Did events in China set of this week’s sell off in global stock markets? I’m not competent to judge, but I am reminded of a comment by the great French historian Fernand Braudel, which perhaps clarifies what is at stake in the debate.
Braudel’s remarks concern the 1773 financial crisis, which contemporaries believed started in Amsterdam.
I believe that, on the contrary, Amsterdam was no longer the centre or epicentre of Europe. This had already shifted to London. Can one suggest that a highly-convenient rule might operate in this context, to wit, that any city which is becoming or has become the centre of a world-economy, is the first place in which the seismic movements of the system show themselves, and subsequently the first to be truly cured of them? If so, it would shed a new light on Black Thursday in Wall Street in 1929, which I am inclined to see as marking the beginning of New York’s leadership of the world. (The Perspective of the World, p272)
Braudel’s highly convenient rule, formulated in the late 1970s, might also shed some interesting light on the Asian Crisis of 1997, which becomes, on those terms, the best evidence that the centre of the world economy is returning to Asia.