Cataclysm or cleansing fire?

Let me just spell out some possible consequences of the relative decline of the West (expanding upon comments in the last paragraphs of my previous post).

At the heart of the problem are the chronic budget deficits being run by Western countries and the associated accumulation of government debt. Clearly, one consequence is that government spending is going to be constrained and the individuals and organizations who/which depend on the public purse will in many cases find that such support will be reduced or withdrawn.

Some good may come of this, in that an unhealthy situation has arisen in many Western countries whereby individuals and groups have utilized political influence in order to benefit financially without giving anything back to society. (It was always thus. I know, I know.) Pressure groups of various kinds have created mini-empires within governmental, educational and arts bureaucracies and institutions. Within universities, humanities schools and arts faculties in particular have become shamefully politicized and compromised by (anti-)intellectual fashions. Political correctness has been imposed very effectively in Western universities and other institutes of learning.

Good may come from the threats to prosperity if governments respond with judicious spending cuts and policies designed to encourage business activity and productivity.

In the sphere of education, it's clear that science, technology, business and language courses need to be sustained to enhance national prosperity. And perhaps the arts and humanities will once again find a modest niche as a civilizing influence, encouraging knowledge of and respect for texts, buildings and art works of earlier ages. I hope so.

But there are already indications that some governments are reacting to the crisis by enacting left-wing policies and further entrenching the powers and privileges of unions and other groups hostile to business and trade.* If history is any guide, such policies will be a disaster for the mass of the population, dramatically hastening economic decline.

* The Obama administration is a case in point. In Australia, an apparently out-of-control Labor Party government, led by Prime Minister Kevin Rudd, has compounded its other socialistic sins by declaring war on mining companies in the vain hope of regaining popular support. (See last month's posts Populism and fiscal policy and Passing in the night).