City & Business: No end to the trauma in sight

When a construction site outside Hartlepool is abandoned because Samsung, the Korean chaebol planning to build a microchip factory there, has run short of cash, that is easy to understand. Korea's pain is hitting home. Jobs are in peril.

When an economic era comes to an end there is, in contrast, nothing to grab hold of that verifies the fact. And yet that - as much as the scaling back of Korean investment in the UK - is what the crisis in Seoul and the bankruptcy of Yamaichi in Tokyo signals.

Since July all manner of officials have repeatedly reassured us that the crises first in Thailand, then the Philippines, then Indonesia, then Malaysia, then Hong Kong were, if not "little local difficulties", then manageable difficulties with negligible significance for the West.

Now it is clear the officials were wrong. The financial events still unfolding in Asia will remake the world just as surely as the rise of OPEC and oil prices did in 1974.

What we are witnessing is not a "market event" like the crash of October 1987, but the playing out of sweeping historical forces - the rise of the Asian economies, the concentration of power in financial markets.

So far, except for the occasional headline, the story has been confined to the business pages. It may even stay here. The odds must be against a climactic financial meltdown that brings the world to its knees.

Still, a meltdown - or the prospect of meltdown - is not the real story. The real story is that the era which began in 1979 with the rise to power of Margaret Thatcher and Ronald Reagan is finally at an end. We have enjoyed the benefits of globalisation. Now we get the bill.

In what manner this bill will be presented is difficult to foretell. But perhaps it makes sense to think of it this way. Between 1945 and 1991 thriller writers built their tales around the Cold War. Since then they have worked with terrorists, drugs, and conspiracies. Now they have new plot points.

Japan, which prospered after the Second World War on the back of central planning and corporate loyalty, was corrupted by political and commercial opportunists in the 1980s.

Korea, which built itself into the world's eleventh largest economy on the back of astute central planning and suppression of workers' rights, is at its lowest ebb since its occupation by Japan in the 1930s.

America, which has preached the values of globalisation because - in good part - they advanced America's commercial interests, is increasingly isolated even as it shoulders the burdens of managing the global economy.

How do these plot points add up? Well, think what John LeCarre would make of them. An all powerful Uncle Sam. Western Europe strained by a still-born push for a single currency. Russia fighting civil chaos as its catches the Asian flu. Japan politically adrift. South Korea bust. Starving North Korea in possession of nuclear weapons. A handful of financial diplomats struggling to hold back the tide of history. Inscrutable political forces at work in the East which the West touchingly wants to clarify in the name of market "transparency".

Overstated?

Of course. Fortunately, it's only an outline for a millennial thriller.