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Thu 23 Oct 2008 04:00 AM

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The days after history ended…

An old man with seven years to live in 1930, when the effects of the Wall Street Crash and the ensuing Depression were becoming an awful reality, John D. Rockefeller said: "These are days when many are discouraged. In the 93 years of my life, depressions have come and gone. Prosperity has always returned and will again."

An old man with seven years to live in 1930, when the effects of the Wall Street Crash and the ensuing Depression were becoming an awful reality, John D. Rockefeller said: "These are days when many are discouraged. In the 93 years of my life, depressions have come and gone. Prosperity has always returned and will again."

Of course, Rockefeller was not the type of person to see a glass as being half empty. This was a man who had pulled himself up by his boot straps to become certainly the richest man on the planet at the time, and, in relative terms, probably the richest man of all time.

Still, his perspective on the cyclical nature of feast and famine is worth holding on to, particularly now, as the world tries, more desperately with each passing day, to fight off the effects of bad credit and decades of what now looks like buccaneer economic practice.

It is sometimes hard today to believe that money is a manmade construct. Over the last few months it seems to have taken on an angry life of its own, threatening mankind to the extent that the leader of the Free World has to take to the lawns of the White House, almost daily, to intone that nation shall now join peaceably unto nation to fight back against it.

But if we accept, as we must, that prosperity will one day return, the question is, then, when?

How serious is this downturn? For those of us who have long championed free markets and minimal state intervention in private sector enterprise, the last few weeks have been depressing.

Again and again, all over the world, the state has had to step in (with increasingly large strides) to bail out banks and other private institutions. Certainly, the governments of the GCC states, who are trying to create business environments wherein the private sector can lead the way for economic diversification and progress, will be looking on closely.

Conversely, one suspects, the world's economic leaders will soon be arriving in these parts with the regularity that chairman of Premiership footballs clubs currently do, looking for handouts and buyouts.

It was only at the start of this decade that OPEC - the cartel of oil producing nations - was issuing pronouncements to the effect that the price of a barrel of oil would never again go over $25.

The last few weeks may have seen a steep decline in price, from the heady heights of almost $150, but at $90 the price is still high. The GCC states are sitting on huge cash surpluses and could very well play a considerable and important role in the fight back against money.

Invested wisely, these surpluses could also see the Gulf states wielding considerable power when the dust has settled on the post-credit crunch world. The downturn on the world's markets, severe as it has been, represents a sizeable opportunity for those in possession of ready cash, and GCC leaders know it.

The trick, then, is to know when to invest; when prevailed upon to do so, or when the price is at its lowest? It is not just shares on the UAE stock markets that are currently undervalued.

In 1992, philosopher Francis Fukuyama famously published a book called The End of History and the Last Man, in which he argued that the world had reached the point at which consensus on the type of political system required to govern countries had reached critical mass, and that the Earth was consequently a less turbulent place.

"What we may be witnessing is not just the end of the Cold War, or the passing of a political period of post-war history, but the end of history as such; that is, the end point of mankind's ideological evolution," he wrote.

Current events, one suspects, might well represent a not inconsiderable spanner in the works of Fukuyama's hypothesis.

Certainly, the contestants in the race for the prize of presidency of the United States are striving to impress on voters their aptitude for governing in a markedly different way to Presidents of the recent past.

Well they might; come November it looks as if whoever wins will take over the reigns of power for a country - some say the world's last superpower - mired in massive debt, and positioned at the crossroads of political philosophical thought.

If the thinking of yesterday brought about the problems of today, then what will be the right way of doing things tomorrow?

Today, English playwright Alan Bennett's rather more prosaic summation of history, delivered in the play The History Boys, seems more apt than Fukuyama's: "History. It's just one bloody thing after another."

Damian Reilly is the editor of Arabian Insight.

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