London (April 1, 2009 -EarlystageVC Press): In an unprecedented show of unity bordering on global delusion, leaders at the G20 Summit today agreed to implement a technique first invented by software technologists to restore order to the world’s economy. The leaders agreed to implement a Global Undo to reset the world economy to a prior and more satisfactory profile.
The decision to Undo was not without rancor. As in the software version, one of the limiting factors in the restoration of the world economy is a shortage of available cache. Cache is critical to preserving prior conditions and providing all participants with a sense of responsiveness and predictability in the system. The U.S., with its long history of technological advantage, was seen by many developing countries as using its ability to manufacture cache to dominate the world economy. “One of the problems with the easy cache policy of the United States is that excess cache creates bottlenecks in the smooth functioning of the world economy elsewhere,” said German Chancellor Angela Merkel. “Our memory is particularly over-optimized around this tradeoff. We do not want to a return to the destructive race conditions and power dissipation that followed our prior experiences with excess cache.”
An additional source of tension was the choice of restore point in the world economy. Many EU leaders advocated restoration to December 31 1998, the time when their economies unified on the euro as currency. China, seeking to vanquish the dollar as the world’s reserve currency, advocated early 1933 as the restore point, just prior to when the U.S. abandoned the gold standard.
Ultimately, the G20 leaders agreed to restore to 1979 as the new 2009. The selection of 1979 was a concession to fears of hyperinflation, trading off certain 10-15% inflation against the possibility of something much worse. Others saw 1979 and the precipice before the buildup of the U.S. housing boom and the beginning of the escalation of the U.S. deficits under Reagan and subsequent administrations.
Privately, officials from China, India, and Pacific Rim nations conceded that the rise in U.S. debt-fueled consumption was a major driver of the development of their own economies over the past 20 years. This is in stark contrast to pubic pronouncements that their economies are merely victims of U.S. policies. Now seeing the impact of destructive deceleration after a period of beneficial acceleration, the miracle of the G20 agreement on Global Undo is that world leaders will go forward from this restore point with greater restraint and awareness.
It is anticipated that the world leaders will behave as if they are all actors in a single world market, and not islands of financial self-interest. Again, borrowing from the technology sector, the Network is the Economy.
If only…
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