Local oil, global finance, and democracies without citizen-creditors: in conversation with Helen Thompson

In conversation with Vera Šćepanović, Helen Thompson explains how concentrating on energy can reshape our understanding of contemporary history, political economy, and transnational finance; discusses how international relations are simultaneously shaped by zero-sum attitudes and tacit cooperation; asks what it means when representative democracies no longer rely on ‘citizen-creditors’; and reflects on how the profound economic shock triggered by Russia’s invasion of Ukraine might play out across the world.

Helen Thompson is a Professor of Political Economy at Cambridge University. She is well known for her work on the politics of debt and transnational finance, and the geopolitics of energy. Her previous books include Oil and the Western Economic Crisis (Palgrave, 2017), China and the Mortgaging of America(Palgrave, 2010), and Might, Right, Prosperity and Consent: Representative Democracy and the International Economy (Manchester University Press, 2008). Disorder: Hard Times in the 21st Century (Oxford University Press, 2022) is her newest book. She contributes regular columns to the New Statesman and was until recently the co-host of Talking Politics.

Vera Šćepanović is a lecturer in International Relations and European Studies at Leiden University. She co-heads the Political Economy and Inequalities section at the Review of Democracy.

Vera Šćepanović: Disorder is a refreshingly ambitious book, in which you do not shy away from complexity. You are trying to understand how we got here, to this intersection of overlapping crises, and the first challenge is to parse out what this crisis is truly about, to identify the key fault lines and separate the structural from the ephemeral. You do this is by focusing on three major fault lines. The first is the geopolitics of energy, the geopolitical jostling that emerges in the wake of China’s economic rise and the changing competition for energy, especially oil and gas. The second is the complicated politics of transnational finance and debt, in particular the fact that the US dollar remains the reserve currency of the world, while the US itself seems to be losing primacy in some other ways – technological, political, perhaps even military. And the third is the political crisis, and I find your way of describing it especially convincing. We talk a lot about the rise of populism, and the eruption of nationalism, but you argue that there is actually a deeper problem here, a broader, more general erosion of authority of democratic institutions. Is this a fair way to describe what you mean by disorder? Or have the more recent developments changed your appraisal of the key structural issues that are driving the crisis of our times?

Helen Thompson: This is quite a complicated question because, originally, I intended the book to have four parts. I intended to have a full section about the cultural and religious fault lines in Europe in particular. And the framing of that was going to be the rise of civilizational rhetoric in all different ways in which we are seeing it in Russia, Hungary and France, and the way that that mapped on to long-standing issues around the formation of territorial states and empires in Europe. And I think that this is what has happened in Ukraine. Russia’s war in Ukraine, and the way in which Putin in particular thinks about the old Russian empire and its relationship to the idea of Russia as a civilization, has brought territorial borders very much to the fore. So although I think that in my story about geopolitics I’ve got an explanation of how Europe got to this point in its dealing with Russia – i.e. not taking seriously the security needs of the independent states standing between Germany and Russia, plus the European energy dependency on Russia – I don’t think I’ve got an explanation as to why Putin has pursued this kind of war. In some sense, I think I would have had an explanation if I had stuck with my original idea of trying to tell four stories. The reason why I pulled back from the fourth story was because I realized that it was just going to be much more difficult to tie all the different bits together and to pull out the interactive relationships in the way I do now between geopolitics, the economy, and democratic politics. Perhaps it would have been possible, but I think it would have taken me quite a bit longer to write the book. 

I do want to say, though, that we can’t actually understand the disorder in Ukraine without that missing part, because I don’t think that we could explain purely on energy-realist grounds why Putin would order the invasion of Ukraine. I don’t think that to say he did it to secure Ukraine as an energy sphere of influence for Russia and to deal with the Russian pipeline problems is a sufficient explanation at all. 


It is interesting that you say that because the first part of the book deals with energy and it is about how the postwar Western world has been anchored in a particular material structure of dependence on fossil fuels. At the same time, however, you do not claim that energy determines politics. You offer a much more complex retelling of how our political engagements have been structured around access to energy sources. I found this to be very new. In a sense, it is obvious that our civilization runs on fossil fuels. Yet perhaps precisely because it is so fundamental it tends to fade into the background. I think, for example of how we tell the story of our own time, the age of neoliberalism. It starts with a big oil crisis which breaks the postwar social compact and pushes Western states into a different direction of economic and political development. But then, even though our times begin with the oil crisis, the story of oil quickly recedes into the background. 

Now, in your book, you really pull energy back centre stage and in doing so you bring up many connections which I found illuminating. For example, the fact that two of three economic powerhouses in the world – the EU and China – don’t have any domestic sources of oil and gas and are completely dependent on imports, whereas the third one, the US, swings between being an exporter and then importer over time, and how that completely reshapes their international economic connections. You also show how we have been having a secular oil-induced inflation trend for years because of the growing demand in China, but we took little notice of it because China was at the same time reducing inflation by pushing down the prices of manufactured goods. After reading your book I find it very surprising that these connections are not more central in our discussions of international political economy. Did you encounter many such surprises while writing it where you felt that by unearthing these connections between oil and gas and international politics changed the way you thought about the global economy?  

I first started thinking about this seriously in 2013. At that point I was trying to bring oil into the stories that I knew better, which were the monetary and financial stories and particularly the discussion about the financial crisis and the Eurozone crisis. And that was where I started thinking about the relationship between the monetary environment that was created by the crash and the Federal Reserve Board’s response to the crash, and the American shale oil boom. 

I saw that the monetary environment was a necessary condition of the shale oil boom, and that was my real point of entry, because I could see that shale oil mattered. I could see through the thing that I did know something about – the monetary side – that there was a connection between the two. That was my starting place for going down this road of making energy so central to the way I think. 

I was thinking of how to incorporate oil into the book that I then wanted to write about the financial crisis and the Eurozone crisis. The oil part just got bigger and bigger to the point where I realized that I wasn’t going to take a leave from Cambridge as I planned to, and I wasn’t able to write a long book. I wrote instead a short book about oil – Oil and the Western Economic Crisis. Instead of trying to fit oil into other stories I decided to just start there and let the other things come into it.

Later, when I was writing Disorder, I had a big ‘aha!’ moment about the Suez crisis in 1956 when I was writing that second chapter of the geopolitical part of the book. I had written a long essay to myself which was the basis for working out the whole argument initially. Suez was part of that story, but it was only when I was really trying to write that section that it suddenly dawned on me that Suez was actually such a pivotal moment and that there was a story to be told backwards from the 1950s about the relationship between Germany and Russia, in particular where energy was concerned, and a story to be told forwards about how the Russian-European and Russian-German energy relationship followed from that moment on. This is when I decided to make Suez the pivot of my second geopolitical chapter – the more I thought about it, the more sense it made. 

When I then wrote the story about the 2010s, and the Syrian crisis in September 2013, when Obama pulled back from his red line about chemical weapons, I realized there were certain parallels to be drawn at that moment with the Suez crisis in terms of it being a watershed again around Anglo-American-French relations. Seeing that, I was a bit taken aback. Obviously, the danger with this is that you start seeing patterns everywhere, and you have to pull back from that and convince yourself that they really are there and it’s not just that you have become overly sensitive and are seeing patterns even where they don’t actually exist. But I really do think the Suez story is important. 

Particularly as somebody who is British, and who grew up with this idea – and it was there in many ways in which I was taught about the British foreign policy – that Suez is this humiliating moment for Britain, where the British political class has to wake up to its imperial hubris and realize that British imperial power doesn’t matter, couldn’t matter in the middle of the 20th century. I think that’s a completely misleading interpretation of what happened. 

That isn’t to make some moral defense of the British Empire in the Middle East, it is simply to see that British imperial presence in the Middle East was supposed to serve a function for Western Europe’s energy security in the post-Second World War world. And there were in energy terms good reasons for that to be the case. The American position was supposed to be that Britain’s position there was necessary because the Americans did not want to take on that role themselves. So, when it falls apart, the whole assumption on which the post-war Western European economic recovery after the Second World War rests upon is just yanked away. It is not surprising, then, that there are so many consequences that we are still living with now, not least the energy relationship with Russia.

That was indeed the chapter that made me laugh – darkly – because we are now two months into the invasion and there is all this public pressure to break the EU’s dependence on Russian oil and gas, to diversify, to stop funding this war. But reading your book one realizes to what extent this dependence on Russia is in itself the product of previous attempts to break unacceptable dependencies on other ‘unreliable’ parts of the world. In light of the full history of previous realignments, how do you see the situation now? The European Commission has promised to cut dependence on Russia by the end of this year, or at the latest by 2030. How do you see the prospects for that?

I would say several things here. First of all, I think it’s going to be pretty difficult for European countries to reduce radically the dependence on Russian gas in particular. One of the reasons for that is that over the last few years we have been seeing a China gas shock in the way in which there was a China oil shock in the middle of the 2000s. 

China’s demand for natural gas imports rose by 20% in 2021. This means that if the European countries that are particularly dependent on pipelined gas from Russia – obviously, most importantly, Germany – were to move to liquid natural gas over the next few years, there is going to be absolutely intense competition for that supply. 

Unless China quite quickly stops being in the liquid natural gas market for any such exports, except from Russia, and unless a second Siberia pipeline is going to be built rapidly from Russia to China, then that’s the nature of the competition that now exists. 

If we go back to last autumn before the invasion, this competition was already causing both China and other Asian countries as well as European countries very severe difficulties. The price that European countries are paying for gas from the United States is at least ten times higher than the gas that’s being provided domestically in the American market. We see for the first time in December 2021 that, instead of ships carrying liquid natural gas that are supposedly heading for Europe heading off to Asia, because the prices are higher in Asia, it goes the other way around. Because European demand is so high, and prices in Europe are now significantly higher than Asian prices that we’ve got ships that are bound for Asia turning around and going into some European port. This was all before we even get to the Russian invasion of Ukraine and the fact that supposedly the European countries over the next four or five years are going to turn away entirely from Russian gas. 

The other thing that’s really interesting here is that we can see some of the same dynamics in terms of alternatives at play now as we did after the Suez crisis in 1956. 

What were the two big alternatives that were pursued after Suez? The first was nuclear power. We can see again a turn back to nuclear power, but maybe some of the same problems that stopped anyone other than the French, really, pursuing the nuclear power option so systematically will come back into play. It is expensive. The other option, and this one is really interesting, I think, is the French position after Suez, which was to say that where our oil interests are concerned, the future lies with Algeria. The absolute commitment of the then French Government that Algeria was going to be part of the European Economic Community, while still being a French colony, obviously, came from the hope that Algeria would be able to sell its oil and later gas into what would be the European Economic Community’s unified market. That didn’t really work out because the French weren’t able to hold on to that position and Algeria became an independent country, but if we look at the alternatives that are now being talked up on the gas side – one of them is Algeria. 

What is again interesting, though, is that this can’t just be done on European terms, because Algeria is already a big supplier to Spain and Italy, and the Algerian Government is now very unhappy about the position that Spain’s taken on the conflict between Algeria and Morocco over Western Sahara. 

You can get out of one set of problems with Russia, just like you could get out of one set of problems in the Suez, or at least minimize the problems in Suez, but you get yourself into another set of problems.

 The same will be just as true if the answer becomes the East Mediterranean and gas there because that involves really difficult questions about Turkey, and the fact that Turkey has been essentially kept out of the gas projects in the Eastern Mediterranean. It also brings into play Israel as a question for the European Union countries to deal with. 

The nature of the distribution of oil and gas in Eurasia and the places in which it’s concentrated means that there isn’t any way of avoiding geopolitical difficulties. Now I’m not saying that because I think the European Union countries should simply accept gas dependence on Russia. I just think there has to be some realism about what plausible alternatives there are. I know this sounds like a very simple thing to say but I just don’t think it’s always taken on board: you can only import gas from countries where there is gas.

This then raises the question of new energy sources – and I know you have a very realist take on that as well. Another thing that surprised me as I read the book is the story you tell about how the oil rose to primacy very much as a consequence of changes in military technology, and that perhaps in that realm it is even more difficult to make a quick switch than it is in household consumption, for instance. I just recently read an analysis from someone in the US military explaining why they are unable to share some of the weapons with Ukraine, and one of the reasons they cited was the enormous rate of oil consumption of some of these tanks and carriers that would make it nearly impossible to operate them. Of course, we are all very eager, and some of us are perhaps hoping that this conflict would finally push the EU towards more investment in energy transition, but there are serious obstacles in that path. 

I wouldn’t push this analogy too far, but it may not be a coincidence that the resurgence of interest in nuclear power goes hand in hand with things like nuclear power submarines. You can see the importance of that to the Australian government when it came to the AUKUS deal and the contest with France around that last year. But I think that if we look at the domestic economy side of the energy transition, and particularly at electric vehicles, and if we look at the fear that China’s position and relative success in the electric vehicles market has caused in Washington in particular, I think that is because there is an understanding that if your companies are going to dominate in these new markets, that does have geopolitical implications. 

It wasn’t just the case that the British could see that the United States might be on a path to an oil-based navy and that they had to do something about it to get ahead. It was the way in which American car companies, particularly Henry Ford’s car company, came to dominate the car markets in the first part of the 20th century and could get into the mass production of cars because of mass ownership as part of a consumer society. These were things that did incite fear inside Europe. 

It wasn’t evident to begin with that cars were to be the sector that was dominated by American producers, but that is what happened. At the same time, you might say that when the West German and Japanese car manufacturers started to challenge American car manufacturers, that was an important moment in the story of the world economy during the 20th century.


That is precisely what I wanted us to discuss next. The story of oil and energy geopolitics underwrites the large chunk of economic relations discussed in the book, but there is obviously much more to it. One thing I found very striking was the parallel between the geopolitics of energy and transnational finance and the deep sense of frustration with mutual dependence in both realms. For example, the way that the explosion of capital mobility and the power of transnational markets is constraining the choices of many countries, including the largest players. On the one hand, we see worry in the US about their export competitiveness that is being affected by the vast reserves of dollars in other parts of the world, so that the Federal Reserve has huge difficulties influencing domestic monetary policy because of this huge offshore dollar credit market. On the other hand, we witness the frustration of the European and Chinese sides with the fact that they depend on the US currency when even fractional shifts in interest rates there will wreak havoc on them through major capital movements. That has a parallel in the story of oil, in the way that the US is the one that provides security of access to oil reserves in the Middle East, and the Europeans, and especially the Chinese, are at once concerned about the outsized US influence because of it. 

Now, one thing that really struck me is that there is seemingly deep frustration on all sides with this mutual dependence, but at the same time there seems to be very little appetite for any kind of negotiated international solution, for any kind of international institution that might somehow share the costs of provision of what are essentially international public goods. Is that also how you see the situation? Historically speaking, what are the conditions that might give rise to this kind of cooperation?

Where energy is concerned, there has not really been any attempt ever to try to internationalize the problem. There was some attempt to establish a more formalized Anglo-American cooperation during the Second World War that would have been a kind of parallel to the Bretton Woods system. But this was really about Britain and the United States; it wasn’t going to include all the countries that would participate in the Bretton Woods system. 

I think the bottom line here is simply that governments in individual states are so concerned about looking after their own interests, they tend to see it in such a zero-sum way that it’s not possible to structure international cooperation around it. 

The slight exception to that, though it is obviously not a formal international agreement, is the tacit assumption that is shared in European capitals and in Washington, as well as in Beijing, probably in India and certainly in Japan that, ultimately, the American navy will still be responsible for providing energy security for everybody from piracy in the Persian Gulf. That is not spelled out in some kind of agreement, but I don’t think that there’s any evidence that China actually wants the Chinese navy to be doing that, even though much more of the oil that’s coming out to the Persian Gulf these days is going to Japan and China than to the United States. And I don’t think there’s any evidence that in Washington they really want the Chinese navy taking responsibility for that, no matter how much protesting over Twitter Donald Trump did from time to time about other countries free riding on what the American navy does in the Persian Gulf.

When it comes to the international financial monetary side, obviously there was this period of international cooperation, or at least it can be cast like that in a general sense, through the Bretton Woods era. But I think certain caveats have even then got to be put on that as a multilateral approach to the problem of international monetary and financial coordination. First of all, the original agreement to set it up was a wartime agreement between the principal allies against Germany and Japan in the Second World War, so the United States, Britain, and the Soviet Union. That was completely geopolitically upended by the beginning of the Cold War because the Soviet Union took itself out when Stalin refused to ratify the Bretton Woods agreement, and then once the Americans moved to the position of wanting to reconstruct West Germany and Japan, those two countries needed to be brought into that system. 

If you look at it in straightforward monetary and financial terms, sure, there were some cooperative elements to it, but at its center it was a dollar standard. It said that the United States had the dominant currency in the world. It was the only currency that was going to be backed by gold, and everybody else had to peg themselves around it. A pretty strong American motive for the Bretton Woods system was that it allowed the Americans to control whether other countries could devalue their currencies against the United States. The fact that other governments have wanted to do that and succeeded in doing that in the early 1930s was part of deep American frustration with the way in which the gold standard had ended up. 

I think at times a rather excessively liberal interpretation is put on the Bretton Woods period as an era of multilateral cooperation. Now if we ask if there is any possibility of resurrecting that, clearly in today’s world it would depend upon China’s participation and an agreement between the United States and China, and I think that it’s pretty difficult to see how that would come about, in particular where exchange rates are concerned.

Now, beyond what went on during the Bretton Woods era there’s the question of the Eurodollar system. That began in the Bretton Woods era, but I wouldn’t say there was anything like the international dollar credit environment that there is today. This world in which we live in financially does involve tacit cooperation, and sometimes more than tacit, between the world’s leading central banks – and that would include the Federal Reserve and the Chinese central bank. I think it is notable that in the March 2020 financial crisis the Fed indirectly extended credit facilities to the People’s Bank of China. It didn’t offer a dollar swap line as some of the American allies get, but clearly the Federal Reserve provided some protection for China, if the going had got really tough in terms of dollar shortage. 

I would say that where the Eurodollar system is concerned there has to be more of at least tacit cooperation. 

Finance has not been subject to the same geopolitical dynamics as we are seeing in other areas of US-China relations, including energy. This is because I think everyone agrees that the consequences of simply allowing a Chinese dollar crash, allowing so many Chinese banks and Chinese corporations being unable to deal with their dollar debt don’t really bear thinking about. In some sense this – and I would not call it a system, but some kind of quasi-system – is being managed because there isn’t actually any alternative given how much is at stake. 


I suppose it is reassuring that even under conditions of disorder, we have ways to cooperate. There is however an interesting aspect to this, which concerns the domestic constraints that these powers might be facing in their attempts to cooperate and to keep the system relatively stable, and that is also partly the subject of the last part of your book. Part of that story is about how dependence on oil and the international capital markets constrains political choices of the Western governments and undermine democratic accountability. But another part of it, one that I found very original, is about how politics itself has deeper structures that determine these developments and partly might also constraint states’ choices, in relation to the international economy and geopolitics. 

The two key structures you identify in modern democratic states are the tension between democracy and nationhood, and the dynamics around debt, which is pervasive in any political system, but perhaps even more so in democratic systems. The claim here is that with time the accumulation of tensions along these two axes comes to a head to create a crisis within democracy itself. Can you say a bit about how these tensions are now limiting the ability of Western representative democracies to reinvent themselves, and reinvent the international system with them?

I think that there’s a set of questions about nationhood and democracies’ need for nationhood that exist independently of the debt questions. 

At the center of that, I would say, is the need for losers’ consent in a democracy, and the fact that in the history of representative democracies there hasn’t really been an alternative to some idea of shared nationhood doing that work – that the citizens accept that another group of citizens’ interest or beliefs prevail over theirs because ultimately they have enough in common that they are willing to lose, at least temporarily, to those people. 

They accept that in time, they will be on the winning side, and even if they are permanent losers, that this is not in the end absolutely unacceptable to the point where they don’t want to be part of the same state as the people whom they are losing to. I think that American democracy in particular has suffered as the problems around nationhood have magnified for a set of complex reasons. We can identify a fraying of the losers’ consent in American politics, I would say since the 1990s. 

Now the debt question is really interesting. I realized after I finished the book that I could have pushed one aspect of this further. For quite some time, there was this idea, including among people who thought really hard about the relationship between emerging representative democracy in the 19th century and debt, that if you made the citizens the creditors of the state then they had a stake in debt being repaid. Why did they think this was important? Because they took from the history of democracies in the ancient world – the history of ancient Athenian democracy and the history of the Roman Republic – that debt was a destabilizing issue in democratic or republican politics. Indeed, if you go back to the classical take on what Athenian democracy – the imaginative story that came out of it, at least as it was interpreted by many in Europe – was that to have a democracy was to be in favor of debtors and against creditors. That is simplified, of course, but there is some truth to that. 

Once we come to the 19th century, we can see clearly in these moves to representative democracy on restricted franchises that the idea is to give votes to those people who will act as the creditors of the new democracies. Now, when you get to the point in the 20th century in Europe where that means everybody, when we are talking about universal franchise, we also see this idea that everybody is going to be a creditor: a creditor-citizen, to use the language that James McDonald uses in his book on this subject, A Free Nation Deep in Debt

That is one means, not the only one, of how countries like the United States and Britain finance the world wars: they sell bonds to their citizens, and they present it as the patriotic duty of citizens to hold that debt for the country as it engages, in Britain’s case, in a battle for its survival. 

Something of that then endures through the postwar era, meaning until the 1970s, particularly through national savings accounts. This is a period in which governments in Western democracies don’t want to run budget deficits, they don’t want to borrow in international financial markets. International financial markets are, in many ways, restricted by the capital controls that governments have in place and that they’re allowed to have in place as a part of the Bretton Woods system.

When governments in the 1970s do want to run large budget deficits and they do turn back to international capital markets in order to finance that, something is being severed in Western democratic politics. 

The citizen-creditor is being taken out of the picture. It’s no longer the savings and taxes of the citizens who are paying for the democratic state, but a significant part of what the democratic state will spend money on is being borrowed in international financial markets. In that sense, I don’t think it’s a coincidence that the political problems around nationhood begin particularly in the United States in the 1970s, in terms of the weakening of an idea of shared American nation. 

There’s a lot more going on in the United States’ case, I realize, but if we then skip on to 2008, we have a situation in which it’s not the debt of the citizens that’s really problematic for democratic states, although the debt of mortgage holders is pretty problematic in the United States. The debt that terrifies them isn’t the debt of the citizens or the state, it’s the debt of the banks. It is the huge borrowing that banks have done in short-term money markets and, in the case of the European countries, that their banks have done in a foreign currency – in dollars – in short-term money market. We have debt as a central feature of the 2008 crisis, but the response to that problem has to be not only national central banks basically bailing banks out, but actually – in the case of European countries like Britain and France and Germany – having another country’s central bank, the Federal Reserve, providing the necessary support for their banks. 

We have moved from a situation in which representative democratic politicians worry about the relationship of their citizens to debt and whether their citizens will be able and willing to support the state’s debt to a situation in which they have to be preoccupied with whether central banks can deal with the problem of internationalized bank debt. 

Unsurprisingly, when citizens in these democracies see the preoccupation with banks’ debt and the indifference to their household debt, particularly in the United States, where you had a big mortgage foreclosure crisis going on, this is a serious political problem. However, the nature of the international financial system and the way in which the international dollar credit environment functions meant that there was no alternative to dealing with the banks’ debts, short of suffering an economic collapse of a kind that no democratically elected government would have had any interest in happening. 

That is quite a change in the history of representative democracies when you have central banks being the ones who are principally responsible for debt problems – and the responsibility that they’re focusing on is the debt problems of banks.


That is indeed a radical change. Your book is about the crisis of the largely Western representative democracies and the postwar Western order – and the disorder that they are thrown into partly through this accumulation of domestic excesses and partly due to the geopolitical shifts of having to accommodate China. I was curious, though, especially as I read this part about democracy, about how this re-founding of the social contract, the reshaping of the democratic and aristocratic tendencies within representative democracy, as you call them, are reflected in other places. 

Coming from a country that was made in 2006, living in the European Union which is still deciding how to constitute itself as a political entity, I can’t help but wonder how these shifts that you speak about impact the notions of citizenships and democracy in polities where all of this – the international capital markets, the relationship of the states to them – is a given. I was struck by your observation, when you were commenting on the EU’s resilience and recovery facility, about how proudly the EU officials announced that this will have no consequences for the citizens in terms of debt and taxes. Instead, we will build this great new foundation, the New Deal of the European Union through the international capital markets.

This goes back to my last point about the importance of debt in understanding the history of representative democracy. 

When you place this statement that was made about the EU recovery fund – that no European Union citizen is going to be taxed anything for this – into the historical context, you see just how odd it seems. It really is putting the European Union in a different kind of world from the one in which representative democracy first emerged. 

Now you can say that is because European Union isn’t primarily interested in creating a democratic European Union, it’s primarily interested in managing a set of economic interdependencies, and perhaps now geopolitical interdependencies within Europe and Europe’s geopolitical relations with the rest of the of the world. But I still would say that that has consequences for the ways in which any European Union citizen is going to be willing to make sacrifices in the name of shared citizenship. Because the way in which that has historically been done did require some sense of shared obligations as well as shared rights. Obviously, those shared obligations weren’t just about paying taxes and bearing debt, they were also about conscription, but paying taxes and sharing debt was for a long time part of what it meant to be a citizen in a representative democracy.

If we move to the to the rest of the world, I think that what’s really interesting – and we can see this playing out at the moment in relation to the war – is how Europe also creates shocks in the rest of the world. 

If we think about what’s happening in connection with the war in Ukraine, we see that there was a fundamental inability in European countries to take the problem of Russia seriously and to understand what it meant for there to be an independent Ukrainian state and to guarantee the independence and security of that Ukrainian state. As a result of the conjunction of Putin’s ambition and European failure, a war is going on that is acting as a profound economic shock across the world, particularly to certain North African and Middle Eastern countries that are especially dependent on wheat imports from both Russia and Ukraine. 

These are places, and I would pick out particularly Lebanon, but also Iraq, where we could already see back in 2019, so even before the pandemic hit, that the series of geopolitical and economic problems that were writ large across the world economy were having some devastating impacts. It is notable that most non-Western countries are not being particularly, shall we say, judgmental about Russia’s behavior in this war. 

If you go back to the energy side of things and you just take one example, there’s a pretty significant offshore gas project of Gazprom in which Gazprom was in partnership with both Shell and with two Japanese companies. This Sakhalin 2 is the major Russian gas field from which there were liquid natural gas exports, rather than gas being pipelined out. Shell has announced that it’s giving up its equity partnership with Gazprom, but the two Japanese companies – Mitsui and Mitsubishi – said that they’re staying and when asked about it the Japanese Prime Minister basically said it was essential for Japan’s energy security. 

I think the danger in Europe at the moment is that we forget that other countries have energy security interests too, that they don’t have the same set of security concerns in relation to Russia that we do in Europe, and that they will make very different judgments than ours about what should be prioritized. 

All of this will have implications for the European countries. The shocks can come out from Europe, but then they come back to Europe. 

Although I decided that I couldn’t write a book in which I would try to also get to grips with the issues of democracies and economies of non-Western countries, in making that choice I didn’t want to say that they don’t matter causally for understanding the world. These are in fact very important parts of the world for understanding the dysfunctional dynamics at work in the world. 

The book does touch upon the ways in which sometimes the places which are somewhat peripheral to the major fault lines can become key sites where all the crises crush together. For example, you talk quite a lot about Syria and the way it ended up at the interstices of these conflicts. However, it seems like you’re suggesting that perhaps this Western disorder and having to rethink how to order the world may also create some opportunities for countries which are further away from these fault lines in terms of security realignments or access to energy.

I think that if there is really a decisive turn in Europe away from Russian energy, then that does have consequences for Asian countries that have been moving closer to Russia energy-wise, particularly where gas is concerned.  However, Asian countries have been quite constrained by Russia’s pipelines because there is only one pipeline that takes Russian gas eastward rather than westward – that’s the Power of Siberia pipeline to China that opened in 2019. At the same time, although Russia does have a liquid natural gas capacity, probably any big expansion of it depends on further production in the Arctic which will be technologically difficult and expensive. 

In some sense, I think that Asian governments – and Japan, China, and India particularly – will be thinking about their strategy in relation to what they think European governments will actually do. 

If the European countries don’t have any choice but to back away from Russian gas, the Asian governments can be the principal beneficiaries, so long as their companies are willing to put up the finance and technology to help the Russians. 

Then there’s the question of the potential American reaction against that, which is an unknown. The US position is further complicated by the fact that since the 1970s the US has moved around between different levels of foreign energy dependency. It never got to the point of being completely energy independent again, but it did where gas is concerned and even its oil dependence was much reduced as a result of the shale boom. 

Then again, the shale sector has not really recovered fully from the pandemic, and it is not clear that it can. Biden is already back to asking OPEC plus to produce more oil but that really means asking the Saudis to break with the Russians, which I don’t think there is any evidence they will agree to. Biden has opened the Strategic Petroleum Reserves and is planning to sell over the next six months more from there than has ever been done before. He is also trying to encourage greater exports from Canada. The United States in fact seems to be moving back from where it came where oil is concerned – the 2020s may be more like the 2000s than the 2010s. 

But that’s before we consider the energy transition issues. Certainly, on oil the American choices were already getting harder as a result of what happened to shale during the pandemic and Biden’s climate commitments even before we get to the invasion and the energy shock that Russia has administered to the entire world economy. We are already beginning to see that the disorder of the 2020s on the energy side isn’t quite going to be like the disorder of the 2000s and 2010s because another shift in the American position is under way from both the stalling of the shale boom and the energy transition. 

The transcript has been edited for length and clarity.

In collaboration with Ferenc Laczó

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