things in life that will result in a hard dose of reality for those Western leaders who still think they have the resources and political capability to rule the world.

Facts, dear boy, facts will dictate otherwise and this can only be good for the domestic populations of the countries concerned.

www.tppr.co.uk