Lessons of '79
Richard West
In February of this year I wrote an article for the Spectator based on Paul Erdman's frightening and prophetic thriller The Crash of79, written as long ago as 1976. The book begins with a plot by the Shah of Persia to destroy the other great oil producer Saudi Arabia with atomic weapons provided by Switzerland. (Paul Erdman must have a grudge against Switzerland which appears as the villain of all his novels on high finance.) The protagonist of the book is a young American merchant banker and whiz kid hired by the Saudis as a consultant. He advises them to call in loans to countries like Britain, raise the interest rates and finance a new loan to save Italy from financial collapse. For this purpose, two Italian politicians are handsomely bribed in return for pawning their country's state oil company.
The Americans in the Erdman book arm the Saudi Arabian government in return for the oil guarantees and cash they need to support American banks, now very overextended with bad loans to third world countries as well as to US cities such as New York. The scheme collapses when Saudi Arabia has a left-wing coup. The Shah launches his nuclear strike which wipes out all the Arabian states but is himself killed by one of his own bombs. The resulting oil crisis, with Persia and Saudi Arabia both gone, leads to a run on the US banks and the Crash of '79.
Paul Erdman has got it nearly right. There was an attempted Saudi Arabian coup when 450 people, armed with AK-47 assault rifles, took over the main mosque at Mecca anticipating the coming there of the King. And the Shah of Persia has been removed from the scene although not in such bloody fashion. And if Erdman could not imagine the monstrous Ayatollah Khomeini, at least he saw that America's foreign policy seems to have come to grief in the Middle East; and the dollar is now so weak that impoverished hacks like myself are now looking to the United States as somewhere to spend our meagre earnings. Of course Henry Fairlie may be right that recent events in Iran have done the United States a power of good in terms of prestige and confidence; but this must be hard to explain to the US public who now cannot afford foreign holidays.
This year's oil crisis has at least shown which states of the world are economically sound. Great Britain is not, in spite of its own huge oil deposits. The United States and Canada are not sound in spite of theirs. The countries that now seem able to buy all the oil they want and for years to come are Chile, Argentina, Uruguay, South Africa and Zimbabwe. Students of the Spectator will note the paradox that these are the five right-wing countries on which Great Britain, America and other liberal powers are hoping to force economic sanctions. The impossibility of this exercise should be clearly noted: a country like Great Britain, importing more than half of its food largely from countries like Argentina, is likely to find itself on the wrong end of sanctions. We need to borrow from them, not they from us.
One of the themes of Paul Erdman's book is the damage done to itself by the US in advancing loans to poor and spendthrift 'third world countries' like Zaire, Italy, Britain and Burma for moral or geopolitital reasons. This habit of baling out idle countries has not earned America any gratitude. The State Department and the CIA are just as loathed by left-wing countries like the Ayatollah's Iran and rightwing countries like Uruguay and Zim babwe. The CIA are accused of trying to 'destabilise' Pinochet's Chile just as they once tried to destabilise Allende's Chile. In South Africa, I have heard the CIA accused of murdering Dr Verwoerd, In some respects, 1979 was not a bad year in world politics. It saw the removal from office of Pol Pot (Cambodia), Idi Amin (Uganda), Macias Nguema (Equatorial Guinea), Jean-Bedel Bokassa (Central African Empire), Jimmy Kruger (South Africa) and David Owen (Great Britain). China was taught the unwisdom of making war on its neighbour, Vietnam; and on the home front, the Chinese Communist Party came up with an excellent re-writing of Marx: 'From each according to his ability, to each according to his work'. (British trade unions, please copy.) India has enjoyed a further (though maybe a last) year free of the termagant Mrs Gandhi; in New Delhi, 750 children were taken to hospital with upset tummies after a banquet given to mark the International Year of the Child. Portugal, Cyprus, Lebanon and one or two other small, boring problem countries, have mercifully dropped out of the news, Great Britain has abandoned two of its main delusions on foreign affairs: that the Common Market will do us some good; that terrorists in Zimbabwe want to establish a free and just government. But both these discoveries appear to have come too late.
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