Webdiarist Peter Hindrup drew my attention to this article a few days ago. Thanks, Peter, I found it very interesting and hope that other 'diarists do too. Niall Ferguson is a professor at Harvard University and Harvard Business School and a senior fellow of the Hoover Institution, Stanford. This article first appeared in the Financial Times on 1 January 2008 [1]. In brief, Ferguson draws an analogy between the transfer of financial power from the Middle and Far Eastern empires - the Ottoman, Persian, and Chinese - to Western countries during the 1870s and the present shift of financial power from the West to the Middle East and China.

UPDATE: I have had to remove all but the opening and closing paragraphs of the article, as its continued appearance in full on Webdiary requires the payment of a fee which we cannot afford.

Future historians will look back on the current decade as a turning point comparable with that of the Seventies. No, not the 1970s. This is not going to be another piece pointing out the coincidence of an unpopular Republican president, soaring oil prices, a sagging dollar and an unwinnable faraway war. I am talking about the 1870s.

At first sight, the resemblances across 130 years may not seem obvious. The 1870s were a time when conservative leaders such as Benjamin Disraeli, British prime minister, were powerful and popular. It was a time of falling commodity prices, after the financial crash of 1873 and the opening up of the American plains to agriculture. And it was an era of currency stability, as one country after another followed the British lead by pegging to gold.

...

It remains to be seen how quickly today’s financial shift will be followed by a comparable geopolitical shift in favour of the new export and energy empires of the east. Suffice to say that the historical analogy does not bode well for America’s quasi-imperial network of bases and allies across the Middle East and Asia. Debtor empires sooner or later have to do more than just sell shares to satisfy their creditors.