Until last week, Europe had witnessed the type of anti-American gloating usually seen only during the soccer World Cup, the quadrennial event in which the American team is routed in the early rounds. The spectacle of highly paid American bankers falling on their faces inspired smug lectures from afar about the reckless pursuit of profits, disdain for regulation, and manic risk-taking that characterize U.S.-style capitalism.
The tsk-tsk-ing reached a new level with a cover story in the German newsweekly Der Spiegel, "The End of Arrogance": "The banking crisis is upending American dominance of the financial markets and world politics." The piece notes the delicious irony of the United States having to nationalize parts of its financial system. "The Americans are now paying the price for their pride," it notes. "Gone are the days when the U.S. could go into debt with abandon." Gone, too, are the days of "turbo-capitalism" imposing its mores of "avarice and greed" on the global economy. No wonder schadenfreude—that lovely word meaning joy at other people's suffering—was coined in German.
But now the clog is on the other foot. Germany has been forced to bail out the nation's second-largest property lender. Iceland, whose financial system now swims with the fishes, has seized several banks. Britain unveiled an expensive plan to inject up to $88 billion of capital into proud financial institutions such as Barclays. Several European countries have hastened to boost deposit insurance.
Monday, October 13, 2008
Posted by Devin Stewart
A few weeks ago, I was listening to the BBC and heard some British commentators speak about how deliciously ironic it was that the United States, an evangelist of free market principles, is now verging on socializing its financial system. The tone of the comments was smug and gleeful. It was gloating; it was what the Germans call schadenfreude or taking pleasure in the suffering of others. Of course, a few weeks later, many Europeans realized they were in the same boat.
I didn't get this desire to take pleasure in the suffering of others. Also, don't Europeans, who often claim to be immersed in history, realize the historical context? Don't they recall the New Deal, not to mention the Marshall Plan? In a paper I have been working on recently, I tried to express my feeling:
The global nature of the world’s problems makes it increasingly obvious that the human family is in the same boat. Despite the initial glee some commentators took in the recent misfortunes of the U.S. financial sector, the false dream of "decoupling," and the reasonable desire for punitive measures against the "party" on Wall Street, it became clear that international cooperation was the only path toward weathering the "perfect economic storm."
Thomas Friedman recently noted that Iceland’s plea to Russia to help it avoid "national bankruptcy" shows that financial globalization has gone faster than regulatory institutions could govern it. Globalization of the world’s problems has also gone faster than the common understanding of "national interest."
In a time when everything has gone global—from epidemics to pollution to communications—nationalistic political slogans like John McCain’s "country first," like the 1867 "Canada First," seem anachronistic. Of course, we expect our politicians to fight for a country’s national interest, but the nature of each country’s interest is increasingly global. How can a more enlightened sense of national interest take root?
Today, Slate has an article on the same topic. It starts like this:
(Photo by BinaryApe.)