WEBVTT - The New World Disorder 0:00:03.760 --> 0:00:06.920 Welcome to Bloomberg Opinion listeners. I'm Valley Quinn. A special 0:00:06.960 --> 0:00:10.200 episode of Bloomberg Opinion this week. Helen Thompson, Professor of 0:00:10.240 --> 0:00:13.720 Political economy at Cambridge University, is the author of Disorder, 0:00:13.880 --> 0:00:16.800 Hard Times in the twenty one Century. The disorder the 0:00:16.800 --> 0:00:21.640 book presents, emanates essentially from oil and fossil fuels. More broadly, 0:00:22.160 --> 0:00:27.520 the geopolitical and transactional complexities of producing, securing, transporting and 0:00:27.720 --> 0:00:32.479 consuming that energy. According to Disorder, underpinned the great structural changes, 0:00:32.640 --> 0:00:36.080 both economic and political, of the last century. There's more, 0:00:36.360 --> 0:00:39.680 much more, but let's get started. So, Helen, are we 0:00:39.800 --> 0:00:44.040 at a pivotal point now in how the global economy operates? Yeah, 0:00:44.080 --> 0:00:46.000 I think that we are. I think we're actually at 0:00:46.040 --> 0:00:49.040 a pivotal point before the war. I think that what 0:00:49.080 --> 0:00:52.320 we could see during the latter part of last year, 0:00:52.360 --> 0:00:55.600 in the months autumn before Omicon hit, was that the 0:00:55.640 --> 0:00:59.720 world economy is facing some pretty serious energy constraints that really, 0:01:00.200 --> 0:01:02.960 at any point when there's any significant growth, the world 0:01:03.000 --> 0:01:05.560 economy is now running into high energy prices. And we're 0:01:05.560 --> 0:01:08.720 not just talking about high oil prices, as has been 0:01:08.760 --> 0:01:11.200 the case with most past energy crisis. At Lea. Since 0:01:11.200 --> 0:01:14.840 the nineteen seventies, we're talking about high natural gas prices 0:01:14.880 --> 0:01:17.600 and high coal prices too, and I think high core 0:01:17.680 --> 0:01:20.160 prices has really taken a lot of people, including myself, 0:01:20.400 --> 0:01:23.800 trying to follow the energy situation quite by surprise, and 0:01:23.840 --> 0:01:25.800 I think that that goes to show the depth of 0:01:25.840 --> 0:01:28.920 the issues that we're now facing, particularly when we bear 0:01:28.959 --> 0:01:31.319 in mind that we would like the world economy to 0:01:31.319 --> 0:01:33.959 be moving away from coal as rapidly as possible given 0:01:34.000 --> 0:01:37.560 the need to address climate change. One of your main 0:01:37.680 --> 0:01:40.680 visas is that the US failed to secure the stability 0:01:40.680 --> 0:01:43.040 of its relationships in the Middle East, and that created 0:01:43.080 --> 0:01:46.199 an instability around energy which reverberates. So in a sense, 0:01:46.600 --> 0:01:48.720 this shouldn't have taken any of us and by surprise 0:01:48.760 --> 0:01:51.360 by that pieces right, no. I think that what we 0:01:51.400 --> 0:01:54.400 can see during the two thousand and tens is is 0:01:54.440 --> 0:01:57.480 that the United States, in terms of its own energy needs, 0:01:57.480 --> 0:01:59.360 is in a much stronger position than it had been 0:01:59.400 --> 0:02:02.760 in the previous decades. Since the nineteen seventies, because the 0:02:02.800 --> 0:02:05.600 shale oil and gas boom allowed the United States to 0:02:05.920 --> 0:02:10.880 achieve a higher level of energy independence, much reduced energy dependence. 0:02:11.639 --> 0:02:14.040 What was revealing, though, was the way in which as 0:02:14.080 --> 0:02:17.600 the United States achieved that it's very success had so 0:02:17.760 --> 0:02:21.520 many disruptive consequences in the Middle East, in particular because 0:02:21.840 --> 0:02:24.760 it was very problematic from the Saudi point of view 0:02:24.880 --> 0:02:28.679 to now find that American shell producers were big rivals 0:02:28.760 --> 0:02:32.079 for shares of world oil market, and as that came 0:02:32.120 --> 0:02:34.799 at a time when the United States and the Obama 0:02:34.880 --> 0:02:38.440 was also trying to improve relations with around and then 0:02:38.480 --> 0:02:40.840 things didn't work out very well in Syria. Despite the 0:02:40.880 --> 0:02:44.120 fact that Saudis and States have started on the same side, 0:02:44.280 --> 0:02:46.240 what we see through the two thousands and the end 0:02:46.280 --> 0:02:49.280 as the shell boom goes on, is a complete deterioration 0:02:49.480 --> 0:02:52.839 of US Saudi relations. And although to some extent they're 0:02:52.840 --> 0:02:56.360 repaired during the Trump presidencies. That Trump tries to hug 0:02:56.400 --> 0:02:59.640 the Saudi Is hard, he still isn't really able to 0:02:59.680 --> 0:03:02.519 in the Saudis when it comes to the price of oil. 0:03:02.680 --> 0:03:05.760 And as the US show boom foltered during the pandemic, 0:03:05.800 --> 0:03:09.560 particularly during two thousand and twenty, another American president was 0:03:09.639 --> 0:03:12.840 left trying to persuade our oil producers to produce more oil. 0:03:13.320 --> 0:03:16.680 The problem now is, with the exception probably of Saudi 0:03:16.680 --> 0:03:19.480 Arabia and United Arab remberence. It's not quite clear how 0:03:19.480 --> 0:03:21.919 many of them really can produce more oil. Particularly I 0:03:22.000 --> 0:03:25.320 think there are difficulties with Kwait. So there's a great 0:03:25.360 --> 0:03:28.880 global energy rivalry now between the US, Russia, and China, 0:03:28.960 --> 0:03:31.160 and countries from Ukraine to Syria to as you say, 0:03:31.200 --> 0:03:33.959 Saudi have been caught up in this lack of foresight. 0:03:34.040 --> 0:03:36.040 I guess on the part of the United States, are 0:03:36.080 --> 0:03:39.200 we doomed to see nuclear powers face off until this 0:03:39.320 --> 0:03:43.720 energy revolution is somehow enacted. Yeah, I mean, I'm not 0:03:43.800 --> 0:03:45.840 sure how much I would say that there was a 0:03:45.880 --> 0:03:48.360 lack of foresight in the United States. I think that 0:03:48.400 --> 0:03:50.720 there was a lack of a joined up strategy at 0:03:50.800 --> 0:03:55.240 various points, and inability perhaps to see the difficulty of 0:03:55.240 --> 0:03:59.560 trying to achieve conflicting aims at the same time. In 0:03:59.600 --> 0:04:02.040 a way, the way to think about what's happened over 0:04:02.080 --> 0:04:06.280 the last decade in particular, is is that two competitions ensued. 0:04:06.720 --> 0:04:09.440 The first actually was in Europe and in some sense 0:04:09.800 --> 0:04:12.440 has been the most geo politically lethal, and that was 0:04:12.440 --> 0:04:15.200 a competition between the United States and Russia to sell 0:04:15.320 --> 0:04:19.440 natural gas in Europe, and the Russian point of view, 0:04:19.680 --> 0:04:23.200 that was a really different situation than the one that 0:04:23.240 --> 0:04:25.880 they had enjoyed in the two thousand's when they could 0:04:25.920 --> 0:04:29.160 take really the European gas market for granted. I think 0:04:29.200 --> 0:04:32.280 the big change that's happened in the United States, ironically 0:04:32.720 --> 0:04:35.839 in good part as a consequence of the US show boom, 0:04:36.680 --> 0:04:39.280 is that Saudi Arabia now has to think much more 0:04:39.320 --> 0:04:43.400 carefully about who it's selling its oil too, and that 0:04:43.440 --> 0:04:46.559 means that there's also a competition, i think, between saud 0:04:46.600 --> 0:04:49.680 Arabia and Russia to sell oil to the Chinese, and 0:04:50.080 --> 0:04:53.800 the Chinese leadership have a very strong awareness of China's 0:04:54.000 --> 0:04:59.400 strategic vulnerabilities around energy. China's also trying to act as 0:04:59.560 --> 0:05:03.480 no large oil importer has ever done before, which is 0:05:03.520 --> 0:05:07.760 really tried to influence the price by stockpiling. So we've 0:05:07.800 --> 0:05:11.400 got complicated dynamics because it's not just actually a competition 0:05:11.480 --> 0:05:14.800 between the producers. We've got this very large consumer in 0:05:14.920 --> 0:05:19.359 China that's actually not quite really doing what other large 0:05:19.400 --> 0:05:22.320 importers have done and is not really prepared to accept 0:05:22.320 --> 0:05:25.560 a passive position. In all this, there is the longer 0:05:25.800 --> 0:05:29.159 term ramifications of everything that's going on, and then there's 0:05:29.160 --> 0:05:31.880 the shorter term ones and there's a scramble now to 0:05:32.040 --> 0:05:34.920 figure out what can be done about Russian oil and 0:05:35.160 --> 0:05:39.440 europe dependents. Are China's ability to access it, if Europe 0:05:39.440 --> 0:05:43.120 dozen and so on? Is there a solution here beyond 0:05:43.440 --> 0:05:46.520 telling people to put on sweaters and reducing demands somehow? 0:05:47.240 --> 0:05:50.040 I think that any solution is going to involve some 0:05:50.080 --> 0:05:54.120 measure any way of reduced energy consumption, particularly when we're 0:05:54.160 --> 0:05:57.640 being the climate situation into the pickup. If we look 0:05:57.680 --> 0:06:01.400 at European unions, whatever the intention, it's going to be very, 0:06:01.480 --> 0:06:05.520 very difficult to reduce quickly imports from Russia, not least 0:06:05.640 --> 0:06:09.960 because Asian countries are also very big purchases of liquid 0:06:10.000 --> 0:06:13.880 natural gas imports, including from the United States. Indeed, prior 0:06:13.920 --> 0:06:17.080 to this crisis, more American exports of liquid natural gas 0:06:17.120 --> 0:06:20.279 we're going to Asia than to Europe. So if European 0:06:20.279 --> 0:06:23.080 countries are suddenly going to start competing for this gas, 0:06:23.160 --> 0:06:25.680 and we can already see these dynamics playing out, gas 0:06:25.800 --> 0:06:28.320 is going to become a lot more expensive only in Europe, 0:06:28.360 --> 0:06:30.799 but it's going to become more expensive in Asia too, 0:06:30.880 --> 0:06:34.040 And it's not so clear that Asian countries can simply 0:06:34.120 --> 0:06:37.359 real and take to Russia because there's only one major 0:06:37.400 --> 0:06:41.120 pipeline that goes to China. Helen, we were speaking of 0:06:41.160 --> 0:06:44.720 the dynamics that are constraining diversification from Russian natural gas, 0:06:44.800 --> 0:06:47.640 and so I want to quote from disorder. You say, 0:06:47.680 --> 0:06:50.880 in two thousand five, the pipelines through Ukraine still carried 0:06:50.920 --> 0:06:54.800 around seventy of the euth Russian gas. Well, Helen, not 0:06:54.880 --> 0:06:57.359 much has changed as we're seeing. Does Russia have the 0:06:57.360 --> 0:07:00.400 potential to pivot to Asia and particularly you know, the 0:07:00.440 --> 0:07:04.200 great consumer. In order for Russia to be able to 0:07:04.279 --> 0:07:07.480 increase its liquid natural gas export capacity, then it's going 0:07:07.520 --> 0:07:10.800 to need capital investment from these Asian countries, and that 0:07:11.000 --> 0:07:13.200 may well happen. I think we've already seen some signs 0:07:13.200 --> 0:07:15.600 of it from Japan and to some extent China as well. 0:07:15.640 --> 0:07:18.920 But new liquid natural gas exports from Russian aren't gonna 0:07:18.920 --> 0:07:22.520 happen quickly. So I think that in a way keeps 0:07:22.520 --> 0:07:25.520 everybody where they are in terms of the supply chains 0:07:25.560 --> 0:07:28.120 of energy, and that means prices are going up. So 0:07:28.200 --> 0:07:32.240 if European citizens want their countries to buy less gas 0:07:32.280 --> 0:07:35.160 from Russia, then the only thing left is really to 0:07:35.240 --> 0:07:38.560 reduce European gas consumption. And we can already see that 0:07:38.720 --> 0:07:42.000 reduced energy consumption is the direction of travel. I don't 0:07:42.000 --> 0:07:45.120 think that that means either that the Russian gas dependency 0:07:45.160 --> 0:07:47.920 can be eliminated quickly. Is the one way in which 0:07:48.080 --> 0:07:50.120 something can be done. Now, the politics of this are 0:07:50.120 --> 0:07:52.840 really difficult at the moment. I think there was at 0:07:52.920 --> 0:07:56.760 least moderate support for the idea of reducing gas consumption 0:07:56.800 --> 0:08:00.600 in Europe amongst many people, but certainly not amongst everybody. 0:08:00.640 --> 0:08:02.280 And I think that some of the people who are 0:08:02.280 --> 0:08:06.040 advocating it probably haven't really quite understood what the systemic 0:08:06.040 --> 0:08:10.960 consequences of ending washing gas imports would be. Helen alliances 0:08:11.000 --> 0:08:14.960 and multilateral institutions. I'm thinking particularly of NATO, which seemed 0:08:15.040 --> 0:08:18.520 to be receiving an importance during Trump's presidency. What happens 0:08:18.560 --> 0:08:20.920 to some of these alliances in terms of the shift 0:08:20.960 --> 0:08:24.960 from globalization to economic nationalism. I think that NATO is 0:08:25.000 --> 0:08:28.680 in a different position. I think that the fundamental difficulty 0:08:28.760 --> 0:08:34.000 that NATO has faced really comes from the differences in 0:08:34.120 --> 0:08:37.800 perspectives between On the one side, I mean, the slightly caricatures, 0:08:37.840 --> 0:08:41.520 but it will do on the one side, like Washington, London, 0:08:41.760 --> 0:08:46.880 Warsaw and the Baltic countries and on the other side, France, Germany, Italy, 0:08:47.800 --> 0:08:50.480 and there's been a very different view taken of the 0:08:50.640 --> 0:08:53.440 nature of the potential Russian throat and the nature of 0:08:53.640 --> 0:08:56.480 Russian power, and that this is very divisive in the 0:08:56.600 --> 0:08:59.880 European Union because obviously there are a number of Eastern 0:09:00.000 --> 0:09:04.199 European European Union states that have got borders with Russia 0:09:04.280 --> 0:09:07.720 and feel very fearful since the war in Ukraine started. 0:09:08.160 --> 0:09:10.640 And on the other side you had someone like President 0:09:10.720 --> 0:09:13.360 Matt Kron who I think it was in late two 0:09:13.360 --> 0:09:17.440 thousand and nineteen, was talking about resetting relations with Russia 0:09:17.520 --> 0:09:20.640 was a necessary condition for the European project being realized. 0:09:21.280 --> 0:09:25.480 So NATO brings out not only its own internal divisions, 0:09:25.640 --> 0:09:28.120 but also go to the heart of the divisions within 0:09:28.160 --> 0:09:32.439 the European Union that enlarged Eastwoods from two thousand and four. 0:09:33.000 --> 0:09:36.800 I think in terms of the international economic organizations we 0:09:36.840 --> 0:09:39.360 can see something different. I think there were trade organization 0:09:39.400 --> 0:09:42.080 has been on the back foot for a long time now. 0:09:42.080 --> 0:09:45.720 It was I would say largely irrelevant during the US 0:09:45.800 --> 0:09:48.839 Chatina trade war. During Trump's presidency, I think there was 0:09:48.880 --> 0:09:52.080 some difficult questions now for the International Monetary Fund, though 0:09:52.440 --> 0:09:55.360 as we see a number of emerging market in developing 0:09:55.400 --> 0:09:59.480 countries in considerable currency and financial difficulties as a result 0:09:59.520 --> 0:10:02.120 of the high and energy prices and the rising food 0:10:02.160 --> 0:10:04.840 prices that have come with them. I think the situation 0:10:04.880 --> 0:10:09.839 in Sri Lanka and Tunisia and Pakistan actually particularly troubling. Here. 0:10:10.520 --> 0:10:13.760 As soon as we get into this minefield, so to speak, 0:10:13.880 --> 0:10:17.160 we've got the question of like, well, what kind of 0:10:17.880 --> 0:10:22.120 international financial credit can be provided to countries and what 0:10:22.200 --> 0:10:25.760 kind of political conditions come with that, And even if 0:10:25.840 --> 0:10:27.960 the I m F is in a position to provide 0:10:28.000 --> 0:10:31.400 loans with tolerable conditions to the governments in these countries, 0:10:31.679 --> 0:10:34.040 is we've seen over the last really since I'd say 0:10:34.040 --> 0:10:36.640 the two thousand and seven eight financial crash. How in 0:10:36.720 --> 0:10:38.920 some ways the lender that really matters in the world 0:10:39.240 --> 0:10:42.600 isn't actually the IMF, but it's the Federal Reserve Board 0:10:42.679 --> 0:10:45.120 essentially as an international lender of last resort, and one 0:10:45.160 --> 0:10:48.160 of the countries that's been in considerable financial difficulty in 0:10:48.160 --> 0:10:50.760 this respect for some time now as Turkey. Turkey is 0:10:50.760 --> 0:10:54.840 obviously pretty geopolitically significant in this war. Turkey doesn't have 0:10:54.880 --> 0:10:58.640 a swap blind to the Federal Reserve Board. So I 0:10:58.679 --> 0:11:02.200 think that the really hard questions, not particularly perhaps a 0:11:02.240 --> 0:11:03.960 question of dealing with the country like Sri Lanka, but 0:11:03.960 --> 0:11:06.559 the question of dealing with the country like Turkey, is 0:11:06.679 --> 0:11:09.200 in something been taken out of the remit of the 0:11:09.280 --> 0:11:12.320 international financial institutions, or at least that that's not where 0:11:12.360 --> 0:11:15.560 the decisive action is. Yeah, I'm glad you mentioned Turkey 0:11:15.760 --> 0:11:18.840 obviously experiencing runaway inflation. In Egypt another one, you know, 0:11:18.880 --> 0:11:22.800 West Africa not getting food aid, and droughts steering places 0:11:22.800 --> 0:11:24.760 like Somalia in the face. I mean, it seems like 0:11:24.840 --> 0:11:28.079 we might be in for a period of extraordinary human 0:11:28.120 --> 0:11:31.160 suffering that was exacerbated by Russia's war in Ukraine, but 0:11:31.240 --> 0:11:35.120 not necessarily caused by it. Anxieties that are under a 0:11:35.240 --> 0:11:39.680 lying many relationships, even multilateral institutions and their members seem 0:11:39.760 --> 0:11:43.000 to be coming to the surface. What reckonings need to happen. 0:11:43.120 --> 0:11:45.480 Helen Well, I think that in the European Union and 0:11:45.559 --> 0:11:48.800 reckoning has really already happened, because quite simply, the view 0:11:48.840 --> 0:11:51.040 and warsaw is triumphed throw over the view of Berlin 0:11:51.120 --> 0:11:53.560 and Paris during the course of this war. That isn't 0:11:53.559 --> 0:11:55.959 to say that the politicians in the German government will 0:11:56.040 --> 0:11:58.840 now do exactly want the Poles of the Latvians, etcetera, 0:11:58.840 --> 0:12:00.880 and want them to do in terms of providing support 0:12:00.960 --> 0:12:04.439 for Ukraine have the kind desired by the Ukrainian government. 0:12:04.960 --> 0:12:07.760 But it does mean I think that the assumption of 0:12:08.080 --> 0:12:11.280 German foreign policy going back to the so going back 0:12:11.320 --> 0:12:13.880 to the Soviet period has really shattered. Now. I think 0:12:13.920 --> 0:12:17.600 that Durman politicians might want to try and reconstruct it, 0:12:17.640 --> 0:12:20.040 but I think they're going to find it extraordinarily difficult 0:12:20.120 --> 0:12:23.680 to go back to the idea that economic interdependence with 0:12:23.800 --> 0:12:28.880 Russians and constraining force on Russian behavior, and they are 0:12:28.920 --> 0:12:31.880 going to have to take the problems of the security 0:12:32.000 --> 0:12:34.640 of the independent states that sit between Germany and Russia 0:12:35.040 --> 0:12:38.120 much more seriously than they've done since that coal I 0:12:38.120 --> 0:12:41.360 think in terms of erecting more generally, I think partly 0:12:41.400 --> 0:12:44.680 what is going on is the realization amongst Western governments, 0:12:44.679 --> 0:12:48.439 perhaps in particular, that the issue of energy and climate 0:12:48.520 --> 0:12:51.320 can't really be thought of in binary terms. We can't 0:12:51.360 --> 0:12:53.439 be in a position where we're only serious about the 0:12:53.520 --> 0:12:55.800 climate if we're not taking any notice of what's going 0:12:55.840 --> 0:12:58.360 on with the problems of fossil fuel energy. And I 0:12:58.360 --> 0:13:00.280 think you can see this in the moves that Iden, 0:13:00.400 --> 0:13:03.320 you know, has made, is that Biden came in wanted 0:13:03.360 --> 0:13:07.040 to prioritize climate hope that oil supply and oil prices 0:13:07.080 --> 0:13:11.000 could take care of themselves. It isn't possible for governments 0:13:11.200 --> 0:13:15.040 to try to demonstrate their climate credibility by disengaging from 0:13:15.040 --> 0:13:17.920 the issue of having a fossil fuel energy strategy. That 0:13:18.040 --> 0:13:20.120 isn't because we don't need to move away from fossil 0:13:20.160 --> 0:13:22.520 fuel energy, but given that we can't do that with 0:13:22.600 --> 0:13:25.480 any alacrity, fossil fuel energy supplies and not going to 0:13:25.520 --> 0:13:27.679 take care of themselves in the immediate present, and the 0:13:27.720 --> 0:13:30.440 only way in which the pressures on them right now 0:13:30.640 --> 0:13:34.280 is reduced is by considering reduced energy consumption. Listeners a 0:13:34.360 --> 0:13:38.439 reminder do get in touch. As always, comments and opinions welcome. 0:13:38.720 --> 0:13:41.600 I'm at vanniy Quinn on Twitter or just email vequin 0:13:41.720 --> 0:13:43.959 at Bloomberg dot net. Helen, I want to talk a 0:13:43.960 --> 0:13:46.920 little more about China's rise yet another global shift that 0:13:46.960 --> 0:13:50.000 you point out is very nuanced. In the last twelve 0:13:50.000 --> 0:13:52.679 months in particular, we're really starting to see chinks in 0:13:52.760 --> 0:13:55.480 China's armor in terms of its growth and COVID strategies, 0:13:55.600 --> 0:13:58.720 market turbulenes too, and developer a faults and on and on. 0:13:59.240 --> 0:14:01.880 Is China going to be the formidable fold that we've 0:14:01.880 --> 0:14:05.360 been suspecting it might be? Yeah, this is an interesting question. 0:14:05.600 --> 0:14:08.280 I mean, I think that actually the two thousands and 0:14:08.360 --> 0:14:14.800 tens showed that China pulled in contradictory directions when it 0:14:14.880 --> 0:14:18.040 came to the question of whether it was arising power. 0:14:18.320 --> 0:14:20.960 So obviously, if we looked at it in terms of 0:14:21.200 --> 0:14:25.320 GDP growth, then China has grew through the two thousands 0:14:25.320 --> 0:14:30.360 and tens quicker than the Western economies, and particularly by 0:14:30.400 --> 0:14:34.120 two thousand and seventeen. Really, I think everybody understood that 0:14:34.240 --> 0:14:36.640 in order for Western economies to grow, for the rest 0:14:36.640 --> 0:14:38.760 of the world economy to grow, China needed to grow 0:14:39.080 --> 0:14:42.440 globally synchronized growth. I think the imf cause of the synchronicity, 0:14:42.480 --> 0:14:44.640 if you like, was China. But on the other hand, 0:14:44.720 --> 0:14:48.280 I think that China had some clear economic difficulties in 0:14:48.280 --> 0:14:50.560 the two thousands and tens that weren't there for in 0:14:50.600 --> 0:14:54.160 the two thousand's. A point in particular to China's two 0:14:54.160 --> 0:14:57.520 thousand and fifteen sixteen financial crisis and when it faced 0:14:57.560 --> 0:15:00.640 a serious outflow of capital. When the casitions of the 0:15:00.640 --> 0:15:04.400 Federal reserves plans to start raising interest rates in the 0:15:04.440 --> 0:15:08.040 ladder part of two thousand and fifteen became clear, China 0:15:08.120 --> 0:15:12.240 I think, acquired a significantly greater vulnerability to the dollar 0:15:12.360 --> 0:15:14.960 and to dollar debt during the two thousand and ten 0:15:15.280 --> 0:15:18.120 compared to what had had in the in the two thousands, 0:15:18.160 --> 0:15:21.600 and that also made the push that China had engaged 0:15:21.640 --> 0:15:26.080 into internationalize its currency there and men be really impossible 0:15:26.280 --> 0:15:28.440 to pull off. It led to a fall away in 0:15:28.440 --> 0:15:33.280 investment to a number of European countries. It became difficult, 0:15:33.520 --> 0:15:37.480 I think for people to see that China could move 0:15:37.560 --> 0:15:40.560 up leagues, so to speak, financially, if it had a 0:15:40.600 --> 0:15:45.640 currency that was still subject to such strict capital controls. 0:15:45.960 --> 0:15:48.840 And now China is in this difficult position in regard 0:15:48.920 --> 0:15:52.880 to COVID. Clearly the Chinese vaccine is not as effective 0:15:53.000 --> 0:15:56.400 as Western vaccine, as the take up has not been great. 0:15:56.680 --> 0:15:59.760 They're now obviously in a position where they've decided that 0:15:59.840 --> 0:16:02.120 the only way that they can deal with this outbreak, 0:16:02.160 --> 0:16:04.320 however severe or not it turns out to be, it 0:16:04.400 --> 0:16:08.040 is with these lockdowns and locking down Shanghai is obviously 0:16:08.360 --> 0:16:12.560 a very very different proposition. This clearly has profound consequences 0:16:12.600 --> 0:16:15.560 for China, but it also has profound consequences for the 0:16:15.560 --> 0:16:16.840 rest of the world in terms of the way in 0:16:16.880 --> 0:16:20.240 which China's weakness then moves itself around the world because 0:16:20.240 --> 0:16:23.600 the importance of China to international trade. So I think 0:16:23.600 --> 0:16:26.920 that what's true about the world, and has been true 0:16:27.120 --> 0:16:29.160 at some point in the two thousands and tens, is 0:16:29.200 --> 0:16:31.320 that the rest of the world is now as much 0:16:31.360 --> 0:16:34.680 exposed to China's weakness as it is to China's strengths. 0:16:35.040 --> 0:16:37.280 And in terms of capital flows and so on, I 0:16:37.320 --> 0:16:40.400 mean that the momentum had been towards increased too easier 0:16:40.560 --> 0:16:42.680 capital flows from China to the rest of the world 0:16:42.760 --> 0:16:45.000 and vice versa capital market openers. Are we coming to 0:16:45.000 --> 0:16:47.000 the end of that area, you think, Helen, it's very 0:16:47.000 --> 0:16:48.880 striking the way in which the Wall Street films have 0:16:48.960 --> 0:16:52.360 been very keen to move into China over the last 0:16:52.440 --> 0:16:55.000 thirteen months. And I think that one of the things 0:16:55.080 --> 0:16:56.520 that I actually spent quite a bit of time on 0:16:56.720 --> 0:16:58.160 in the book that looked like it was going to 0:16:58.200 --> 0:17:00.840 be consequential, which was the break down really of Hong 0:17:00.920 --> 0:17:04.960 Kong's position as a kind of portal between the Western 0:17:05.040 --> 0:17:08.320 China and financially looks like it's less significant than I 0:17:08.359 --> 0:17:11.159 thought that it that it might be that the tightening 0:17:11.240 --> 0:17:13.439 up in Hong Kong hasn't led to a sort of 0:17:13.480 --> 0:17:16.240 a greater financial separation between China and the rest of 0:17:16.240 --> 0:17:20.880 the world. Yeah, so the fact that the financial interdependence 0:17:20.960 --> 0:17:24.840 is deepened it is really both quite striking and how 0:17:24.880 --> 0:17:28.000 it plays out in terms of the decoupling on the 0:17:28.040 --> 0:17:30.600 trade and technology side, which doesn't look to me that 0:17:30.680 --> 0:17:33.480 it's gone away before we even get onto the sense 0:17:33.560 --> 0:17:36.800 of green energy competition. This is going to be really 0:17:36.840 --> 0:17:41.440 interesting to watch how these competing dynamics interact with each other. 0:17:41.720 --> 0:17:44.399 There's a lot of handwringing about small d democracy, you know, 0:17:44.480 --> 0:17:48.120 you talk a lot about representative democracy and about neoliberalism 0:17:48.160 --> 0:17:50.800 and the death of the Anglo American model. What happens 0:17:50.800 --> 0:17:54.680 in the next electoral cycle, Well, I mean, I think 0:17:54.720 --> 0:17:56.600 the United States is in for another tough at least 0:17:56.600 --> 0:18:00.640 presidential election in two thousand and twenty four, because it's 0:18:00.680 --> 0:18:04.760 difficult to see how the Democrats go into it in 0:18:04.800 --> 0:18:08.200 any kind of good shape. I'm not saying it's particularly 0:18:08.200 --> 0:18:12.600 Biden's fault. But Biden has ended up having to deal 0:18:12.720 --> 0:18:15.600 with a set of really, really hard problems of the 0:18:15.680 --> 0:18:17.680 kind that we were just talking about in the first 0:18:17.680 --> 0:18:21.760 part of our conversation, particularly about energy. And if you 0:18:21.800 --> 0:18:25.320 look at the history since the nineteen seventies of American 0:18:25.560 --> 0:18:29.680 presidential approval ratings and oil prices, they quite strongly correlate. 0:18:30.160 --> 0:18:35.280 At times they extraordinarily strongly correlate. So it's very difficult, 0:18:35.320 --> 0:18:38.520 I think, to see how Biden would get reelected, assuming 0:18:38.560 --> 0:18:41.760 he does want to run again. But at the same time, 0:18:42.040 --> 0:18:45.000 you clearly have, you know, some pretty profound divisions within 0:18:45.080 --> 0:18:51.080 the Republican Party, and how actually there can be an 0:18:51.119 --> 0:18:55.320 election that doesn't bring this issue of losers consent back 0:18:55.400 --> 0:18:58.679 into play again. I find that quite difficult to see. 0:18:59.200 --> 0:19:02.080 And if we move to the mid terms, then clearly, 0:19:02.400 --> 0:19:05.400 if the Democrats were to lose the mid terms quite badly, 0:19:05.440 --> 0:19:09.000 which seems looking from here quite possible, then that makes 0:19:09.040 --> 0:19:12.800 things very legislatively difficult for Biden in the second half 0:19:12.800 --> 0:19:16.880 of his presidency, which kind of creates more impast politics, 0:19:16.920 --> 0:19:19.399 which again I don't think there's anything to help the 0:19:19.440 --> 0:19:23.480 strains on democracy. How are the deep structural forces that 0:19:23.520 --> 0:19:26.200 you've been explaining that are at work in the international 0:19:26.200 --> 0:19:29.600 economy interacting with political contingency. So I guess previously I 0:19:29.640 --> 0:19:32.560 would have said things like Brexit from selection, but now 0:19:32.680 --> 0:19:35.920 it's Biden's low polling the outlook for the midterms. Yeah, 0:19:35.960 --> 0:19:37.800 I mean, I think that what we can see like 0:19:37.840 --> 0:19:40.439 through the two thousand and tens was that things that 0:19:40.480 --> 0:19:42.400 look like they've got nothing to do with each other, 0:19:42.600 --> 0:19:45.760 I that look quite contingent on something quite specific to 0:19:45.800 --> 0:19:49.800 a country's politics, actually can be linked to these changing 0:19:49.840 --> 0:19:52.480 structural forces. And that's one of the reasons why I 0:19:52.520 --> 0:19:54.080 wanted to write the book in the way in which 0:19:54.119 --> 0:19:57.080 I did so. You wouldn't think on the surface, for example, 0:19:57.200 --> 0:20:00.119 that Brexit referendum and the difficulties that David Cameron, but 0:20:00.200 --> 0:20:02.800 as Prime Minister had him winning that referendum, had got 0:20:02.800 --> 0:20:05.119 anything to do with high oil prices in two thousand 0:20:05.200 --> 0:20:08.680 and eleven. But I think that there was a relationship 0:20:09.000 --> 0:20:12.120 because of the difficulties that those high oil prices caused 0:20:12.119 --> 0:20:16.240 for the European Central Bank in responding to high oil 0:20:16.280 --> 0:20:19.399 prices by raising interest rates twice in two thousand and eleven, 0:20:19.440 --> 0:20:22.639 the Eurozone got pushed back into recession that made for 0:20:22.760 --> 0:20:26.920 a macroeconomic divergence with the UK economy, led to an 0:20:26.920 --> 0:20:30.560 increase in migration that produced something of a political reaction 0:20:30.600 --> 0:20:33.119 in the United Kingdom that spurred the rise of the 0:20:33.160 --> 0:20:37.240 United Kingdom Independence Party wanting a referendum money you membership. 0:20:37.560 --> 0:20:39.960 That was part of the story in which Camera not 0:20:40.000 --> 0:20:42.840 necessarily came to the decision in the first place in 0:20:42.880 --> 0:20:45.960 two thousand adverting to hold a referendum, but the way 0:20:45.960 --> 0:20:49.800 he tried to renegotiate the terms of UK membership before 0:20:49.800 --> 0:20:52.880 holding the referendum I think was very much influenced by 0:20:52.920 --> 0:20:55.720 the rise of UK. So things in one sense that 0:20:55.760 --> 0:21:00.239 look contingent actually I think had considerably more struct or 0:21:00.240 --> 0:21:04.199 forces behind them. The Pandemics an interesting example because in 0:21:04.280 --> 0:21:06.560 lots of ways it was a contingency. But I think 0:21:06.600 --> 0:21:09.199 that the nilists would say that actually there were some 0:21:09.240 --> 0:21:12.200 reasons to think that the nature of the global economy, 0:21:12.320 --> 0:21:15.440 particularly the way in which global air transport were actually 0:21:15.440 --> 0:21:18.760 acted as a rather rapid carrier. I think that the 0:21:19.400 --> 0:21:21.680 thing about elections we didn't see it in the French 0:21:21.720 --> 0:21:24.320 election is is that sometimes that they can be, you know, 0:21:24.400 --> 0:21:27.320 like incredibly close, and I think we saw that to 0:21:27.440 --> 0:21:30.680 some extent in both the last two US presidential elections, 0:21:30.720 --> 0:21:33.640 where the margins and individual states that were decisive didn't 0:21:33.640 --> 0:21:35.840 turn out to be very large at all. It doesn't 0:21:35.840 --> 0:21:38.960 take much to imagine either of those elections, particularly perhaps 0:21:39.000 --> 0:21:41.480 the first one when Trump was elected, going the other way, 0:21:41.920 --> 0:21:44.440 and then much of what happened in the second half 0:21:44.440 --> 0:21:46.600 of the two thousand tents might have been different. I mean, 0:21:46.920 --> 0:21:49.240 I think some things wouldn't have been. For instance, I 0:21:49.280 --> 0:21:52.080 think that Helloy Klington election victory and two thousand and 0:21:52.119 --> 0:21:54.800