The nationalisation of Northern Rock and the possibility of an African-American becoming US president defy truths that we had held to be self-evident, writes Tony Kinsella.
BRITAIN'S NEW Labour government has just nationalised a bank. An African-American has a real possibility of becoming US president. Cuba's Fidel Castro has retired. Industrial employment is booming in high-wage Germany. India's Tata group is to build part of Boeing's delay-bedevilled 787 Dreamliner and oil has moved beyond $100 a barrel.
And that's just this month.
Each of these news items is almost comprehensible in itself. Collectively, they leave you intellectually floundering because they all defy self-evident truths.
Markets, we are told, achieve equilibrium through the workings of Adam Smith's oft-quoted "invisible hand". Regulation at best destabilises and eventually suffocates markets. To paraphrase George Orwell: Markets good, regulation bad!
Northern Rock's failure flows primarily from the collapse of the largely unregulated and effectively incomprehensible global derivatives market.
One of the world's wealthiest businessmen, Warren Buffet, warned in 2003 that "derivatives also create a daisy-chain risk that . . . can . . . throw the company into a liquidity crisis . . . It all becomes a spiral that can lead to a corporate meltdown . . . derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal". Westminster might still have to determine the intricacies of taking the Northern Rock into "temporary public ownership", but whatever the fine print eventually says, it is clear that what passed for orthodoxy has gone out the window.
The US, we were told, had become utterly conservative. Bill Clinton's political genius was, having understood this, to "triangulate". A triangle formed by placing his policies at the apex, midway between conservative and progressive stances.
Triangulation worked well for Clinton and later for Tony Blair. Its weakness was that it paid little heed to the issue under consideration. How can you triangulate between attacking or not attacking Iraq? Do you only bomb it every second day?
Barack Obama looks set to become the Democratic candidate. An African-American who advocates a progressive agenda is beginning to win majorities of white male voters from Alaska to Alabama. Senator Obama says bluntly what most have long recognised, the war on Iraq should never have happened. He could well become the 44th president with nary a hint of triangulation.
What kind of world might we face if the US proves not to be conservative?
Fidel Castro has announced his retirement and everybody knows Cuba is going to change. Everybody, that is, except US president Bush, who rushed in front of the cameras in East Africa to say that nothing had changed.
Joe Garcia, the former executive director of the Cuban American National Foundation, differed. He recognised that Castro's retirement "marks a turning point" and went on to call on President Bush to ease US restrictions and "act immediately with an effective foreign policy".
Cuba was supposed to be locked into a time warp, while the US blazed the trails of the future. Instead, we find Cuban-Americans embracing 2008 as their president flees towards 1958.
Manufacturing, we have been told, was passé. The actual messy grind of making products that people wanted to buy had, at best, a bit part to play in our economic future. Metal-bashing would most likely become a simple, low-technology activity best suited to "little foreign people" in far away places.
Developed countries with decent wages, welfare and health systems simply could not compete. Industrial jobs were things of the past and we would have to earn our crusts selling each other sophisticated derivatives, preferably online.
Michael Walter (43) runs Gutehoffnungshütte Radsatz, the world's leading manufacturer of low-floor trams, in Oberhausen near Düsseldorf. The company works three shifts to try to meet demand. Its sales have increased by 60 per cent over the past three years, and its workforce by 25 per cent. Walter pays over the odds to attract and keep his skilled workforce, who also become shareholders.
Manufacturing in the world's second economy, Germany, is expected to grow by 4 per cent this year, or twice the rate of the overall economy. Almost two-thirds of the 300,000 new jobs Germany will create this year will involve people making things.
Services are fine, but they are just not enough on their own, or as Bernd Pfaffenbach, a senior official at the German economics ministry puts it: "We cannot survive by cutting each other's hair."
Boeing's 787 Dreamliner is set to become the world's fastest-selling aircraft. One of its main innovative features is replacing metal with high-tech carbon composites. Boeing has outsourced much of the manufacturing, concentrating instead on assembling and marketing the aircraft.
Like all complex engineering projects, the Dreamliner is proving more difficult in the workshop than it looked on the computer screen and its first test flight has been repeatedly postponed. Boeing's search for high-tech manufacturers has led it to the Tata Motors Campus in Pune, a city of five million near Mumbai, where the 787s' titanium/composite beams will be made. Metal-bashing indeed.
We live in an increasingly globalised world, obliged to share the one planet we have. Rising oil prices are the most obvious daily expression of that reality.
Our differing beliefs and dogmas, once held to be universal, are revealed to be regional. The Judaeo-Christian-Muslim god jostles for space with the Buddha, the Hindi pantheon, and for many, no deity. Communism and laissez-faire capitalism now only compete for space on the history shelves.
Our structures of global governance are in their infancy, and beyond the UN Charter and the Universal Declaration of Human Rights, we have little to base our timorous new world on. We live, as the Chinese curse would have it, in interesting times.
Tony Kinsella lives in France. He will be commenting on international affairs every Monday in our expanded Opinion and Analysis section.