The enthusiasm had received a temporary setback when the Asian crisis of 1997 spread to about 40 percent of the world. The Financial Times had headlines about an "economic meltdown" and "a house of cards", while the BBC ran a special Newsnight programme, "Is Capitalism Collapsing?" But the panic did not last for long. Within months the new paradigm was rising high again: both Patrick Minford, former economic adviser to Margaret Thatcher, and Meghnad Desai, former economic adviser to Gordon Brown, insisted in debates late in 1998 that all that had occurred was a passing storm of no significance, and all problems had been solved by quick intervention by the US Federal Reserve. 4 There was brief panic again in the summer of 2001 as the US went into recession. "The world economy is starting to look remarkably, even dangerously, vulnerable" , stated the Economist. "Industrialists and bankers at their annual get together on banks of Lake Como did little to disguise their over-riding pessimism" ,5 reported the Financial Times. But again amnesia soon set in and financial commentators were describing the economic panic of a few months earlier as "the recession that was over before it began"6-despite, or perhaps because of, the loss of one in six manufacturing jobs in the US. Renewed economic growth in the US led to even greater optimism than before. The International Monetary Fund could declare year after year that the picture for the future was of fast economic growth. So in April 2007 a typical IMF press release about its most recent world survey read, "Global economy on track for continued strong growth" . There were a few mainstream doubters, but their worries were only ever discussed in order to be dismissed.
The overall message was that capitalism was going from strength to strength with supposedly record world growth figures. Even those sceptical about the claims for the advanced countries often accepted a modified version of the optimism when it came to the system as a whole. Hardly a day went past without media references to the "new giants", China and India, and soon compliments were being poured on the other countries included with them in the new "BRICS" rubric-Brazil, Russia and South Africa. Even if the old industrial states were to run into problems, these new centres of capitalist growth would maintain the stability of the world system. The faults that were recognised in the global system were regarded rather as Stalin's admirers used to speak of his "occasional errors", as " spots on the sun".
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The New Age of Global Instability