If we look, we’ll find cause for optimism

A QUESTION for students of history: are things looking a lot like the 1930s or the 1440s?

Lorenzo Smaghi, writing in the Financial Times, sketched out the alternatives.

The 1930s are familiar. Countries threw away their trade agreements, built walls, promoted local manufactures, banned imports and immigrants, imposed tariffs and fines, and shouted nasty remarks at each other.

The result was a race to the bottom as prices rose along with tempers and an eventual world war that resulted in repeated genocide as Hitler killed 6 million, Stalin about 20 million, and Mao a further 70 million people.

Over the 30 years between 1930 and 1960, well over 100 million people were brutally murdered as a direct result of politics. It wasn’t until the 1990s that this horror began to turn for most, even though citizens of the West experienced marked improvement from the 1950s.

The second scenario happened almost 600 years ago when China was the most advanced and powerful nation in the world. For some reason, they closed their doors and shut out the rest of the world, declaring no-one had anything worth offering and trade in goods and ideas was not in China’s interests.

The response from the states of Europe at the time was a flowering of ideas and ambition that saw Europeans explore the world, colonise everything that wasn’t nailed down, and – within 200 years – go shooting past China.

This last week has offered some signs as to which may be more likely.

After Donald Trump ripped up the Trans Pacific Partnership trade agreement (one of the most sophisticated ever developed) and abandoned the 12 countries who risked a great deal to sign it, China’s President Xi Jinping said “China will not shut the door to the outside world but will open it even wider”.

They’ve offered to trade on favourable terms with anyone and everyone. Sadly, China cannot replace the hole left by a retreating US, making up only 12 percent of global imports and much of that is still commodities, rather than advanced manufactures.

That promises pain for countries like South Africa which provide the raw materials for the manufacture of those sophisticated consumer goods.

That doesn’t mean we won’t experience tremendous and global economic hardship, but we may – at least – avoid a world war. That may not seem like much cause for optimism, but it sets a bottom from where we may look up at the stars.