What Is Fueling Our Century’s Global “Disorder”?

What Is Fueling Our Century’s Global “Disorder”?

What Is Fueling Our Century’s Global “Disorder”?

A conversation with historian Helen Thompson about the changes in energy consumption and monetary policy that set the table for today’s geopolitical instability.


Much has been written about the political disruptions of the last decade, one marked by Brexit, Donald Trump’s election, and the rise of China. Despite the global forces at play, the standard explanations for the rise of populist nationalism and a growing authoritarianism typically cast blame on a handful of causes. One school of thought sees them as a reaction to the 2008 economic crash, which led to the breakdown of the purported liberal international order. Others place the blame on a dysfunctional system of political representation in which the elites have shown themselves to be too out-of-touch and disconnected from “the people.” Still others believe that today’s liberals have failed to prioritize the real reason behind liberalism’s decline: the illiberal enemies undermining and destroying it. Yet in her new book, Disorder: Hard Times in the 21st Century, Helen Thompson, a professor of political economy at Cambridge University, argues that these views are too simplistic and ahistorical for understanding the complexities of today’s new political realities.

If we want a comprehensive explanation for the last decade’s disruptions, Thompson asserts, we need to examine the large-scale societal shifts—such as how the world produces and consumes energy—that are causing the international political system to be recast. Taking the global energy economy as its starting point, Thompson’s book seeks to explain how changing geopolitical dynamics in the fossil fuel industry have destabilized the economic and political systems of Western nations. Thompson argues that, even as the United States became the world’s largest oil and gas producer, its debacles in Afghanistan, Iraq, and Syria prevented it from securing the stability of the energy-rich Middle East. From this emerged a global energy rivalry between the United States, Russia, and China (which, although dependent on Middle East oil, is nevertheless leading in the ascendant green energy revolution). Making matters more complicated is Western Europe’s dependence on Russia for gas and the strategic role that Ukraine plays as an intermediary between the two.

This geopolitical instability, Thompson shows, is connected with substantial changes in international monetary policy, which she traces back to the breakdown of the Bretton Woods system in the 1970s, which saw the rise of internationalized banking tied to energy trading. This remade the world economy along fragile fault lines that proved all too vulnerable to the vicissitudes of market forces. It is the unstable structure of the resulting geopolitical and international economic system, Thompson argues, that has precipitated the crisis of democracy in the nations of the West. Her conclusion is decisive: “As oil became both essential for daily life and dependent on international capital markets, Western governments grew more focused on the consent of plutocrats than their own citizens.” In this manner, Thompson is able to provide a multilayered explanation for the destructive economic forces that have undermined liberal democracy and given rise to a populist, nationalist backlash across the globe.

The Nation spoke with Thompson about her work on the history of energy, Bretton Woods and the 1970s, and today’s crisis of democracy. This conversation has been edited for length and clarity.

—Daniel Steinmetz-Jenkins

Daniel Steinmetz-Jenkins: There are many ways of narrating the political crises Western democracies have faced since the 2008 financial crisis, and especially on account of Brexit and Trump’s election in 2016. Some point to the breakdown of the liberal international order, as demonstrated by the rise of China, as well as populist strongmen in the world writ large—Putin, Erdoğan, Modi, Orbán, and so on. Others take aim at the growth of nativism and even so-called fascism within American and European societies. You are not convinced by these explanations. Why is this the case?

Helen Thompson: I think there are several issues with the conventional explanations of the political crises since the 2008 crash as they pertain both to individual democracies and to the supposedly liberal international order. The populism thesis bundles together Brexit, Trump, the rise of La Lega in Italy, the Front National in France, and Orbán in Hungary, as well as sometimes Modi in India and Bolsonaro in Brazil. Some of these political phenomena seem to me to be quite different: Notably, Brexit and Donald Trump’s election did not have common origins. Democratic consent to the treaties that constitute membership in the European Union was fraying in Britain for more than a decade before David Cameron decided to hold the referendum in 2016. Meanwhile, Britain stood outside the EU’s monetary union, meaning its political influence inside the EU was declining and the costs of exit, which were considerable, were comparatively much lower than for the eurozone states. At some point there was likely to be a reckoning, even if the question of what to do about these problems could plausibly have been resolved in the short to medium term by an answer other than secession. By contrast, Donald Trump won a one-off election as the candidate of a party that might reasonably have been expected—given the Republicans’ general performance in the electoral cycles since 2008—to win the 2016 presidential election. Obviously, we still need an explanation as to why someone who had never run for office before was able to win the Republican nomination, despite having scarcely any organizational capacity or spending much money. But the reason Trump succeeded has nothing to do with the problems generated for an EU member state by its constitutional history and its half-in/half-out position in a supranational union.

At the macro level—by which I mean the temporal framing of the political crises of the last decade—I think starting with a big juncture in 2008 is, in part, misleading. This is not to deny that the Lehman Brothers bankruptcy was a watershed moment; it was. But the serious structural fault lines—geopolitically, around Western economies, and for the EU—were all pretty much evident by 2005. By then, it was clear that neither China nor Russia would be integrated into an American-led international order on American terms. It was also very evident that the EU was ill-equipped to deal with the range of issues that both Russia and Turkey cause for it as border states.

DSJ: One way to broach your perspective is to place it in the context of a different crisis of democracy—one that emerged in the 1970s in Europe and the United States. This period witnessed the end of the Bretton Woods system, the United States losing the Vietnam War, increased domestic terrorism, an oil embargo imposed by OPEC that triggered a global energy crisis, and a major economic recession. Can you explain how these intersecting crises in the 1970s gave rise to the constellation of new geopolitical forces that form the backdrop for understanding today’s crisis?

HT: I do think the 1970s were a crucial decade. However, I am wary about conceptualizing the big story of the 1970s through the lens of a democratic crisis. The idea that the Trilateral Commission, in its report The Crisis of Democracy, propagated—that democracy was destroying itself through its majoritarian dynamics—is wrong. The crucial difficulties in the 1970s had geopolitical origins in the energy sphere and the final breakdown of the financially restrictive Bretton Woods monetary order. These changes, which were connected through structural changes to the American economy, then had profound consequences for Western democracies, as they did for a good number of developing countries. The world in which the Soviet Union became the world’s largest oil producer, in which Saudi Arabia could effectively set the international price for oil through OPEC, and in which most oil production was controlled by state-owned companies and not the Western “Seven Sisters”—as they were then called—would be radically different than the one that prevailed for most of the first three decades after the Second World War.

Since I finished Disorder, I have been reflecting on how to situate China’s turn under Deng Xiaoping in 1978 into that geopolitical story of the decade. Deng’s economic reforms took place under the shadow of the energy turbulence. His problem was how China could decisively industrialize after Mao’s failure, under conditions where it was clear that all the industrial economies faced long-term energy security problems. Perhaps we should understand China’s brutally coercive one-child policy that Deng imposed in this context: To develop, China had to increase its per capita energy consumption, and a fall in China’s birth rate would lessen the scale of that task. But the structural shifts in the 1970s were also an opportunity for Deng, as the financial side of the world economy became more liberal. A world in which capital could flow so easily across state borders was one where China, with its vast potential market, could become a magnet for foreign capital. In time, this openness would facilitate not just direct investment by multinational corporations in China but the transfer of a considerable volume of manufacturing production to China, with the accompanying job losses in Western economies—and in the United States in particular—a democratic fallout.

DSJ: I’m intrigued by your discussion of “democratic excess” versus “aristocratic excess.” For instance, you are critical of commentators of the 1970s, such as Samuel Huntington and Daniel Bell, who blamed the crisis of the 1970s on the democratic excesses of overindulgent Western societies. As you point out, such pundits made a direct connection between the great inflation of the 1970s and the majoritarian dynamics of democracies. You show, however, that while the political elites of the center-right and center-left blamed inflation on citizens, they regularly ignored the role that oil and international finance played in contributing to inflation. Moreover, such aristocratic excess, you argue, emboldened an economy that made nation-states and their citizens dependent on the whims of international financial markets. Can you elaborate on the notions of aristocratic excess and democratic excess? Can they, for instance, be mapped onto current concerns about inflation under the Biden administration?

HT: I took the idea of democratic and aristocratic excess from Polybius, the Greek historian writing in the second century BCE about the rise of the Roman Republic. He thought that regardless of their external vulnerability, all states were subject to internal decay, and that this decay produced a sequence of change between forms of government: In the beginning there is chaos, then monarchy, kingship, tyranny, aristocracy, oligarchy, democracy, and finally the mob rule of ochlocracy, before out of the chaos a single demagogue claims power and the cycle starts again.

Although this thesis does have some explanatory power for the fall of the Roman Republic that Polybius foresaw, it doesn’t stand up to scrutiny as a long historical generalization. But I was quite taken with his notion that each form of government is destroyed by its own excess, generated from within itself by its own inherent and particular vice. While we are not accustomed to thinking about democracy in this way, I think we can see this phenomenon quite clearly when we reflect upon the end of various European monarchical regimes—take the ancien régime in France or Czarist Russia. The question then becomes whether we should treat modern democracy as somehow immune to the problem. Now, obviously, many people would argue that it is, following Tocqueville in treating democracy as ultimately irreversible, at least at a certain level of economic development. But I start off as a skeptic on providential claims about democracy.

Then, observing the American presidential election of 2016 from this side of the Atlantic, there seemed to me some parallels with some of the political dynamics around excess in the late Roman Republic. I saw Trump as an insider/outsider member of what might be thought of as the American oligarchic class using others’ class grievances—including about the place of money in democratic politics—to win an electoral contest for power where he was, in part at least, pitting himself against other members of his own class. This—both Trump’s behavior and the political conditions in which he could succeed in these terms—seemed to me the politics of aristocratic excess.

Of course, there is much more to say about Trump than this frame of reference yields, not least his crude nativism. But if we consider the history of American democracy, then what look like periods of aristocratic excess, such as the Gilded Age, eventually produce both sharp class politics and ugly nativist politics as part of the same reaction. What made Trump different from the American Populists was that he did not belong to the class whose grievances he was politically using. The rancor was a weapon in a competition for power marked by personal ambition.

As for Biden and inflation, I think there are some parallels with the 1970s, including the risk of misdiagnosing the problem. The Trilateral Commission report ultimately justified the later attempt in the 1980s and 1990s to depoliticize monetary policy by letting central banks determine interest rates according to a narrow imperative of price stability. But the core inflationary problem arose from the energy price shocks. Now, as fears about rising prices return, it is primarily energy prices that are once again fueling general inflation—it is neither excessive wage demands nor the $1.9 trillion Covid relief package Biden passed last year.

DSJ: Regarding former president Barack Obama, you state the following: “Obama was more a symbol of the aspiration for political change than an agent of it…. But there was little if anything in his economic policy that distinguished him from his primary Democratic opponents.” You then go on to say that Obama raised massive sums from Wall Street. In other words, Obama was in keeping with the aristocratic excesses that emerged in the 1970s. This seems to suggest that the backlash to Obama’s presidency was decades in the making and rooted not principally in a racist backlash, but in class politics driven by long-standing anger at aristocratic excesses. Is this your view?

HT: I always found Obama an interesting phenomenon. I never drank the Kool-Aid; it seemed to me obvious back in 2008 that there was rather a dissonance between his rhetoric that “we are the change we have been waiting for” and the volume of money he took from Wall Street. He was skilled at using the language of democratic renewal and his biographical narrative to make himself a symbol of national regeneration. But I think in domestic policy terms, he was just another Democrat doing things within the script Bill Clinton had established for the party. His substantive credentials came from his opposition to the Iraq War, and he was fortunate that he was not in the Senate when the vote to authorize that war took place.

Obviously, there was a racist backlash against him during his presidency—I would not want to underplay that. But I don’t think that it is the only factor that explains what was, until Trump came along, the significant deterioration in his popularity. Domestically, he was a status quo president. He did not get to grips with the mortgage foreclosure crisis, and, although this was certainly not his fault, he presided over an economy that could not get back to 3 percent growth and where [the Federal Reserve policy of] quantitative easing increased wealth inequality. He was also largely unresponsive to the class politics of trade, especially with China. What was interesting about the 2016 Democratic nomination contest was how Bernie Sanders moved into the class space that Hillary Clinton had tried to use against Obama in 2008—and Clinton in 2016 was left in the Obama position, without his advantages.

DSJ: How does your story here differ from critics of neoliberalism, who also point to the 1970s in order to understand the 2008 financial crisis, growing inequality, and today’s general crisis of democracy?

HT: I have never been that comfortable with the term “neoliberalism.” Initially, it was most frequently deployed by those who saw the 1970s and early 1980s as a time of ideological turbulence in which the right’s ideas about the relative merits of markets and the state won, most consequentially in Britain and the United States. Later it risked becoming a catch-all term to describe whatever policies, ideologically driven or not, were pursued by the British and American governments.

Generally, I think the problem with the neoliberalism thesis is that its proponents largely downplay the material causes of the 1970s crises. The United States was the world’s largest oil consumer, and it could no longer produce enough oil to meet domestic demand. To import oil from abroad and run an oil-driven trade deficit, it needed foreign creditors, and that necessitated a move to opening international financial markets. In adjusting to this economic reality and the new power of OPEC to set prices and control international supply, Richard Nixon introduced substantial controls on the price, production, and distribution of domestically produced energy. It was primarily in reaction to these controls that the deregulation agenda took shape. Meg Jacobs’s book Panic at the Pump is eye-opening on this subject. This is not to suggest that there was no intellectual genealogy to certain economic policy ideas that are called “neoliberal” and were influential from the 1970s, especially in a number of international institutions and the EU. Of course there was, and Quinn Slobodian’s Globalists: The End of Empire and the Birth of Neoliberalism has done an excellent job of tracing that history. But we cannot understand either why the 1970s were such a historical juncture or the choices Western governments made in the 1980s about economic policy without seriously engaging with the trajectory of the world’s most significant energy source through that time period.

DSJ: I’m intrigued by your claim that the humanitarian tragedy in Syria was even more disruptive than the Iraq War. Can you explain your reasoning here, especially as it relates to new interstate rivalries and the challenges facing NATO?

HT: The Syrian civil war was one of the big disruptive events of the last decade. It connects a lot of the fault lines. Obviously, in Syria itself it was a humanitarian catastrophe. On top of the half a million people who were killed, about half of the country’s prewar population was either internally displaced or became refugees. Geopolitically, the Syrian war badly divided NATO in ways that ultimately have had more lasting consequences than the second Iraq War. Eight years after the Iraq War, the United States and Britain fought a war with France—one of the big opponents of the intervention against Saddam Hussein—in Libya. But in Syria, Obama made it clear that he saw this as a turning point in American foreign policy. He wanted to be what he called a “Pacific president,” and that meant trying to treat the Middle East as a European neighborhood and not a shared American-European one. That commitment was his stated rationale for pulling back at the last moment from his planned airstrikes against the Assad regime in September 2013 after the Ghouta chemical attack. Then, a year later, the rise of ISIS and a caliphate with a core in Syria and Iraq led the United States and some European NATO states to begin another Middle Eastern war. Yet the American-led military effort was also constrained and pretty ineffective. In frustration, the French began their own independent military action against ISIS in Iraq. In September 2015, Russia militarily entered Syria, something Moscow had never contemplated in Iraq. Putin’s move made matters much more difficult for the Obama administration, because it meant both American and Russian planes were operating in Syrian airspace. Until the autumn of 2016, Obama was looking to find an accommodation with Russia; at one point, Washington and Moscow planned joint airstrikes against ISIS. The war against ISIS also heaped pressure on the US-Turkey relationship, especially over Washington’s use of the YPG—the People’s Protection Units—to do the ground fighting, since Turkey considers the YPG a terrorist organization. In 2018, Turkish troops began an operation in Syria to push the YPG back, which infuriated the French. By 2019, Emmanuel Macron was publicly questioning Turkey’s membership in NATO. Indeed, he complained that “we are currently experiencing the brain death of NATO,” and the foundation of his judgment was what was happening in Syria.

DSJ: Is it correct to assume that you believe the move to green energy will play the primary role in accelerating a cold war with China?

HT: I am not sure whether it is primary or not. There is a lot already in play, especially given the rise of China’s navy and high-tech manufacturing competition in defense areas. I also think fossil fuel energy questions have long caused tensions in the US-China relationship, especially on the Chinese side.

Nonetheless, the move to green energy is very much a part of the present geopolitical competition between the United States and China. I think there is a fear in Washington that, in the same way the age of oil geopolitically belonged to the United States and to some degree the Soviet Union, the age of green energy will belong to China, not least because of China’s dominance in the metals on which non-carbon energy production depends.

But to my mind, the present geopolitics of energy is rather more complicated than that narrative suggests, because we have actually entered a multi-energy-source age in which nobody can have any real idea about how fast oil and gas consumption will fall, or indeed whether it actually will. Meanwhile, leaving aside the climate crisis, oil and gas production on its own terms is pretty dysfunctional. A world in which China is the largest importer of oil and takes a significant amount of that oil from the Middle East, while the United States Navy provides security for shipping through the Persian Gulf, is a geopolitically complex one. If the United States either makes more rapid progress than China in reducing oil consumption or, fearing it cannot, doubles down on shale oil for the medium term, then the question arises whether it will be politically tenable domestically for the United States to keep providing energy security to China. But on the other hand, does the United States want China to take naval responsibility for its own energy security, or to move ahead with building a pipeline to take oil from the port of Gwadar, just beyond the Persian Gulf, through Pakistan into Xinjiang? These geopolitical fault lines generated by fossil fuel energy since oil production took off in the latter part of the 19th century are not going away, even as green energy will add new ones.

DSJ: I sense a bit of political fatalism in some of your conclusions. Regarding the United States, you argue that the democratic repair that is needed to address its democratic deficiencies is not sufficiently available. “The Republic has not yet found a story about the past,” you write, “that can imaginatively ground the idea of an American people that includes all American citizens.” Regarding the EU, you present it as seemingly doomed to fail, since it is composed of nation-states that are constantly destabilized by geopolitical and economic changes that threaten their future as democracies unless they can adapt to these changes. Finally, in the book’s conclusion, you seem to view much of today’s desire for an energy revolution as utopian, given that the technologies necessary for it either don’t exist or are not sufficient to bring it about. Does anything give you optimism about the future of the West?

HT: In the way the distinction between optimism and pessimism is usually applied to politics, I am on the pessimistic side. I don’t think we, as humanity, or as the citizens of individual states or the EU, can collectively choose whatever future we wish. I think whatever the big political and indeed ethical problems that the whole structure of international finance creates, it would be impossible to dismantle it without a collapse. That does not mean everything around it is a given—but outside that collapse scenario, I don’t believe it can be radically transformed. We live in the world of quantitative easing now, and for the monetary and financial system to function, central banks have to maintain the confidence of international financial markets.

I also think there are limits—bound up with the differing densities of energy sources and the present intermittency of energy supplied by solar and wind—that must be faced around the Net Zero project. I understand the argument for saying that we just need to be optimistic, because optimism is the necessary condition of technological innovation; indeed, I think in some respects that is right. But that optimism should be balanced by realism about energy and a consciousness of what this energy revolution actually entails. Otherwise, the politics of Net Zero will become dangerous because of the time scales: We can’t just pretend a future has arrived that hasn’t. We also need to reflect on what a politics that demands sacrifices in Western countries might look like and what that means in distributional terms, because who consumes how much energy in many ways defines inequality.

What makes me somewhat optimistic about the future is that I think there is much greater awareness of the seriousness of the predicaments we face in Western democracies than there was at the beginning of the 2010s. This includes reflection on the consequences of how we live our individual lives. I am fortunate enough as a teaching academic to meet some extraordinarily impressive young people, and despite the particular burdens placed on their generation, I see an urgency in their hunger to understand the world’s complexities, of a kind that I think was largely lacking in my generation in our youth.

Thank you for reading The Nation!

We hope you enjoyed the story you just read. It’s just one of many examples of incisive, deeply-reported journalism we publish—journalism that shifts the needle on important issues, uncovers malfeasance and corruption, and uplifts voices and perspectives that often go unheard in mainstream media. For nearly 160 years, The Nation has spoken truth to power and shone a light on issues that would otherwise be swept under the rug.

In a critical election year as well as a time of media austerity, independent journalism needs your continued support. The best way to do this is with a recurring donation. This month, we are asking readers like you who value truth and democracy to step up and support The Nation with a monthly contribution. We call these monthly donors Sustainers, a small but mighty group of supporters who ensure our team of writers, editors, and fact-checkers have the resources they need to report on breaking news, investigative feature stories that often take weeks or months to report, and much more.

There’s a lot to talk about in the coming months, from the presidential election and Supreme Court battles to the fight for bodily autonomy. We’ll cover all these issues and more, but this is only made possible with support from sustaining donors. Donate today—any amount you can spare each month is appreciated, even just the price of a cup of coffee.

The Nation does not bow to the interests of a corporate owner or advertisers—we answer only to readers like you who make our work possible. Set up a recurring donation today and ensure we can continue to hold the powerful accountable.

Thank you for your generosity.

Ad Policy