WEBVTT - Helen Thompson on the New World Disorder 0:00:00.680 --> 0:00:04.320 This is the best of Bloomberg Opinion with Bonny Quinn 0:00:04.600 --> 0:00:16.120 on Bloomberg Radio. Welcome to Bloomberg Opinion listeners. I'm Valley Quinn. 0:00:16.360 --> 0:00:19.480 A special episode of Bloomberg Opinion this week. Helen Thompson, 0:00:19.560 --> 0:00:22.720 Professor of political economy at Cambridge University, is the author 0:00:22.800 --> 0:00:26.599 of Disorder, Hard Times in the twenty one Century. The disorder, 0:00:26.640 --> 0:00:30.800 the book presents, emanates essentially from oil and fossil fuels. 0:00:30.840 --> 0:00:36.000 More broadly, the geopolitical and transactional complexities of producing, securing, 0:00:36.280 --> 0:00:41.040 transporting and consuming that energy. According to Disorder, underpinned the 0:00:41.080 --> 0:00:45.080 great structural changes, both economic and political, of the last century. 0:00:45.520 --> 0:00:49.000 There's more, much more, but let's get started. So, Helen, 0:00:49.159 --> 0:00:51.640 are we at a pivotal point now in how the 0:00:51.640 --> 0:00:54.880 global economy operates? Yeah, I think that we are. I 0:00:54.880 --> 0:00:57.880 think we're actually at a pivotal point before the war. 0:00:58.320 --> 0:01:00.400 I think that what we could see during the latter 0:01:00.480 --> 0:01:04.400 part of last year and the months autumn before Omgon 0:01:04.600 --> 0:01:07.240 hit was that the world economy is facing some pretty 0:01:07.240 --> 0:01:11.200 serious energy constraints that really, at any point when there's 0:01:11.240 --> 0:01:14.040 any significant growth, the world economy is now running into 0:01:14.120 --> 0:01:16.679 high energy prices, and we're not just talking about high 0:01:16.680 --> 0:01:19.759 oil prices, as has been the case with most past 0:01:19.880 --> 0:01:22.920 energy crisis, at LEAs since the nineteen seventies, we're talking 0:01:22.959 --> 0:01:26.160 about high natural gas prices and high coal prices too, 0:01:26.160 --> 0:01:28.800 and I think high core prices has really taken a 0:01:28.800 --> 0:01:31.039 lot of people, including myself. We try to follow the 0:01:31.160 --> 0:01:34.200 energy situation quite by surprise, and I think that that 0:01:34.240 --> 0:01:36.759 goes to show the depth of the issues that we're 0:01:36.880 --> 0:01:39.720 now facing, particularly when we bear in mind that we 0:01:39.760 --> 0:01:42.000 would like the world economy to be moving away from 0:01:42.080 --> 0:01:44.880 coal as rapidly as possible given the need to address 0:01:44.920 --> 0:01:48.560 climate change. One of your main disease is that the 0:01:48.680 --> 0:01:51.320 US failed to secure the stability of its relationships in 0:01:51.360 --> 0:01:54.400 the Middle East, and that created an instability around energy, 0:01:54.440 --> 0:01:57.400 which reverberates. So in a sense, this shouldn't have taken 0:01:57.440 --> 0:02:00.120 any of us, and by surprise by that pieces right, no. 0:02:00.440 --> 0:02:02.600 I think that what we can see during the two 0:02:02.600 --> 0:02:05.400 thousand and tens is is that the United States, in 0:02:05.480 --> 0:02:07.840 terms of its own energy needs, is in a much 0:02:07.880 --> 0:02:10.200 stronger position than it had been in the previous decades. 0:02:10.240 --> 0:02:13.919 Since the nineteen seventies, because the shale oil and gas 0:02:13.919 --> 0:02:17.280 boom allowed the United States to achieve a higher level 0:02:17.360 --> 0:02:22.560 of energy independence much reduced energy dependence. What was revealing, though, 0:02:22.639 --> 0:02:25.360 was the way in which as the United States achieved 0:02:25.400 --> 0:02:29.440 that it's very success had so many disruptive consequences in 0:02:29.480 --> 0:02:33.320 the Middle East, in particular because it was very problematic 0:02:33.320 --> 0:02:35.920 from the Saudi point of view to now find that 0:02:36.040 --> 0:02:40.000 American shell producers were big rivals for shares of world 0:02:40.120 --> 0:02:43.160 oil market, and as that came at a time when 0:02:43.200 --> 0:02:45.560 the United States and the Obama was also trying to 0:02:45.600 --> 0:02:49.280 improve relations with around and then things didn't work out 0:02:49.360 --> 0:02:52.080 very well in Syria. Despite the fact that studies and 0:02:52.560 --> 0:02:54.760 states have started on the same side, what we see 0:02:54.800 --> 0:02:56.600 through the two thousands and the end as the shell 0:02:56.680 --> 0:03:00.920 boom goes on, is a complete deterioration of US relations 0:03:01.400 --> 0:03:04.160 and although to some extent they're repaired during the Trump 0:03:04.240 --> 0:03:07.480 presidencies that Trump tries to hug the Saudi Is hard, 0:03:07.720 --> 0:03:11.040 he still isn't really able to influence the Saudis when 0:03:11.040 --> 0:03:13.040 it comes to the price of oil. And as the 0:03:13.160 --> 0:03:16.560 US shall boom foltered during the pandemic, particularly during two 0:03:16.639 --> 0:03:20.079 thousand and twenty, another American president was left trying to 0:03:20.120 --> 0:03:23.640 persuade our oil producers to produce more oil. The problem 0:03:23.680 --> 0:03:27.080 now is, with the exception probably of Saudi Arabia and 0:03:27.120 --> 0:03:29.680 United Arab Embence, it's not quite clear how many of 0:03:29.680 --> 0:03:32.160 them really can produce more oil. Particularly I think there 0:03:32.200 --> 0:03:36.040 are difficulties with Kuwait. So there's a great global energy 0:03:36.120 --> 0:03:39.360 rivalry now between the US, Russia, and China, and countries 0:03:39.360 --> 0:03:41.680 from Ukraine to Syria to as you say, Saudi have 0:03:41.760 --> 0:03:44.240 been caught up in this lack of foresight. I guess 0:03:44.240 --> 0:03:46.680 on the part of the United States, are we doomed 0:03:46.800 --> 0:03:49.960 to see nuclear powers face off until this energy revolution 0:03:50.000 --> 0:03:54.480 is somehow enacted. Yeah, I mean, I'm not sure how 0:03:54.560 --> 0:03:56.120 much I would say that there was a lack of 0:03:56.120 --> 0:03:58.520 foresight in the United States. I think that there was 0:03:58.520 --> 0:04:01.840 a lack of a joined up stress at various points, 0:04:01.840 --> 0:04:05.520 and inability perhaps to see the difficulty of trying to 0:04:05.560 --> 0:04:09.839 achieve conflicting aims at the same time. In a way, 0:04:09.880 --> 0:04:12.680 the way to think about what's happened over the last decade, 0:04:12.680 --> 0:04:16.960 in particular, is is that two competitions ensued. The first 0:04:17.240 --> 0:04:20.040 actually was in Europe and in some sense has been 0:04:20.080 --> 0:04:23.040 the most geo politically lethal, and that was a competition 0:04:23.120 --> 0:04:25.920 between the United States and Russia to sell natural gas 0:04:26.160 --> 0:04:30.160 in Europe, and the Russian point of view, that was 0:04:30.520 --> 0:04:33.839 a really different situation than the one that they'd enjoyed 0:04:33.880 --> 0:04:36.440 in the two thousand's when they could take really the 0:04:36.480 --> 0:04:39.719 European gas market for granted. I think the big change 0:04:39.760 --> 0:04:43.159 that's happened in the United States, ironically in good part 0:04:43.200 --> 0:04:47.000 as a consequence of the US show boom, is that 0:04:47.279 --> 0:04:50.360 Saudi Arabia now has to think much more carefully about 0:04:50.400 --> 0:04:53.720 who it's selling its oil too, and that means that 0:04:53.760 --> 0:04:57.000 there's also a competition, i think, between saud Arabia and 0:04:57.040 --> 0:05:00.560 Russia to sell oil to the Chinese, and the Chinese 0:05:00.680 --> 0:05:05.520 leadership have a very strong awareness of China's strategic vulnerabilities 0:05:05.560 --> 0:05:09.640 around energy. China is also trying to act as no 0:05:10.320 --> 0:05:13.960 large importer has ever done before, which is really tried 0:05:14.040 --> 0:05:18.599 to influence the price by stockpiling. So we've got complicated 0:05:18.680 --> 0:05:22.760 dynamics because it's not just actually a competition between the producers. 0:05:22.800 --> 0:05:26.400 We've got this very large consumer in China that's actually 0:05:26.560 --> 0:05:30.400 not quite really doing what other large importers have done 0:05:30.400 --> 0:05:33.120 and is not really prepared to accept a passive position 0:05:33.160 --> 0:05:37.560 in all this. There is the longer term ramifications of 0:05:37.640 --> 0:05:40.120 everything that's going on, and then there's the shorter term ones, 0:05:40.200 --> 0:05:42.760 and there's a scramble now to figure out what can 0:05:42.800 --> 0:05:46.920 be done about Russian oil and europe dependents honored China's 0:05:47.040 --> 0:05:50.000 ability to access it, if Europe dozen and so on. 0:05:50.960 --> 0:05:54.240 Is there a solution here beyond telling people to put 0:05:54.240 --> 0:05:57.840 on sweaters and reducing demands somehow? I think that any 0:05:57.880 --> 0:06:00.880 solution is going to involve some measure any way of 0:06:01.120 --> 0:06:05.520 reduced energy consumption, particularly when we're being the climate situation 0:06:05.720 --> 0:06:09.080 into the picture. If we look at European unions, whatever 0:06:09.120 --> 0:06:12.480 the intentions, it's going to be very, very difficult to 0:06:12.520 --> 0:06:17.000 reduce quickly imports from Russia, not least because Asian countries 0:06:17.200 --> 0:06:21.040 are also very big purchases of liquid natural gas imports, 0:06:21.040 --> 0:06:24.560 including from the United States. Indeed, prior to this crisis, 0:06:24.640 --> 0:06:27.400 more American exports of liquid natural gas we're going to 0:06:27.520 --> 0:06:31.000 Asia than to Europe. So, if European countries are suddenly 0:06:31.000 --> 0:06:33.360 going to start competing for this gas, and we could 0:06:33.360 --> 0:06:35.920 already see these dynamics playing out, gas is going to 0:06:36.000 --> 0:06:38.440 become a lot more expensive only in Europe, but it's 0:06:38.480 --> 0:06:41.400 going to become more expensive in Asia too, and it's 0:06:41.440 --> 0:06:44.360 not so clear that Asian countries can simply real and 0:06:44.440 --> 0:06:47.880 take to Russia because there's only one major pipeline that 0:06:47.920 --> 0:06:51.600 goes to China. Helen, we were speaking of the dynamics 0:06:51.640 --> 0:06:55.039 that are constraining diversification from Russian natural gas, and so 0:06:55.080 --> 0:06:57.840 I want to quote from disorder. You say in two 0:06:57.880 --> 0:07:01.080 thousand five, the pipelines through Ukraine and still carried around 0:07:01.080 --> 0:07:04.680 seventy of the euth Russian gas. Well, hell, and not 0:07:04.760 --> 0:07:07.240 much has changed as we're seeing. Does Russia have the 0:07:07.279 --> 0:07:11.080 potential to pivot to Asia and particularly China, the great consumer? 0:07:11.840 --> 0:07:14.800 In order for Russia to be able to increase its 0:07:14.960 --> 0:07:17.720 liquid natural gas export capacity, then it's going to need 0:07:17.760 --> 0:07:21.680 capital investment from these Asian countries, and that may well happen. 0:07:21.720 --> 0:07:23.520 I think we've already seen some signs of it from 0:07:23.600 --> 0:07:26.240 Japan and to some extent China as well, But new 0:07:26.320 --> 0:07:29.560 liquid natural gas exports from Russian aren't gonna happen quickly. 0:07:30.760 --> 0:07:32.840 So I think that in a way, it keeps everybody 0:07:32.880 --> 0:07:36.200 where they are in terms of the supply chains of energy, 0:07:36.280 --> 0:07:38.960 and that means prices are going up. So if European 0:07:39.000 --> 0:07:42.800 citizens want their countries to buy less gas, from Russia. 0:07:42.960 --> 0:07:46.200 Then the only thing left is really to reduce European 0:07:46.240 --> 0:07:49.360 gas consumption, and we can already see that reduced energy 0:07:49.400 --> 0:07:52.160 consumption is the direction of travel. I don't think that 0:07:52.160 --> 0:07:55.240 that means either that the Russian gas dependency can be 0:07:55.280 --> 0:07:58.480 eliminated quickly. Is the one way in which something can 0:07:58.520 --> 0:08:01.280 be done. Now, the politics of this really difficult at 0:08:01.320 --> 0:08:04.080 the moment. I think there was at least moderate support 0:08:04.560 --> 0:08:07.880 for the idea of reducing gas consumption in Europe amongst 0:08:07.920 --> 0:08:11.000 many people, but certainly not amongst everybody, And I think 0:08:11.160 --> 0:08:13.480 that some of the people who are advocating it probably 0:08:13.520 --> 0:08:17.520 haven't really quite understood what the systemic consequences of ending 0:08:17.560 --> 0:08:22.520 washing gas imports would be. Helen alliances and multilateral institutions. 0:08:22.520 --> 0:08:25.560 I'm thinking particularly of NATO, which seemed to be receiving 0:08:25.560 --> 0:08:28.840 an importance during Trump's presidency. What happens to some of 0:08:28.880 --> 0:08:31.920 these alliances in terms of the shift from globalization to 0:08:32.320 --> 0:08:36.280 economic nationalism. I think that NATO is in a different position. 0:08:36.520 --> 0:08:40.480 I think that the fundamental difficulty that NATO has faced 0:08:41.000 --> 0:08:45.960 really comes from the differences in perspectives between On the 0:08:46.000 --> 0:08:48.079 one side, I mean the slightly caricatures, but it will 0:08:48.120 --> 0:08:52.600 do on the one side, like Washington, London, Warsaw and 0:08:52.640 --> 0:08:56.760 the Baltic countries, and on the other side France, Germany, Italy, 0:08:57.679 --> 0:09:00.400 and there's been a very different view taken of the 0:09:00.559 --> 0:09:03.320 nature of the potential Russian throat and the nature of 0:09:03.520 --> 0:09:06.400 Russian power, and that this is very divisive in the 0:09:06.480 --> 0:09:09.800 European Union because obviously there are a number of Eastern 0:09:09.800 --> 0:09:14.079 European European Union states that have got borders with Russia 0:09:14.160 --> 0:09:17.560 and feel very fearful since the war in Ukraine started. 0:09:18.040 --> 0:09:20.520 And on the other side you had someone like President 0:09:20.600 --> 0:09:23.240 Matt Kron who I think it was in late two 0:09:23.280 --> 0:09:27.360 thousand and nineteen, was talking about resetting relations with Russia 0:09:27.400 --> 0:09:30.520 was a necessary condition for the European project being realized. 0:09:31.160 --> 0:09:35.480 So NATO brings out not only its own internal divisions, 0:09:35.520 --> 0:09:38.000 but also go to the heart of the divisions within 0:09:38.040 --> 0:09:42.320 the European Union that enlarged Eastwoods from two thousand and four. 0:09:42.880 --> 0:09:46.680 I think in terms of the international economic organizations we 0:09:46.720 --> 0:09:49.400 can see something different. I think the trade organization has 0:09:49.400 --> 0:09:51.960 been on the back foot for a long time now. 0:09:52.000 --> 0:09:55.600 It was i would say largely irrelevant during the US 0:09:55.679 --> 0:09:58.719 China trade war. During Trump's presidency. I think there was 0:09:58.760 --> 0:10:01.960 some difficult questions out for the International Monetary Fund though, 0:10:02.360 --> 0:10:05.240 as we see a number of emerging market in developing 0:10:05.280 --> 0:10:09.360 countries in considerable currency and financial difficulties as a result 0:10:09.400 --> 0:10:12.000 of their high and energy prices and the rising food 0:10:12.040 --> 0:10:14.720 prices that have come with them. I think the situation 0:10:14.760 --> 0:10:19.720 in Sri Lanka and Tunisia and Practkistan as particularly troubling. Here. 0:10:20.400 --> 0:10:23.680 As soon as we get into this minefield, so to speak, 0:10:23.760 --> 0:10:27.240 we've got the question of like, well, what kind of 0:10:27.760 --> 0:10:32.000 international financial credit can be provided to countries and what 0:10:32.080 --> 0:10:35.679 kind of political conditions come with that, And even if 0:10:35.720 --> 0:10:37.840 the i m F is in a position to provide 0:10:37.880 --> 0:10:41.280 loans with tolerable conditions to the governments in these countries. 0:10:41.559 --> 0:10:43.920 Is we've seen over the last really since i'd say 0:10:43.920 --> 0:10:46.520 the two thousand and seven eight financial crash. How in 0:10:46.600 --> 0:10:48.880 some ways the lender that really matters in the world 0:10:49.120 --> 0:10:52.480 isn't actually the IMF, but it's the Federal Reserve Board 0:10:52.559 --> 0:10:55.000 essentially as an international lender of last resort. And one 0:10:55.040 --> 0:10:58.040 of the countries that's been in considerable financial difficulty in 0:10:58.080 --> 0:11:00.640 this respect for some time now is Turkey. Turkey is 0:11:00.679 --> 0:11:04.640 obviously pretty gear politically significant in this war. Turkey doesn't 0:11:04.640 --> 0:11:08.320 have to swap blind to the Federal Reserve Board. So 0:11:08.440 --> 0:11:11.720 I think that the really hard question is not particularly 0:11:11.760 --> 0:11:13.679 perhaps a question of dealing with the country like Sri Lanka, 0:11:13.760 --> 0:11:16.280 but the question of dealing with the country like Turkey, 0:11:16.400 --> 0:11:18.840 is in something been taken out of the remit of 0:11:18.880 --> 0:11:22.000 the international financial institutions, or at least that that's not 0:11:22.000 --> 0:11:25.080 where the decisive action is. Yeah, I'm glad you mentioned 0:11:25.080 --> 0:11:28.720 Turkey obviously experiencing runaway inflation in Egypt another one, you know, 0:11:28.760 --> 0:11:32.680 West Africa not getting food aid, and droughts staring places 0:11:32.679 --> 0:11:34.679 like Somalia in the face. I mean, it seems like 0:11:34.720 --> 0:11:38.000 we might be in for a period of extraordinary human 0:11:38.040 --> 0:11:41.040 suffering that was exacerbated by Russia's war in Ukraine, but 0:11:41.120 --> 0:11:45.000 not necessarily caused by it. Anxieties that are under a 0:11:45.120 --> 0:11:49.560 lying many relationships, even multilateral institutions and their members seem 0:11:49.640 --> 0:11:52.880 to be coming to the surface. What reckonings need to happen? 0:11:53.000 --> 0:11:55.360 Helen Well, I think that in the European Union and 0:11:55.440 --> 0:11:58.680 reckoning has really already happened, because quite simply, the view 0:11:58.720 --> 0:12:01.080 and warsaw is triumphed over the view of Berlin and 0:12:01.160 --> 0:12:03.520 Paris during the course of this. More that isn't to 0:12:03.600 --> 0:12:06.079 say that the politicians in the German government will now 0:12:06.080 --> 0:12:08.800 do exactly want the polls of the Latvians, etcetera, and 0:12:08.840 --> 0:12:10.920 want them to do in terms of providing support for 0:12:11.200 --> 0:12:14.920 Ukraine have the kind desired by the Ukrainian government. But 0:12:15.200 --> 0:12:18.320 it does mean I think that the assumption of German 0:12:18.760 --> 0:12:21.280 foreign policy going back to the so going back to 0:12:21.280 --> 0:12:23.920 the Soviet period has really shattered. Now. I think that 0:12:24.040 --> 0:12:27.600 Duran politicians might want to try and reconstruct it, but 0:12:27.640 --> 0:12:30.080 I think they're going to find it extraordinarily difficult to 0:12:30.120 --> 0:12:33.599 go back to the idea that economic interdependence with the 0:12:33.679 --> 0:12:38.760 Russians and constraining force on Russian behavior, And they are 0:12:38.800 --> 0:12:41.760 going to have to take the problems of the security 0:12:41.880 --> 0:12:44.520 of the independent states that sit between Germany and Russia 0:12:44.920 --> 0:12:48.000 much more seriously than they've done since that coal I 0:12:48.000 --> 0:12:51.240 think in terms of erecting more generally, I think partly 0:12:51.280 --> 0:12:54.560 what is going on is a realization amongst Western governments, 0:12:54.559 --> 0:12:58.319 perhaps in particular, that the issue of energy and climate 0:12:58.400 --> 0:13:00.920 can't really be thought of in buying in terms. We 0:13:01.000 --> 0:13:03.280 can't be in a position where we're only serious about 0:13:03.400 --> 0:13:05.680 climate if we're not taking any notice of what's going 0:13:05.720 --> 0:13:08.240 on with the problems of fossil fuel energy. And I 0:13:08.280 --> 0:13:10.160 think you can see this in the moves that Biden 0:13:10.480 --> 0:13:14.080 has made, is that Biden came in wanted to prioritize 0:13:14.320 --> 0:13:17.360 climate hope that oil supply and oil prices could take 0:13:17.360 --> 0:13:21.480 care of themselves. It isn't possible for governments to try 0:13:21.480 --> 0:13:25.280 to demonstrate their climate credibility by disengaging from the issue 0:13:25.320 --> 0:13:28.480 of having a fossil fuel energy strategy. That isn't because 0:13:28.559 --> 0:13:30.640 we don't need to move away from fossil fuel energy, 0:13:30.679 --> 0:13:33.440 but given that we can't do that with any alacrity, 0:13:33.600 --> 0:13:35.760 fossil fuel energy supplies are not going to take care 0:13:35.760 --> 0:13:38.080 of themselves in the immediate present, and the only way 0:13:38.080 --> 0:13:41.080 in which the pressures on them right now is reduced 0:13:41.160 --> 0:13:45.040 is by considering reduced energy consumption. Listeners a reminder do 0:13:45.160 --> 0:13:48.800 get in touch. As always, comments and opinions welcome. I'm 0:13:48.800 --> 0:13:51.720 Ad Vanney Quinn on Twitter or just email vequin at 0:13:51.720 --> 0:13:54.120 Bloomberg dot net. Helen, I want to talk a little 0:13:54.120 --> 0:13:56.920 more about China's rise. Yet another global shift that you 0:13:57.000 --> 0:13:59.960 point out is very nuanced. In the last twelve mare 0:14:00.120 --> 0:14:03.000 in particular, we're really starting to see chinks in China's 0:14:03.080 --> 0:14:05.840 armor in terms of its growth and COVID strategies, market 0:14:05.840 --> 0:14:08.600 turbulens too, and developer of falls and on and on. 0:14:09.120 --> 0:14:11.720 Is China going to be the formidable foe that we've 0:14:11.760 --> 0:14:15.240 been suspecting it might be? Yeah, this is an interesting question. 0:14:15.480 --> 0:14:18.120 I mean, I think that actually the two thousands and 0:14:18.240 --> 0:14:24.680 tens showed that China pulled in contradictory directions when it 0:14:24.760 --> 0:14:27.920 came to the question of whether it was arise in power. 0:14:28.200 --> 0:14:30.840 So obviously, if we looked at it in terms of 0:14:31.080 --> 0:14:35.240 GDP growth, then China has grew through the two thousands 0:14:35.240 --> 0:14:40.240 and tens quicker than the Western economies, and particularly by 0:14:40.280 --> 0:14:44.200 two thousands seventeen. Really, I think everybody understood that in 0:14:44.320 --> 0:14:46.600 order for Western economies to grow, for the rest of 0:14:46.600 --> 0:14:49.440 the world economy to grow, China needed to grow globally 0:14:49.440 --> 0:14:52.320 synchronized growth. I think the imf cause of the synchronicity, 0:14:52.360 --> 0:14:54.560 if we liked, was China. But on the other hand, 0:14:54.600 --> 0:14:58.160 I think that China had some clear economic difficulties in 0:14:58.160 --> 0:15:00.320 the two thousands and tens that weren't there for it 0:15:00.360 --> 0:15:03.280 in the two thousand's. A point in particular to the 0:15:03.480 --> 0:15:07.000 China's two thousand and fifteen sixteen financial crisis, and when 0:15:07.000 --> 0:15:10.320 it faced a serious outflow of capital, when the implications 0:15:10.320 --> 0:15:13.760 of the federal reserves plans to start raising interest rates 0:15:14.120 --> 0:15:17.240 in the latter part of two thousand and fifteen became clear, 0:15:17.600 --> 0:15:21.800 China I think, acquired a significantly greater vulnerability to the 0:15:21.840 --> 0:15:24.600 dollar and to dollar debt during the two thousand and 0:15:24.640 --> 0:15:27.120 ten compared to what it had had in the in 0:15:27.160 --> 0:15:30.440 the two thousand's, and that also made the push that 0:15:30.560 --> 0:15:34.320 China had engaged into internationalize its currency there and men 0:15:34.400 --> 0:15:37.600 be really impossible to pull off. It led to a 0:15:37.640 --> 0:15:41.359 fall away in investment to a number of European countries. 0:15:42.000 --> 0:15:46.000 It became difficult, I think for people to see that 0:15:46.280 --> 0:15:50.080 China could move up leagues, so to speak, financially, if 0:15:50.120 --> 0:15:53.120 it had a currency that was still subject to such 0:15:53.160 --> 0:15:57.720 strict capital controls. And now China is in this difficult 0:15:57.720 --> 0:16:01.720 position in regard to COVID. Clearly the Chinese vaccine is 0:16:01.760 --> 0:16:05.520 not as effective as Western vaccines, that take up has 0:16:05.560 --> 0:16:08.480 not been great. They're now obviously in a position where 0:16:08.480 --> 0:16:10.920 they've decided that the only way that they can deal 0:16:11.040 --> 0:16:13.640 with this outbreak however severe or not it turns out 0:16:13.880 --> 0:16:16.720 to be. It is with these lockdowns, and locking down 0:16:16.760 --> 0:16:20.800 Shanghai is obviously a very very different proposition. This clearly 0:16:20.840 --> 0:16:24.720 has profound consequences for China, but it also has profound 0:16:24.720 --> 0:16:26.480 consequences for the rest of the world in terms of 0:16:26.480 --> 0:16:29.080 the way in which China's weakness then moves itself around 0:16:29.080 --> 0:16:32.240 the world because the importance of China to international trade. 0:16:32.760 --> 0:16:35.880 So I think that what's true about the world, and 0:16:35.960 --> 0:16:38.320 has been true since some point in the two thousand 0:16:38.400 --> 0:16:40.200 and tens, is that the rest of the world is 0:16:40.240 --> 0:16:43.200 now as much exposed to China's weakness as it is 0:16:43.240 --> 0:16:46.600 to China's strengths. And in terms of capital flows and 0:16:46.640 --> 0:16:49.120 so on, I mean that the momentum had been towards 0:16:49.280 --> 0:16:52.200 increased too easier capital flows from China to the rest 0:16:52.200 --> 0:16:54.520 of the world and vice versa capital market openness. Are 0:16:54.520 --> 0:16:56.360 we coming to the end of that area? You think, Helen, 0:16:56.560 --> 0:16:58.440 it's very striking the way in which the Wall Street 0:16:58.440 --> 0:17:01.920 films have been very key to move into China over 0:17:01.960 --> 0:17:04.520 the last thirteen months. And I think that one of 0:17:04.560 --> 0:17:06.040 the things that I actually spent quite a bit of 0:17:06.119 --> 0:17:07.840 time on in the book that looked like it was 0:17:07.840 --> 0:17:10.480 going to be consequential, which was the breakdown really of 0:17:10.560 --> 0:17:14.399 Hong Kong's position as a kind of portal between the 0:17:14.440 --> 0:17:18.119 Western China and financially looks like it's less significant than 0:17:18.119 --> 0:17:20.600 I thought that it that it might be that the 0:17:20.680 --> 0:17:23.200 tightening up in Hong Kong hasn't led to a sort 0:17:23.200 --> 0:17:26.080 of a greater financial separation between China and the rest 0:17:26.080 --> 0:17:29.719 of the world. Yeah, so the fact that the financial 0:17:29.880 --> 0:17:34.720 interdependence is deepened is really both quite striking and how 0:17:34.760 --> 0:17:37.880 it plays out in terms of the decoupling on the 0:17:37.920 --> 0:17:40.480 trade and technology side, which doesn't look to me that 0:17:40.560 --> 0:17:43.359 it's gone away. Before we even get onto the sense 0:17:43.440 --> 0:17:46.680 of green energy competition. This is going to be really 0:17:46.720 --> 0:17:51.320 interesting to watch how these competing dynamics interact with each other. 0:17:51.600 --> 0:17:54.280 There's a lot of handwringing about small d democracy, you know, 0:17:54.359 --> 0:17:58.000 you talk a lot about representative democracy and about neoliberalism 0:17:58.040 --> 0:18:00.679 and the death of the Anglo American model. What happens 0:18:00.680 --> 0:18:04.560 in the next electoral cycle, Well, I mean, I think 0:18:04.600 --> 0:18:06.440 the United States is in for another tough at least 0:18:06.480 --> 0:18:10.520 presidential election in two thousand and twenty four, because it's 0:18:10.560 --> 0:18:14.639 difficult to see how the Democrats go into it in 0:18:14.680 --> 0:18:18.080 any kind of good shape. I'm not saying it's particularly 0:18:18.080 --> 0:18:22.480 Biden's fault, but Biden has ended up having to deal 0:18:22.600 --> 0:18:25.480 with a set of really, really hard problems of the 0:18:25.560 --> 0:18:27.560 kind that we were just talking about in the first 0:18:27.600 --> 0:18:31.639 part of our conversation, particularly about energy. And if you 0:18:31.680 --> 0:18:35.200 look at the history since the nineteen seventies of American 0:18:35.440 --> 0:18:39.560 presidential approval ratings and oil prices, they quite strongly correlate. 0:18:40.040 --> 0:18:45.160 At times they extraordinarily strongly correlate. So it's very difficult, 0:18:45.200 --> 0:18:48.399 I think, to see how Biden would get reelected, assuming 0:18:48.440 --> 0:18:51.679 he does want to run again. But at the same time, 0:18:51.920 --> 0:18:56.920 you clearly have some pretty profound divisions within the Republican Party, 0:18:57.440 --> 0:19:02.400 and how actually there can be an election that doesn't 0:19:02.440 --> 0:19:06.040 bring this issue of losers consent back into play again. 0:19:06.280 --> 0:19:09.399 I find that quite difficult to see. And if we 0:19:09.480 --> 0:19:13.240 move to the mid terms, then clearly, if the Democrats 0:19:13.240 --> 0:19:15.800 were to lose the mid terms quite badly, which seems 0:19:15.920 --> 0:19:20.200 looking from here quite possible, then that makes things very 0:19:20.280 --> 0:19:23.920 legislatively difficult for Biden in the second half of his presidency, 0:19:23.960 --> 0:19:27.359 which kind of creates more impast politics, which again I 0:19:27.400 --> 0:19:31.200 don't think there's anything to help the strains on democracy. 0:19:31.320 --> 0:19:34.240 How are the deep structural forces that you've been explaining 0:19:34.359 --> 0:19:37.320 that are at work in the international economy interacting with 0:19:37.400 --> 0:19:40.040 political contingency. So I guess previously I would have said 0:19:40.119 --> 0:19:43.560 things like Brexit from selection, but now it's Biden's low 0:19:43.640 --> 0:19:46.240 polling the outlook for the midterms. Yeah, I mean, I 0:19:46.280 --> 0:19:48.199 think that what we can see, like through the two 0:19:48.280 --> 0:19:50.920 thousand and tens was that things that look like they've 0:19:50.960 --> 0:19:53.200 got nothing to do with each other, I that look 0:19:53.320 --> 0:19:56.800 quite contingent on something quite specific to a country's politics 0:19:56.920 --> 0:20:00.880 actually can be linked to these changing struct from forces, 0:20:00.960 --> 0:20:02.760 And that's one of the reasons why I wanted to 0:20:02.760 --> 0:20:04.639 write the book in the way in which I did so. 0:20:05.040 --> 0:20:07.680 You wouldn't think on the surface, for example, that Brexit 0:20:07.720 --> 0:20:10.400 referendum and the difficulties that David Cameron, the British Prime 0:20:10.400 --> 0:20:13.159 Minister had him winning that referendum, had got anything to 0:20:13.160 --> 0:20:15.560 do with high oil prices in two thousand and eleven. 0:20:16.040 --> 0:20:19.280 But I think that there was a relationship because of 0:20:19.280 --> 0:20:22.240 the difficulties that those high oil prices caused for the 0:20:22.280 --> 0:20:26.679 European Central Bank in responding to high oil prices by 0:20:26.800 --> 0:20:29.399 raising interest rates twice. In two thousand and eleven, the 0:20:29.400 --> 0:20:32.760 Eurozone got pushed back into recession that made for a 0:20:32.760 --> 0:20:37.240 macroeconomic divergence with the UK economy, led to an increase 0:20:37.280 --> 0:20:40.560 in migration that produced something of a political reaction in 0:20:40.600 --> 0:20:43.480 the United Kingdom that spurred the rise of the United 0:20:43.560 --> 0:20:47.520 Kingdom Independence Party wanting a referendum money you membership. That 0:20:47.640 --> 0:20:50.480 was part of the story in which Camera not necessarily 0:20:50.520 --> 0:20:52.920 came to the decision in the first place in two 0:20:52.960 --> 0:20:55.919 thousand adverting to hold a referendum, but the way he 0:20:56.000 --> 0:20:59.880 tried to renegotiate the terms of UK membership before whole 0:21:00.000 --> 0:21:02.760 in the referendum I think was very much influenced by 0:21:02.800 --> 0:21:05.600 the rise of UKIP. So things in one sense that 0:21:05.640 --> 0:21:10.679 look contingent actually I think had considerably more structural forces 0:21:10.720 --> 0:21:14.360 behind them. The pandemics an interesting example, because in lots 0:21:14.359 --> 0:21:16.560 of ways it was a contingency. But I think that 0:21:16.560 --> 0:21:19.520 the denialist would say that actually there were some reasons 0:21:19.560 --> 0:21:22.800 to think that the nature of the global economy, particularly 0:21:22.800 --> 0:21:25.679 the way in which global air transport were actually acted 0:21:25.720 --> 0:21:29.440 as a rather rapid carrier. I think that the thing 0:21:29.440 --> 0:21:31.959 about elections, we didn't see it in the French election 0:21:32.080 --> 0:21:34.199 is is that sometimes that they can be, you know, 0:21:34.280 --> 0:21:37.199 like incredibly close. And I think we saw that to 0:21:37.320 --> 0:21:40.560 some extent in both the last two US presidential elections, 0:21:40.600 --> 0:21:43.520 where the margins and individual states that were decisive didn't 0:21:43.520 --> 0:21:45.720 turn out to be very large at all. It doesn't 0:21:45.720 --> 0:21:48.840 take much to imagine either of those elections, particularly perhaps 0:21:48.880 --> 0:21:51.359 the first one when Trump was elected, going the other way, 0:21:51.800 --> 0:21:54.320 and then much of what happened in the second half 0:21:54.359 --> 0:21:56.480 of the two thousand tents might have been different. I mean, 0:21:56.800 --> 0:21:59.119