Thursday, February 3, 2011

Egypt and the Global Financial Crises

Much hubbub about the amazing turbulence in Egypt; especially in the wake of the popular uprising in Tunisia that deposed Ben Ali, I wonder if the “Arab street” in Egypt is finally awakening to the tremors deliberately set off when the United States forcibly deposed Saddam Hussein in 2003.

Remember that the rarely-voiced strategic approach by the Bush Administration and its allies to addressing Islamist terror and its generators was to begin to undermine the autocratic regimes across the region against whose tyranny groups like the Muslim Brotherhood, al-Qaeda, and others were primarily agitating. The invasion of Iraq was not an end, but the necessary intervention to get the whole chain reaction moving. Iraq, located in the center of both the Arab geography and the Sunni-Shi’a split, was always the linchpin—as Saddam and his neighbors knew before Osama bin Laden’s attacks forced the U. S. to change its strategic relationship with the area.

Let’s see if we can’t link the financial turbulence to what’s happening in the Middle East today—see if we can’t find the place of integration of what may not seem linked intuitively.

The primary impetus driving world evolution today is the transcendence of the Orange Industrial Era by the rise of the Green Information Age. (There’s a whole lot to say about how the Information Age itself was created by what the transformations of the Industrial Era gave rise to with the emergence of what we know today as science. The severing of the “objective” and “subjective” worlds, or the granting empirical inquiry the same dignity as religious seeking, inspired an explosion of knowledge about the physical world that emphatically includes the triumphs of Albert Einstein and his quantum physicist colleagues. It was their discoveries that made possible the technology undergirding the Information Age.)

Since we are, relatively speaking (as far as we can hypothesize), at the beginning of this new age, there is a lot about it that we cannot yet say with any certainty. From an Integral Model perspective, we would say that the Kosmic habit being created by true Green is still plastic and variable, so while we can make useful comments about its contours, we must hold these rather lightly.

But among the dynamics we do notice are the following:
  1. The tendency to decentralize power of all sorts—financial, political, intellectual.
  2. The transformation of labor power to what Peter Drucker identified as “knowledge work”: i.e., the capacity of the individual by dint of his own mental capacities to create wealth by direct application of his knowledge and skill in the market place.
  3. The globalization and democratization of human culture.
  4. The rapid rise of middle class living standards in hitherto agrarian nations, especially China and India.
  5. Dramatic increases in human health and longevity.
  6. Enormous stresses upon the sources and nature of industrial-strength energy production.
  7. And finally, the ever-increasing development and application of new technologies which results in what appears to be ever-increasing social and political instability.
Of course, underpinning these external, measureable features is the shift in both individual and collective consciousness, and the clashed caused by the existence—for the first time in human history—of three distinct waves of consciousness among billions of humans spanning the globe.

We can see all of these at play right here in the United States. There have been several distinct mass rebellions against the New Deal/Progressive dynamic of increased centralization of power in Washington. This began as long ago as 1964 with the Goldwater defeat of the “Establishment” wing of the GOP that had acquiesced in the federal power grabs by FDR and the New Deal. The election of Ronald Reagan in 1980, the candidacy of the Ross Perot in 1992, the 1994 takeover of the House of Representatives, and the retaking of it in 2010, by the Republicans, are markers of the decentralizing political impetus of the Information Age.

This is probably even more obvious in mass culture. The instruments of mass media—the major television networks and dominant local/regional newspapers—have lost both market share and influence. The simultaneous rise of Internet-based news sources and opinion has resulted in an explosion of sites for anyone anywhere in the world to publish or obtain data. What is unseen in this phenomenon is the multiplicity of connectivity—by some time this year we expect more humans to have some form of Internet access than those who don’t.

The truth is we simply don’t know what the impact of this three billion-plus connectivity will have on our evolution. All we can say with certainty is that it won’t be like anything we have ever experienced.

The financial turbulence of the global markets since 2008 has had an unexpected impact in the United States—unexpected at least to orthodox economists—of persistently high unemployment. In previous downturns, re-employment tended to pace recovery, but this time this is not happening.

Global Realignment

Perhaps this is because the crisis was less an orthodox business cycle adjustment and more a result of the global realignment caused by the shift to the Information Age, with its very different labor demands. Drucker foresaw a move from the traditional Industrial Era employer-employee model where relatively centralized capital control kept the number of firms within a certain zone to a world where masses of individual were in essence self-employed, trading and profiting from their capabilities in an ever-shifting market of specialized demands. The requirement that one “find a job” from an external source has been slowly eroding; perhaps the financial crisis is accelerating this trend toward mass entrepreneurship.

We can take each of the seven Information Age dynamics listed above and give powerful examples of how they are playing out in American society. But let us return to the Egyptian situation to examine the possible relationship between it and the financial crisis.

One avenue to examine is from the playbook of Osama bin Laden, whose rebellion is explicitly against the impacts of modernization on his society. In general the Muslim and Arab worlds, while significantly impacted by Western modernization since the arrival of the Dutch on the shores of Indonesia in the sixteenth century, are experiencing the accumulated impact of this centuries-long encounter with the West. (I highly recommend Bernard Lewis’ excellent analysis of this history in What Went Wrong?)

Although Western nations penetrated the Muslim world from just about every direction over the past few centuries, it has resisted the opportunity to transform itself from a tribal/agricultural world to an industrial one. Thus it saw its previous prominence in the period leading up to the European Renaissance entirely and completely eclipsed by the Advanced Sector, so much so that when the Ottoman Empire collapsed after World War I, the British and French were able to dominate the Muslim heartland.

The chasm between the two sectors was gaping by any measurement. Standards of living, health and longevity, literacy rates, political tolerance and rights all showed up very differently in the two worlds. Muslim cultures resisted, for the most part, the destabilizing effects of individualism by shoring up autocracy legitimized by a conservative reading of the Quran and Muslim theology. The recent widespread push for implementation of Sharia is an exemplar of this reaction.

Absent an economic base to support a shift of cultural consciousness to what we in the West know as the Orange modern level or wave, the peoples of most Muslim lands found themselves deeply conflicted between their centuries-old customs and traditions on the one hand and the obvious advantages of modern life on the other. The Palestinian-Israeli conflict has acted as a magnifier of this divergence, with Israel’s modern, industrial (and now Information Age) economy acting as a permanent Western outpost on the shores of the Arab world.

The discover of massive quantities of crude oil in the area exacerbated the ironies: the industrial West needed the oil that the Middle East barely used, but by making deals with American and European oil concerns, the Arabs and Persians institutionalized modern penetration of their lands and cultures.

While the Cold War raged, the West and the Muslim world endured an uneasy co-existence, distorted mostly by the Western commitment to Israel. The first serious cracks in the relationship came with the overthrow of the Shah of Iran by Ayatollah Ruhollah Khomeini and his followers, followed closely by the Soviet invasion of Afghanistan.

These two events had seriously repercussions for relationships with the West. Khomeini demonstrated that the West can be defeated, and the Soviet experience in Afghanistan opened the door for the Salafist and Wahhabist variants of Islam to deepen their legitimacy by inspiring the mujahidin guerrilla war against the Soviets, while also demonstrating that the Muslims could successfully resist the West.

The Egypt-based Muslim Brotherhood, founded by Hassan al-Banna, sanctioned jihad against the West and its Arab allies; he led the political opposition to the Egyptian aristocracy with its (to his mind) complicity with British dominance of Egypt. This is a classic example of the Amber rebellion in the ummah against the impact of the Orange modern wave.

In the aftermath of World War II, as European powers were forced to embark upon a path of decolonization, Egypt experienced its share of instability. Even after the emergence of strong man Gamal Abdel Nasser after the 1952 revolution that overthrew the pro-British King Farouk, popular sentiment tended to be restive. The assassination of Nasser’s successor Anwar al-Sadat was the most successful demonstration of this—until now.

A number of authors, among them Paul Berman (Terror and Liberalism) and Lawrence Wright (The Looming Tower), draw direct links from the Muslim Brotherhood to the Egyptian Islamic Jihad to al-Qaeda. The majority of the terrorists who flew airplanes into the World Trade Centers and the Pentagon were Egyptians. The Wahhabist connection derives from bin Laden’s family history in Saudi Arabia, among others.

It is in the tectonic cracks of the new world emerging from the old that tottering foundations—economic, political, intellectual, cultural—will find themselves subject to sudden and unexpected collapse. The global financial crisis, fueled in part by an all-too-human adherence to the financial instruments of the old order along with a similarly human willingness to profit from disaster, is evidence of the epochal shift from the Industrial Era to the Information Age. That shift, spearheaded in the West, perforce impacts the rest of the world, whether we would have it that way or not.

Billions of people, many of them in the Muslim world, live in Amber societies pervaded by an agricultural/extraction-based economy sustaining a tribal/clan-based culture. When these Muslims look to the east, they behold the giant nations of China and India, hell-bent on rapid industrialization, modernizing their economies as rapidly as they can. To their north and west, the Advanced Sector nations are experiencing the pangs of the Information Age emergence. Both transformations are chaotic and unpredictable. Caught in the middle with their mostly unchanged and, some would argue, backward political economies, the Muslim world is buffeted by enormous tidal forces completely out of its control.

(Among the many misfortunes of the Africans is that their continent is geographical tangential to the stresses we are describing. Thus, while most of them are similarly backward compared to the West [and many of them, especially in the north, are Muslim], the impact of the world crisis is not quite as immediate as it is in Muslim Asia. Their time will come, however.)

Thus what we are beholding in Egypt is of a piece with the dislocations of the global financial structure and the American “recession.” Enormous debts, both financial and psychic, have been run up the world over, and there is no longer enough capital to sustain them. As we saw in a similar tectonic shift in Europe in the aftermath of the Thirty Years War which symbolized the transition from the feudal to the industrial worlds, the old order will simply give way without warning or ability for most to anticipate its replacement.

If that history is any guide, we should prepare ourselves for some gruesome as well as transcendent times.

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