The U.S. Dollar Market and Its Implications for Geopolitics

For our penultimate episode, David talks to Helen about her new book Disorder: Hard Times in the Twenty-First Century. It’s a conversation about many of the themes Helen has explored on Talking Politics over the years, from the energy transition to the perils of QE, from the travails of the Eurozone to the crisis of democracy, from China to America, from the past to the present to the future. In this book, she brings all these themes together to help make sense of the world we’re in.

Talking Points: 

Suez is often seen as a crisis of British imperial hubris. But it’s also about energy.

• The US wanted Western European countries to import oil from the Middle East.
• But the US at the time was not a military power in the region.
• So the US essentially became a guarantor of Western European energy security, but implementation was dependent on British imperial power in the region.
• When Eisenhower pulled the plug on Suez, Europe panicked. 

The aftermath was hugely consequential.

• France turned to Algeria, but that went badly.
• Europe also embraced nuclear power to pursue energy self-sufficiency.
• And finally, this precipitated a turn to Soviet oil and gas and the construction of pipelines between Soviet territories and Western Europe.

The shale boom was a double-edged sword: it also destabilized the alliance with Saudi Arabia and increased competition between the US and Russia.

• Meanwhile, Chinese demand has been increasing. 
• The US today imports much less oil from the Persian Gulf, but the US Navy still provides energy security in the region, even though most of that oil goes to China and Japan. 

QE created a wholly new situation in the Eurozone.

• Everyone in the Eurozone game essentially understands that if QE is going to continue, there will be constraints around what can happen in Italian domestic politics.
• The current prime minister of Italy is the former president of the ECB.

One of the risks of democracy is democratic excess. But democracies can also experience aristocratic excess.

• In US elections, people need a lot of money to compete. This means that there is not really an outlet for genuine democratic demands.

Mentioned in this Episode:

• Helen’s book, Disorder
• James Macdonald, A Free Nation Deep in Debt

Further Learning: 

• More on Nord Stream 2 
• Helen, on how the rich captured modern democracies
• Helen on Ukraine for the New Statesman
• Why the Ukraine crisis is a modern crisis

And as ever, recommended reading curated by our friends at the LRB can be found here: lrb.co.uk/talking