THIS TIME IT’S DIFFERENT….


OH REALLY? The phrase ‘this time it’s different’ is one that is widely disparaged in financial markets, and with good reason. All too often ‘this time it’s different’ is associated with the mindless ‘smile and dial’ positivism that has been the bane of financial markets even in their infancy, and all too often the accompanying ‘irrational exuberance’ turns to ‘deep visceral fear’, as former Fed chairman Alan Greenspan once articulated.


 phenomenon is set to last forever. It is rather that the world is going through fundamental change, economically and politically, and there really  populism modus operandi, the nostalgia for which is a case of viewing the past through heavily rose tinted glasses. While Mr Trump would doubtless   change that has been under way for some time to an end game, at the centre of which is what we now have to call a US China ‘trade war’. No one ‘wins’ a trade war, in general they end because the destructive forces that they unleash become intolerable. One side may consider that it has gained the upper hand, but the victory is so Pyrrhic that it is in truth tantamount to defeat.


The latest developments in US/China trade relations  the world in political and economic terms. It is a ‘Thucydides trap’ and the odds do favour China as the winner in the longer run, and not only due to historical precedent of the old empire generally failing, but above all as the locus of the world’s economic activity shifts away from Europe and North America above all  question is how this trade war will play out, above all in terms of the fall-out from it for the global economy,  the world has arrived at this point.


China’s rise to become one of the two major economic powers is generally attributed to Deng XiaoPing’s reforms, which indubitably contributed to its rapid expansion over the past 30 years. But the broader global historical context needs to be   each other, with both deploying Armageddon as the ultimate point of defence, and sustaining both a high  deal of technological developments under the aegis of national security institutions. In tandem these served to constrain government expenditure on other  innovation. As is well documented the ‘peace dividend’ as a result of the end of the Cold War was enormous, and even if there was a lot of wastage, it certainly helped to fuel the rapid evolution of the ‘tech’ sector, and above all globalization of manufacturing production. But the counterfactual question which  would have delivered the same outcome for China’s economy, if the Cold War had lasted another ten or 


8 | ADMISI - The Ghost In The Machine | May/June 2019


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