The energy narrative starts with the rise of oil and its replacement of coal which gradually disadvantaged Europe. The monetary strand starts in 1971-1973 with the dissolution of Bretton woods and the ERM and then Euro. It covers both sides of the Atlantic with alternative threads of discussion flipping between the US and Europe. There's fascinating insight into the tensions between Britain, France and Germany at that time. The second monetary chapter is about US-China relations the build up of easy credit and the cause of the 2007-2008 crash. But here’s the thing: I don’t mind working hard to grasp a concept, but the reward needs to be worth it. In other words, if I’m going to spend my precious reading time decoding a challenging text, I’d better walk away with some groundbreaking revelations or at least some unique viewpoints. Thompson's book, however, despite its moments of clarity, often regurgitated ideas and themes that have been discussed elsewhere, and in more digestible formats. The economic story begins in the 1970s and explains how the rise of the Eurodollar system and the decade's energy crises remade the monetary world and the European Union, and how the Federal Reserve and China's response to the 2007-8 crash in preventing an economic collapse let lose a succession of economic and energy problems that cannot now be resolved. In this absorbing and wide-ranging study Helen Thompson unravels the complex intersections of oil, money, and democracy for understanding the politics of the last century. She provides an indispensable and illuminating guide to our current predicaments.

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Thus she weaves many events in a world encompassing mesh that made me gasp for breath at times. While I do recognize many of the references, the ease with which Thompson ties them all together is not always very clear. She explicitly intended to forego detail in favour of synthetic interpretation. Another author would have written three books instead, choosing to provide more context. That the latter parts of the 1980s and the 1990s were in good part intermissions from the intensity of these geopolitical and economic problems was largely the function of an energy interlude. Low oil prices, aided by the last years of China’s energy self-sufficiency, yielded low inflation and reasonably high growth. Soviet and then Russian weakness, as well as Washington’s ability first to use Iraq to contain Iran and then air power to police Iraq, allowed the United States to exercise power in the Middle East while fighting only one brief land war to free Kuwait. Separately, relative German economic weakness in the late 1990s and early 2000s meant that the euro’s early years were fairly conflict-free. Instead, it is taken as given that France had no choice but to tie its currency to Germany’s one way or another. The United Kingdom’s inability to remain within the European Exchange Rate Mechanism that preceded the euro is presented mainly as a story about the eventual inevitability of Brexit rather than as a chance to consider whether the U.K. and other major non-euro economies, such as Poland and Sweden, had significant advantages or disadvantages compared to their neighbors.

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A counterfactual history of the last 100 years would, of course, be substantially different if global oil and gas resources were located mainly in, say, Africa and Asia, rather than the US, Russia and the Middle East. But this has not been deemed a sufficient reason for most historians to foreground energy factors at the expense of other material circumstances that shaped evolving events. 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. Likewise if and when there is another Energy transition - to renewables - the U.S. and China will contest for dominance in that age - Geo politics/alliances will change as appropriate. There is a November 2022 interview on the Demand Side podcast where the author explains how the book gestated since 2018 especially its delay due to Covid-19. Thompson describes how she divided the book into geopolitics driven by energy supply particularly oil and gas and finance particularly the dismantlement of Bretton woods and democratic politics which cannot be separated from nation states. Her analysis of the breakdown in democracy is also idiosyncratic, using the framework of cycles of accumulating “aristocratic or democratic excess” to explain how forms of government become unstable through time.

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The geopolitical story begins with the inherent difficulties the United States faced as an ascendant non-Eurasian power in the early twentieth century, especially in the Middle East, and culminates in the American turn away from China in a world in which the United States is simultaneously a declining military power and a resurgent energy and financial power. Although she does not predict the Russian invasion of Ukraine, she certainly sees the risks of it. I imagine she will have been somewhat surprised at the level of unity amongst Western countries that has so far been evident against Russia, and not at all surprised at the fault lines that are showing. She writes that “overall energy costs will rise and, once again, act as an inflationary pressure. Gas prices in Europe are particularly vulnerable to issues with Russian supply and transit, whether technical or generated by Putin’s willingness to use gas as a blunt strategic instrument.” Extending the analysis of economic effects of the energy transition, she goes on to state that “Without major breakthroughs on battery storage, there is no guarantee that electricity powered by renewables can escape an inflationary dynamic. Whatever the low unit costs of producing solar- or wind-powered electricity, at the system level – especially in those places, like Germany, where renewables are a significant proportion of the sector but the weather is unpropitious – the inefficiencies of intermittent renewables capacity have thus far often yielded higher electricity prices for consumers. It is likely that this energy-driven inflation will eventually unsettle the bond markets and make borrowing more expensive for governments.” Affordable energy storage is indeed crucial, but I think there is somewhat more room for optimism than Professor Thompson appears to show. Battery storage prices have been falling rapidly, for example, and hydrogen and synthetic fuels will also fall in price as government-supported deployment increases.It is a dense book. While the absence of superfluous words is welcome, it surely could have been made easier to read. However, Thompson is a realist: she notes in her concluding comments the emerging competition for advantage and dominance in renewables and new electrification technology, but argues that Net Zero ambitions currently are illusory, given the limited capacity of the technologies to generate substantial and continuous flows of energy from renewables and to electrify widespread industrial infrastructure powered by oil and gas. Thompson seems here to be echoing the substantial reservations about renewables discussed in recent books on climate politics by American environmentalist Michael Shellenberger, fossil fuel energy campaigner Alex Epstein, and others. 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? Let’s talk about the elephant in the room first: the writing style. Oh boy, it was a slog. I’ve read plenty of academic papers and verbose essays in my time, but this was something else. The prose was so dense and cumbersome that it felt like wading through a swamp with weights on my feet. The book covers a great deal of ground. The first section emphasises the role that oil consumption has had on the choices policymakers can make. She offers a particularly interesting history of how the Suez crisis shaped the choices facing european politicians and how this created a dependency on Russian exports which obviously created lasting divisions. Oil remade the geopolitics of the 20th century and I enjoyed her history of the attempts goverments made to control this resource and the subsequent challenges this created - both for energy exporters and importers.

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I will refrain from summarizing the closing section where she ties these together so you’ll read this excellent book yourself. This is particularly the interpretation she provides for the tensions between the EU institutions and the increasingly restive national populations in Europe. National governments in the Eurozone have ceded control of monetary policy to the ECB, and have less incentive and flexibility to manage their economies. Their populations consequently react negatively when their governments seem not to be accountable for austerity programs and other financial governance matters that affect them.

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Similarly, the emergence of China as a major manufacturing power was so traumatic to the workers of the industrialized world only because the party state ensured that Chinese consumers were unable to spend the money they should have been paid on the goods and services they wanted. China did not practice “export-led growth” but rather wage suppression and financial repression that held down imports. That choice was bad for people in China, but it was also costly for everyone outside China who lost income because they couldn’t sell enough to Chinese customers. The second strand is financial, examining the evolution of the world economy from the collapse of the Bretton Woods settlement through the global financial crisis and the subsequent travails of the European economic and monetary union. The third strand is more straightforwardly political. Here, she relates the changing political landscape in Europe, in particular, to developments in the energy market and the impact of the financial and Eurozone crises on political parties. In most EU countries, the centre ground of politics has splintered and new forces on the far left and far right now play a much more significant role than they did two decades ago. The presidential campaign in France provides a perfect illustration. The Socialist Party has more or less disappeared, and the traditional Gaullists have at times been in fourth position, behind Macron, Marine Le Pen and the far-right Eric Zemmour. This is a vastly abbreviated summary of the highly complicated history of oil and geopolitics presented in the book. Missing here are the Syrian civil war, NATO actions in Libya in the 2010s, China’s rising demand for energy and the effects on international finance, the US shale revolution, Turkey’s increasingly militaristic claiming of oil and gas resources in the Eastern Mediterranean, amongst other things, but being more recent these might be more familiar to the reader.