As the financial storm reaches hurricane force, sending a surge through the Eurozone and overwhelming the Icelandic banking system altogether, three questions arise.
First, where will it stop? The initial response was to say it was an effect of the collapse of the US mortgage market, reduced to rubble by incentives which led banks to offer loans on ever more tenuous evidence of the ability to repay. Then when HBOS and Bradford and Bingley joined Northern Rock either in state hands or under state tutelage, some said it was a crisis of the free-wheeling, lightly regulated Anglo-Saxon economic model. Now that German, Belgian and Italian banks are also in trouble, that looks like premature schadenfreude. So the question becomes, will the waves splash ineffectually against the great wall of Chinese state control, or will they sweep away even that mighty bulwark?
And that brings us to the second question: how deep will be the damage? As we pointed out a week ago, there is a tight and historically conflictual relationship between bank and industrial capital. In the 1960s and 1970s, Labour governments often batted for industrial interests not so much against the workers in the firms concerned but against the bankers accused of starving them of investment for their own unpatriotic ends. The European model was supposed to broker this capitalist-to-capitalist relationship and the Asian model to bang their heads unceremoniously together. We see what is happening to the first and wonder about the reputation of the second.
With the collapse of the supply of working capital to the industrial sector comes the inevitable consequence of a downward spiral of unemployment and falling demand, in short a slump. How strange it was to watch the American Congressional bail out debates, in which speaker after speaker stood up for Main Street against Wall Street, quite forgetting that between the two was good old Factory Street, that creaking, ageing American industrial alley where nobody sends the television cameras. Now the truth is out: the gigantic tide of credit which created colossal demand out of nothing at all has ebbed away in a moment. Of course that means the conveyor belts stop in Chinese factories as well as in Pittsburgh and Birmingham.
The third question has already received a sort of answer, in Britain at least. The Conservative conference finds time and enthusiasm to fete the memory of Thatcherism - while all around them is the evidence of the absurdity of big bang capitalism. After a decade of talking ever more sensibly about the role of the state in a market economy, the Liberal Democrats suddenly revert to the sovereignty of individual choice and vow to reduce the burden of taxation. And Gordon Brown responds by bringing a collection of free marketeers from the City into his government, and Peter Mandelson into his cabinet. It is as though, faced with a difficult case, a team of surgeons had decided to raid the graveyard.
The future cannot be like the past. It is perhaps lucky that turbo-charged capitalism has all but destroyed itself before it destroyed the planet; but it is only waiting for the chance to try again. So let us ask a final question. How can we avoid that, and do so by democratic means?