PacNet #22 March 24, 2009: It's Not Just the Economy, Stupid

Facing the worst economic crisis since the Great Depression, analysts at the World Bank and the CIA are just beginning to contemplate the ramifications for international stability if there is not a recovery in the next year.  For the most part, the focus has been on fragile states such as some in Eastern Europe. 

However, the Great Depression taught us that a downward global economic spiral can even have jarring impacts on great powers.  It is no mere coincidence that the last great global economic downturn was followed by the most destructive war in human history.  In the 1930s, economic desperation helped fuel autocratic regimes and protectionism in a downward economic-security death spiral that engulfed the world in conflict.  And this spiral was aided by the preoccupation of America and other leading nations with economic troubles at home and insufficient attention to working with other powers to maintain stability abroad.  Today’s challenges are different, yet 1933’s London Economic Conference, which failed to stop the drift toward deeper depression and world war, should be a cautionary tale for leaders heading to next month’s London G-20 meeting.