The link between the cost of energy and our standard of living is, again, clear. Access to energy continues to be a defining feature of modern security and foreign policy. These relationships are of vital importance to states and economies as they confront both the seismic challenges of Covid and the simultaneous political reordering of our world.
Helen Thompson, a professor of political economy at Cambridge University, is a leading analyst of this change. Her new book is both timely and exceptionally ambitious as it identifies the powerful forces that influence the standing of nations.
This history begins with the impact of oil on the economic and security strength of countries. Thompson argues that, “In understanding the path from the past to the present, oil has a particular significance. Since it powers ships and aircraft, it is the energy source on which military power rests.”
The author traces this path to the first World War, when access to oil was vital for fuelling navies. It was not just access that mattered; changes in the price of oil had profound effects on livelihoods and economic growth.
This is why reductions in the price of oil in 1986 were “geopolitically transformative”. Tax revenue from oil production to the Soviet Union was reduced. The impact of this weakened efforts to sustain a military presence in Afghanistan. It also significantly undermined the Soviet ability to suppress independence movements in eastern Europe.
The relationship between energy dependency and national security is thoroughly analysed. The consequences of how European states source their energy is explained and is essential to understand the challenges that the EU now confronts in Ukraine. Thompson concludes that, “The dollar, monetary policy, debt, and energy are the points where economic change, geopolitics, and democratic politics decisively intersect”.
This is an exceptionally challenging task – it could be the subject of a sequence of books. In rising to it, the author assembles a vast stock of detail
The economics of this intersection are then analysed, beginning with attempts to internationally co-ordinate the fluctuating value of currencies in the aftermath of the second World War. This culminated in the Bretton Woods agreement, where countries agreed to link their currencies to the value of gold.
The agreement was a seminal moment, as was the demise of such co-operation. The author concludes that, “Like much else in the present world economy, the story of the euro zone begins in the 1970s and, in particular, in Bretton Woods’ end”. This resulted in extensive efforts, over many decades, to co-ordinate the value of European currencies. These efforts culminated in the creation of the euro.
It is in this section that the difficulty of Disorder: Hard Times in the 21st Century become apparent. In seeking to explain our disrupted political era, it narrates three modern histories – those of oil, economies and democracies. The book also aims to explain the relationships between these three forces.
This is an exceptionally challenging task; it could be the subject of a sequence of books. In rising to it, the author assembles a vast stock of detail. But this is at the expense of insight.
At many points the general reader would benefit from a pause, a reminder of important insights and help in joining the dots in these epic transformations. The many strands require pulling together. The frequent absence of this deprives readers of some of the author’s wisdom.
This is also one of the difficulties of the final section: Democratic Politics, a summary of political efforts to mediate the forces that are so forensically
described in the earlier sections. But, by beginning with the birth of representative democracy in the US, these chapters try to cover too much too quickly.
This undermines the assembly of argument to support claims. In an intriguing chapter, Democratic Time, the author argues that “democracies exist in particular places in particular times...they, like any other form of government, experience time as a source of instability”.
The case could be made that democracies are mostly successful in melding the flow of time with the requirement for political consent into political outcomes that are always changing. Either way, such judgments require more development than this book allows.
This is also evident in the evaluation of the operation of European institutions. For example, Thompson argues that a common vision of the future of Europe is lacking for citizens, but that “in offering an alternative conception of a European political community to national citizens, the EU itself played a part in ensuring the increasing absence of any such unity”.
It sounds like a case of “damned if you do, damned if you don’t” for the EU. This could be unfair to the subtlety of the author, but too many claims are partially made.
Disorder is a still a powerful guide to modern Hard Times. That it could have achieved even more does not diminish the value of this work as any reader will finish it with a deeper understanding of our contemporary challenges.
Paschal Donohoe is the Minister for Finance and president of the Eurogroup
