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a lot of people who came out of third-world countries felt, “We are never going to catch up with the West if we just wait for the market to work its way over hundreds of years.” They looked at, in the ’30s, the Soviet Union and thought, “This is a way to accelerate modernization, industrialization.” They all were much more comfortable with the idea of something that sped up the historical process of modernization.

Milton Friedman used to say that there are two groups of people who don’t like the free market. Academics, intellectuals because they think they can do it better than the market, and businessmen because they don’t like competition. What they really want — this is a variation of the Peter Thiel argument — what they all really want is to be monopolists. That former part is, I think, what explains the Bengali intellectuals.

I think that the reality is, the market is much more powerful than they are in these areas. To give you one simple example, they decided, “Okay, we need to be making high-end chips.” Who do they bet on? They bet on Intel, a company that has failed miserably to compete with TSMC, the great Taiwanese chip manufacturer. Intel is now getting multi-billion-dollar grants from the United States government, from the European Union, because it fills all the categories that you’re looking for: big company, stable and well-run, in some sense, can guarantee a lot of jobs.

But of course, the reality is that chip making is so complicated

Who knew that, actually, it’s Nvidia, whose chips turned out to be designed for gaming, turned out to be ideal for artificial intelligence? That’s a perfect example of how the Hayekian market signals that come bottom-up are much more powerful than a political elite who tries to tell you what it is.

COWEN: What did you learn from the Anglican Book of Common Prayer?

One was a reverence for tradition, and in particular, I loved the hymnal. I think Britain’s great contribution to music is religious music. It doesn’t have anything to compete with the Germans and the Italians in opera and things like that. Religious music, I think the Brits and the English have done particularly well.

The second thing I would say is an admiration for Christianity for its extraordinary emphasis on being nice to people who have not been lucky in life. I would say that’s, to me, the central message of Christianity that I take, certainly from the Sermon on the Mount, and it’s imbued through the Book of Common Prayer: to be nice to the people who have been less fortunate than you. Be nice to poor people. Recognize that in God’s kingdom, the first shall be last and the last shall be first.

There is an enormous emphasis on the idea that those things that make you powerful in this world are not the things that really matter, that your dignity as a human being doesn’t come from that. I think that’s a very powerful idea. It’s a very revolutionary idea

Tom Holland has a very good book about this. He’s a wonderful historian in Britain. I think it’s called Dominion.

He points out what a revolutionary idea this was. It completely upended the Roman values, which were very much, the first shall be first. The powerful and the rich are the ones to be valued. He points out, here is this Jewish preacher coming out of the Middle East saying, “No, the first shall be last, the last shall be first in the kingdom of heaven.”

COWEN: I went to Amritsar the year before, and it was one of the most magical feelings I’ve ever had in any place. I’m still not sure what exactly I can trace it to — I am not a Sikh, of course. But what, for you, accounts for the strong, powerful, wondrous feeling one gets from that place?

I think there’s something about it architecturally, which is that there is a serenity about it. Sometimes you can find Hindu temples that are very elaborate. Sikhism is a kind of offshoot of Hinduism. The Hindu temples can be very elaborate, but very elaborate and ornate. This somehow has a simplicity to it. When you add to that the water — I’ve always thought that water adds an enormously calming effect

Hindi and Urdu are two Indian languages, very related. They both have roughly the same grammatical structure, but then Hindi derives its vocabulary entirely from Sanskrit, or almost entirely from Sanskrit, and Urdu derives its vocabulary almost entirely from Persian. Urdu is a language of Indian Muslims and is the official language for Pakistan. It’s a beautiful language, very lyrical, very much influenced by that Persian literary sensibility.

If you’re speaking one of the languages, there’s a way to alternate between both, which a lot of Indian politicians used to do as a way of signaling a broad embrace of both the Hindu and the Muslim communities. Nehru, India’s first prime minister, used to often do that. He would say, “I am delighted to be coming here to your home.” He’d repeat the word home, first in Urdu, then in Hindi, so that in effect, both constituencies were covered.

Modi, by contrast, India’s current prime minister, is a great Hindu nationalist. He takes pains almost never to use an Urdu word when he speaks. He speaks in a kind of highly Sanskritized Hindi that most Indians actually find hard to understand because the everyday language, Bollywood Hindi, is a mixture of Hindi words and Urdu words

I think the partition of India was a complete travesty. It was premised on this notion of religious nationalism. It was horrendously executed. The person who drew the lines, a man named Radcliffe, had never been to India. He’d never been east of the Suez and was given this task, and he did it in a month or two, probably caused a million-and-a-half to two million lives lost, maybe 10 million people displaced. It broke that wonderfully diverse, syncretic aspect of India.

If you look at cities like Delhi and Lahore, what was beautiful about them is that they mix together all the influences of India: Hindu, Muslim, Punjabi, Sindhi. Now what you have is much more bifurcated. If you go to Lahore, Lahore is a Muslim city in Pakistan, and it has a Punjabi influence. Delhi has become, essentially, much more Indian and Hindu and has lost that Muslim influence. To me, as somebody who really loves cosmopolitanism and diversity, it’s sad to see that. It’s almost like you’ve lost something that really made these places wonderfully rich.

I feel the same way when you read about the history of Europe. You think of a place like Vienna, which, in its most dazzling moment, was dazzling precisely because it was this polyglot population of people coming from all over the Habsburg Empire. A large segment of it was Jewish, and it had, as a result — think about Freud and Klimt and the music that came out of there, and the architecture that came out at the turn of the 19th century. And it’s all gone. It’s like, at this point, a somewhat beautiful but slightly dull Austrian city.

I remember once being asked when I was a graduate student at Harvard — Tony Lake was then national security adviser, and his office called and said — I’d written something in the New York Times, I think — “Mr. Lake would like you to come to the White House to brief him.”

I think, in a sense, Islam fit in within that tapestry very easily, and it’s been around for a while. When people talk about cleansing India, Hindu nationals talk about cleansing India of foreign influences. Islam has been in India since the 11th century, so it’s been around for a long time

I was amazed that America — it wasn’t America; it was where I was at Yale and Harvard and all that — that nobody cared where I came from. Nobody cared.

the syncretic nature of India, that India has always been diverse. Hinduism is very tolerant. It’s a kind of unusual religion in that you can believe in one god and be Hindu. You can believe in 300. You can be vegetarian and believe that’s a religious dictate. You can be nonvegetarian and believe that that’s completely compatible with your religion. It’s always embraced almost every variant and variation.

I walked in and there were five people around the table: Tony Lake; Deputy National Security Advisor Sandy Berger; George Stephanopoulos, who was then director of communications at the White House; Joe Nye, who was a senior professor at Harvard; one other person; and myself. And I kept thinking to myself, “Are they going to realize at some point that I’m not an American citizen? They’re asking me for my advice on what America should do, and I am on a student visa.” And of course, nobody ever did, which is one of the great glories of America.

My thesis topic was, I tried to answer the question, when countries rise in great power, when they rise economically, they become great powers because they quickly translate that economic power into diplomatic and military power. What explains the principal exception in modern history, which is the United States?

My simple answer was that the United States was a very unusual creature in the modern world. It was a very strong nation with a very weak state. The federal government in the United States did not have the capacity to extract the resources from the society at large because you didn’t have income taxes in those days.

COWEN: What put you off academia? And this was for the better, in my view.

ZAKARIA: I think two things. One, I could see that political science was moving away from the political science that I loved, which was a broad discipline rooted in the social sciences but also rooted in the humanities, which was rigorous, structural, historical comparisons. Looking at different countries, trying to understand why there were differences.

It was moving much more toward a huge emphasis on things like rational choice, on game theory There was an economist envy. Just as economists have math envy, political scientists have economist envy. It was moving in that direction

COWEN: After 9/11 in 2001, you wrote a famous essay for Newsweek, “Why Do They Hate Us?” You talked about the rulers, failed ideas, religion. If you were to revise or rethink that piece today, how would you change it? Because we have 23 more years of data, right?

He had a routine, which is, he’d get up about 6:00 a.m. He’d go down to the basement of his townhouse, and at 6:30, he would start writing or working on whatever his next big research project was. He’d do that, uninterrupted, for three hours at least, sometimes four. Then, at about 9:30, 10:00, he would take the subway to Harvard.

His point was, you got to start the day by doing the important work of academia, which is producing knowledge. All the rest of it — teaching, committee meetings, all that — you can do later. He was so disciplined about that, that every five years or so, he put out another major piece of work, another major book

I looked at that, and I said to myself, I do not have the self-discipline to perform at that level. I need to go into something that has deadlines,

It’s all within you, and you have to be able to generate ideas from that lonely space. I’ve always found that hard. For me, writing books is the hardest thing I do. I feel like I have to do it because I feel as though everything else is trivia — the television, column, everything else.

The second piece of it was actually very much related to Huntington. Sam Huntington was quite an extraordinary character, probably the most important social scientist in the second half of the 20th century. Huge contributions to several fields of political science. He lived next to me

ZAKARIA: Yes. Not very much, honestly. The central point I was making in that essay was that if you look at the Arab world, it is the principal outlier in the modern era, where it has undergone almost no political modernization.

The Arab world had remained absolutely static. My argument was that it was largely because of the curse of oil and oil wealth, which had impeded modernization. But along with that, because of that failed modernization, they had developed this reactionary ideology of Islam, which said the answer is to go further back, not to go forward. “Islam is the solution,” was the cry of the Islamic fundamentalists in the 1970s.

COWEN: I’m struck that this year, both you and Ruchir Sharma have books coming out — again, Fareed’s book is Age of Revolutions: Progress and Backlash from 1600 to the Present — that I would describe broadly as classically liberal. Do you think classical liberalism is making a comeback

the reason these books are coming out — and certainly, mine, as you know, is centrally occupied with the problem that there’s a great danger that we are going to lose this enormous, probably the most important thing that’s happened in the last 500, 600 years in human history, this movement that has allowed for the creation of modern liberal democratic societies with somewhat market economies.

If you look at the graph of income, of GDP, per capita GDP, it’s like a straight line. There’s no improvement until you get to about, roughly speaking, the 17th, 18th century in Europe, and then you see a sharp uptick. You see this extraordinary rise, and that coincides with the rise of science and intellectual curiosity and the scientific method, and the industrial revolution after that. All that was a product of this great burst of liberal Enlightenment thinking in the West.

If you think about what we’ve gone through in the last 30 years — and this is really the central argument in my book — massive expansion of globalization, massive expansion of information technology so that it has completely upended the old economy. All of this happening, and people are overwhelmed, and they search in that age of anxiety. They search for a solution, and the easy solutions are the ones offered by the populists.

They’re deeply anti-liberal, illiberal. So, I worry that, actually, if we don’t cherish what we have, we’ll lose what has been one of the great, great periods of progress in human history.

COWEN: Why does your book cover the 17th-century Dutch Golden Age? ZAKARIA: The Dutch are the first modern country. If you think about politics before that — certainly with the exception of ancient Greece and Rome — in modern history, the Dutch invent modern politics and economics. They invent modern politics in the sense that it’s the first time politics is not about courts and kings. It is about a merchant republic with powerful factions and interest groups and political parties, or the precursor to political parties.

It’s the beginning of modern economics because it’s economics based not simply on land and agriculture, but on the famous thing that John Locke talked about, which is mixing human beings’ labor with the land. The Dutch literally do this when they reclaim land from the sea and find ways to manage it, and then invent tall ships, which is, in some ways, one of the first great technological revolutions that has a direct economic impact.

You put all that together, and the Dutch — they become the richest country in the world, and they become the leading technological power in the world. It was very important to me to start the story — because they are really the beginnings of modern liberalism

COWEN: Circa 1800, how large were the Chinese and Indian economies?

Circa 1800, the Chinese and Indian economies are the two largest economies in the world, and people have taken this to mean, oh, the West had a temporary spurt because of colonies and cheap energy, and that the Chinese and Indians are just coming back to where they were.

First of all, the statistic is misleading because in those days, GDP was simply measured by using population. All society was agricultural. The more people you had, the larger your GDP. It was meaningless because the state could not extract that GDP in any meaningful way, and it’s meaningless because it doesn’t measure progress. It doesn’t measure per capita GDP growth, which is the most important thing to look at.

If you look at per capita GDP growth from 1350 to 1950, for 600 years, India and China have basically no movement. It’s about $600 in 1350 and $600 in 1950. The West, by comparison, moves up 600 percent in that period. It’s roughly $500 per capita GDP to roughly $5,000 per capita GDP.

You can also look at all kinds of other measures. You can look at diet. There are economic historians who’ve done this very well, and people in England were eating four to five times as much grain and protein as people in China and India. You can look at the extraordinary flourishing of science and engineering. You can look at the rise of the great universities. It’s all happening in the West.

The reason this is important is, people need to understand the rise of the West has been a very profound, deep-rooted historical phenomenon that began sometime in the 15th century. The fact that we’re moving out of that phase is a big, big deal. This is not a momentary blip. This is a huge train. The West define modernity. Even when countries try to be modern, they are in some way becoming Western because there is no path we know of to modernity without that.

One other way of just thinking about how silly that statistic is: in pure GDP terms, China had a larger GDP than Britain in 1900. Now, look at Britain in 1900: the most advanced industrial society in the world, ruling one-quarter of the world, largest navy in the world, was able to humiliate China by using a small fraction of its military power during the opium era. That’s what tells you that number is really meaningless. The West has been significantly more advanced than the rest of the world since the 16th century at least.

Larry Kudlow, the top White House economic adviser, on a campaign call with reporters Thursday said Mr. Biden would jeopardize that growth with his plan to raise taxes on the wealthy, and vowed that the Trump administration would take a “targeted approach” to rising coronavirus cases that would rely on wearing masks and social distancing. Mr. Trump has urged neither at the dozen rallies he has held in the past six days.

“Millions of people out there are out of work, on the edge, can’t see the light at the end of the tunnel. And Donald Trump has given up,”

The Wall Street Journal’s October survey of economists found that more than half of respondents don’t expect GDP will return to its pre-pandemic level until next year and that the economy will contract 3.6% this year, measured from the fourth quarter of 2019.

Thirty-nine states, and the District of Columbia, have already topped 2016 early-voting levels.

“If you lost $100 and then got back $65, would you feel well off? That’s what today’s GDP number means,” tweeted Steven Rattner, a Democratic financier and former Obama administration official

Heading into the 2020 campaign, Mr. Trump expected the booming economy to be the centerpiece of his re-election effort, with the economy one of the few issues where he has consistently outpaced Mr. Biden in polling

Presidents Harry S Truman, John F. Kennedy and Lyndon B. Johnson rank first through third.

Presidents George H.W. Bush, Jimmy Carter and George W. Bush make up the bottom three.

President Ronald Reagan is No. 8, just one slot above President Obama.

there are six Republicans and six Democrats, so if we take the average for Democratic and Republican presidents we can make a head-to-head party comparison

The Democratic presidents scored substantially higher than the Republican presidents, with a score of 26.95. Republican presidents scored -26.95.

Five out of six Democrats reduced the national debt as a percentage of GDP, while four out of six Republicans raised it. The story is similar on budget deficits, with five of the top six performances recorded by Democrats and four of the bottom five recorded by Republicans.

With respect to GDP growth, three of the top four performers were Democrats and four of the bottom five were Republicans. In reducing the poverty rate, the top three were Democrats and two of the bottom three were Republicans. The Democrats also had a better record on employment.

Republicans had better records on reducing inflation, achieving four of the top five performances, while Democrats had four of the bottom five showings. Republicans also did well in lowering tax revenue as a percentage of GDP, claiming the top five spots.

what does this tell us about Obama? When all of the indicators are combined, he ranks ninth out of 12, one position below Reagan but above Bush 41, Carter and Bush 43. Obama is also well below the midpoint that falls between Clinton and Nixon. For Republicans who view Reagan as an economic miracle- maker and Obama as, well, something less than that, it might come as a shock that Obama falls next in line in economic performance.

Lined up against his contemporaries after 1977, Obama ranks third out of six.

The question is what on earth can be done to prevent the debt explosion. The CBO has a clear answer: "[B]ringing debt back down to 39 percent of GDP in 2038—as it was at the end of 2008—would require a combination of increases in revenues and cuts in noninterest spending (relative to current law) totaling 2 percent of GDP for the next 25 years. . . .

"If those changes came entirely from revenues, they would represent an increase of 11 percent relative to the amount of revenues projected for the 2014-2038 period; if the changes came entirely from spending, they would represent a cut of 10½ percent in noninterest spending from the amount projected for that period."

Worried about Chinese students’ high scores on comparative math tests? You’re looking at the curated outputs of highly selective groups of students. Whereas public school is free through high school in the United States, China’s government only covers the costs of elementary and middle school. At many Chinese high schools, families have to pay tuition and other expenses, and these outlays are among the highest in the world. Consequently, 76 percent of China’s working-age population has not completed high school.

The book argues that China’s economic, financial, technological, and military strength is hugely exaggerated by crude and inaccurate statistics.

The claim that China will “overtake” the U.S. in any meaningful way is polemical and wrong—and wrong in ways that may mislead Americans into serious self-harming mistakes.

China may well surpass the United States as the largest economy on Earth by the 2030s. China was also almost certainly the largest economy on Earth in the 1830s. A big GDP did not make China a superpower then

many of the advances cited as Chinese strengths don’t hold up to close scrutiny. American analysts often publish worries about China’s growing navy, and especially its two aircraft carriers. But, Beckley writes, “Chinese pilots fly 100 to 150 fewer hours than U.S. pilots and only began training on aircraft carriers in 2012,” and he adds that “Chinese troops spend 20 to 30 percent of their time studying communist ideology.”

in the 1800s, the Chinese empire had a GDP much larger than that of Great Britain. The Chinese army of 800,000 men also enormously exceeded Britain’s troop numbers. Yet when the two states clashed in the two Opium Wars, from 1839 to 1842 and again in 1858, China was crushingly defeated. Why? A great part of the answer, then as now, was the cost of repression.

Many Chinese college students describe their universities as “diploma factories,” where student-teacher ratios are double the average in U.S. universities, cheating is rampant, students spend a quarter of their time studying “Mao Zedong thought,” and students and professors are denied access to basic sources of information, such as Google Scholar and certain academic journal repositories.

Chinese firms’ total spending on R&D as a percentage of sales revenue stalled at levels four times below the average for American firms. … Chinese firms remain dependent on foreign technologies and manual labor and have a rudimentary level of automation and digitization: on average Chinese enterprises have just nineteen robots per ten thousand employees; U.S. firms, by contrast, use an average of 176 robots per ten thousand employees.

But isn’t China sprinting to overtake the United States? Yes, but it’s stumbling badly in that pursuit. China now leads the world in retractions of scientific studies due to fraud; one-third of Chinese scientists have admitted to plagiarizing or falsifying results (versus 2 percent of U.S. scientists); and two-thirds of China’s R&D spending has been lost to corruption.

Beckley’s clarifying theoretical insight: Repression is expensive

The Chinese military’s first and paramount mission is preserving the power of the Chinese Communist Party against China’s own people. The U.S. military can focus entirely on external threats.

The lines that plot the comparative GDP of the United States and China distort the real balance of power between the two societies, Beckley argues, because China must devote such a large share of its resources to basic subsistence needs to avert the overthrow of the state.

this might be a useful moment to hear a contrary voice. In 2018, the Tufts University professor Michael Beckley published a richly detailed study of Chinese military and economic weaknesses. The book is titled Unrivaled: Why America Will Remain the World’s Sole Superpower.

Nineteenth-century China faced an average of 25 local uprisings a year. Most of its troops had to be deployed to suppress rebellions and control banditry, leaving few available for war-fighting.

A final piece of the answer is that technological copycats face huge disadvantages against technological innovators. They will always lag behind the more creative rival, not only in the factory, but on the battlefield. “Repeatedly during the Opium Wars … Chinese armies of thousands were routed in minutes by a few hundred, or even a few dozen, British troops,”

Beckley seeks to highlight the immense defects of gross GDP as a measure of national strength—factoring in the costs of repression—and the strategic predicament of China’s location, barred from the open ocean by a ring of potential enemies on its eastern front, extending from Russia, through Korea, past Japan, to the Philippines, and then to Vietnam.

He said that he had become more alarmed by China’s aggressive and repressive intentions, but remained as dubious as ever about Chinese capacities.

Sanders lost the nomination, but he won the debate within the Democratic Party over trade policy. In his address, Biden committed to extending and enlarging “Buy American” favoritism in government procurement. His administration is maintaining Trump’s anti-China tariffs and is “reviewing”—not yet removing—tariffs against the European Union and other trade partners. Biden economic advisers warned during his campaign that trade expansion would rank low on their list of priorities, and so it is proving.

The Trump administration raised the defense budget by more than $100 billion a year, and the spending increases have continued even after the campaign against ISIS came to an end. More and more of the money is being directed to preparations for a conflict with China.

China’s language and behavior is assertive and provocative, for sure. China’s power is rising, yes. Its behavior at home and abroad is becoming more oppressive and more brutal; that’s also tragically true.

as Americans muster the courage and will to face Chinese realities, that reckoning needs also to appreciate the tremendous capabilities of this country, and the very real limits besetting China: a fast-aging population, massive internal indebtedness, and a regime whose worsening repression suggests its declining popularity.

two deep truths about Chinese society: It’s about to be home to a lot of old people, and trust in the state is very low, and for good reason.

As China’s population ages, it will deplete its savings. Chinese people save a lot to compensate for the state’s meager social-security provision. For three decades, the savings of ordinary people financed the spectacular borrowing of China’s state-owned enterprises

What happens as the savings are withdrawn to finance hundreds of millions of retirements? Again—who knows?

China misallocates capital on a massive scale. More than a fifth of China’s housing stock is empty—the detritus of a frenzied construction boom that built too many apartments in the wrong places

China overcapitalizes at home because Chinese investors are prohibited from doing what they most want to do: get their money out of China. Strict and complex foreign-exchange controls block the flow of capital

More than one-third of the richest Chinese would emigrate if they could, according to research by one of the country’s leading wealth-management firms. The next best alternative: sending their children out. Pre-pandemic, almost 1 million young Chinese attended Western universities. Pre-pandemic, only about 10,000 Americans were studying in China; single thousands were from other Western countries—and almost all of them were in the country to study language, not any academic specialty.

U.S. policy makers should look to the future with a little more confidence and a lot more trust in trade, markets, and the superior potential of a free people under an elected government.

With so many needs met, economists estimate China now has to invest about $9 to produce each dollar of GDP growth, up from less than $5 a decade ago, and a little over $3 in the 1990s.

Returns on assets by private firms have declined to 3.9% from 9.3% five years ago, according to Bert Hofman, head of the National University of Singapore’s East Asian Institute. State companies’ returns have retreated to 2.8% from 4.3%.

China’s labor force, meanwhile, is shrinking, and productivity growth is slowing. From the 1980s to the early 2000s, productivity gains contributed about a third of China’s GDP growth, Hofman’s analysis shows. That ratio has declined to less than one sixth in the past decade.

Changing that would require China’s government to undertake measures aimed at encouraging people to spend more and save less. That could include expanding China’s relatively meager social safety net with greater health and unemployment benefits.

Much of the debt was incurred by cities. Limited by Beijing in their ability to borrow directly to fund projects, they turned to off-balance sheet financing vehicles whose debts are expected to reach more than $9 trillion this year,

only about 20% of financing firms used by local governments to fund projects have enough cash reserves to meet their short-term debt obligations, including bonds owned by domestic and foreign investors.

The most obvious solution, economists say, would be for China to shift toward promoting consumer spending and service industries, which would help create a more balanced economy

Household consumption makes up only about 38% of GDP in China, relatively unchanged in recent years, compared with around 68% in the U.S.,

The solution for many parts of the country has been to keep borrowing and building. Total debt, including that held by various levels of government and state-owned companies, climbed to nearly 300% of China’s GDP as of 2022, surpassing U.S. levels and up from less than 200% in 201

i and some of his lieutenants remain suspicious of U.S.-style consumption, which they see as wasteful at a time when China’s focus should be on bolstering its industrial capabilities and girding for potential conflict with the West, people with knowledge of Beijing’

The leadership also worries that empowering individuals to make more decisions over how they spend their money could undermine state authority, without generating the kind of growth Beijing desires.

A plan announced in late July to promote consumption was criticized by economists both in and outside China for lacking details. It suggested promoting sports and cultural events, and pushed for building more convenience stores in rural areas.

Instead, guided by a desire to strengthen political control, Xi’s leadership has doubled down on state intervention to make China an even bigger industrial power, strong in government-favored industries such as semiconductors, EVs and AI.

While foreign experts don’t doubt China can make headway in these areas, they alone aren’t enough to lift up the entire economy or create enough jobs for the millions of college graduate

a speech made by Xi six months earlier to senior officials, in which the leader emphasized the importance of focusing on long-term goals instead of pursuing Western-style material wealth. “We must maintain historic patience and insist on making steady, step-by-step progress,” Xi said in the speech. 

The economy that Hickel envisions would cease to pursue growth, green or otherwise. Materials and energy will still be consumed, and waste generated, but at much lower levels. All impacts on the natural world will be tethered to the question, “Growth for whom, and to what ends?” In place of an individualistic consumer economy, Hickel’s post-growth economy would direct itself toward the creation of public goods that allow the many to live well—mass transit, health care—rather than to keep a few in luxury.

A growing body of research reveals an inverse relationship between “happiness” and growth beyond a certain point.

In the rich countries, general contentment peaked in 1950, when GDP and real per capita incomes were fractions of their present size (and inequality near modern historic lows); degrowthers posit that similar happiness levels will be reclaimed on the way back down the economic mountain

Hickel describes a post-growth economy defined by stability and equality, and the freedom and leisure possible when the economy is no longer subservient to the god of growth

He estimates that the U.S. economy could be scaled down by as much as 65 percent while still improving the lives of its citizens. This includes the metric most often tied to celebrations of endless growth: life expectancy.

degrowth will entail a steep reduction across a much wider range of high-energy consumer goods. Keeping a global economy within safe ecological limits is a zero-sum game.

When limited resources are directed toward clean energy infrastructure, public health care, and regenerative agriculture, it will still be possible to build and power modern 24-hour hospitals in every city, but not to have Xbox consoles, two-car garages, and giant appliances in every home.

would have to redefine it, too.

The post-growth economy could not succeed solely by redistributing wealth; it would have to redefine it, too.

He argues that short-term growth would have to continue in those countries that have still not achieved the basic levels of sanitation, infrastructure, and education needed for a decent standard of living, to close the gap. Their larger goal, meanwhile, would be to break free from their historical role as a source of natural resources and cheap labor for the north.

For degrowth to be just, global, and effective, the sharpest reduction in consumption will have to come from the north, where the greatest damage to the planet is currently being done

Ecological economists generally agree that the safe outer limit is eight tons

One person in a low-income country has a materials footprint of roughly two tons per year, a measure of total raw materials consumed, including those embodied in imports. In lower-middle–income countries, that number is four tons; in upper-middle–income countries, 12 tons. In the high-income nations of North America, Europe, and Asia, the number leaps to 28

The wealthiest 20 percent of the human population is responsible for 90 percent of “overshoot” carbon in the atmosphere (that is, a level of carbon that exceeds the limit needed to keep global temperature rise below 2 degrees Celsius)

The planet’s richest one percent has a carbon footprint twice the size of the poorest half of the world’s population combined

For the global north, degrowth not only starts at home, it starts with the biggest houses.

Less Is More doesn’t end in a poetic appreciation for nature’s majesty, but by teasing out its implications for the political project of preserving a habitable planet. Hickel devotes much of the book to explaining that degrowth must be central to this project, promising not just survival, but real democracy, social abundance, and liberation.

Both involve broad social shifts away from private consumption and toward the production of shared public goods.

This beautiful coincidence overlaps with policy programs like the Green New Deal in important way

In July 1979, shortly after installing a set of solar panels over the West Wing, Jimmy Carter did something peculiar for a peacetime president. He asked Americans to sacrifice: to consume less, take public transit more, value community over material things, and buy bonds to fund domestic energy development, including solar

Next to Schumacher’s “Buddhist economics,” Debsian socialism was reformist tinkering. Schumacher didn’t see liberation as a matter of reshuffling the ownership and management structures of the smokestack-powered growth economy. He believed a deeper transformation was needed to maintain a livable planet. This would require new socioecological blueprints “designed for permanence.” As the left and the right battled for control over growth’s levers and spoils, Schumacher pointed out how both had become blind to the rise of growth as its own self-justifying, pan-ideological religion; its patterns of production and consumption, he observed, required “a degree of violence” that did not “fit into the laws of the universe.”

They determined that infinite growth was, in fact, impossible on a finite planet. Barring a major course correction, the team projected, growthism would result in an ecological systems breakdown sometime in the middle of the twenty-first century

This warning, detailed in the 1972 bestseller The Limits to Growth, has aged better than the scorn heaped on it

We are now witnessing what appears to be the beginnings of the collapse predicted nearly 50 years ago

In his new book, Less Is More, Jason Hickel, an anthropologist and journalist, attempts to bring a comprehensive critique of growth closer to the center of the conversation, arguing through a sweeping history of capitalism that it’s uncontrolled growth, not its controlled arrest and reversal, that is the preposterous concept.

This economic and political revolution was reinforced by a complementary scientific one that displaced the lingering animist cosmology of pre-capitalist Europe. The dualism of Francis Bacon and Descartes held reason to be distinct from and superior to matter.

The idea of limitless growth is a relatively recent one. In Less Is More, Hickel traces its origins to the enclosure of the European commons in the sixteenth century

Starving refugees were scattered and forced into a new economy defined by neo-feudal servitude and wage labor. Landowners, meanwhile, began amassing great stores of surplus wealth.

By the mid-1800s, a new “science” had arisen from these assumptions. Neoclassical economics fully abstracted the economy from the natural world. The economy was geared not toward the creation of a happy and prosperous society, but toward the perpetual growth of wealth as its own end, achieved in an inherently virtuous cycle of converting labor and resources into capital, to be accumulated and reinvested in faster and more productive conversions of labor and resources

This ideology subsumed and profaned notions about progress and morality held by the classical economists, until eventually the field even l

This process unfolded despite repeated warnings along the way. Classical economists like John Stuart Mill and, to a lesser extent, Adam Smith not only acknowledged the existence of natural limits to growth, but saw economic development as a phase; at some point, they believed, nations would create enough wealth to pursue other definitions of progres

the caveats issued by Simon Kuznets, father of the concept adopted in the twentieth century as growth’s universal and signature metric: gross domestic product. Kuznets, Hickel points out, “warned that we should never use GDP as a normal measure of economic progress,” because GDP does not distinguish between productive and destructive behavior

Most people encounter the growth debate, if they encounter it at all, through the idea of “green growth.

This is a vision for our collective future based on the belief that technological advance will drastically reduce the amount of raw materials needed to sustain growth—a process known as dematerialization—and “decouple” growing GDP from its ecological impacts.

boosters of the idea point to the transition by rich countries from manufacturing to service-based economies, as well as efficiency gains in energy and in the use of materials

The belief that green growth will save us, also known as “ecomodernism” or “ecopragmatism,” has become a trendy article of faith among elites who acknowledge climate change and the dangers of breaching ecological boundaries

n 2017, Barack Obama threw his support behind the idea in an article for Science magazine, maintaining that signs of decoupling in major economies “should put to rest the argument that combatting climate change requires accepting lower growth or a lower standard of living.”

The argument that capitalism can grow itself out of the present crisis may be soothing to those who like the world as it is. It also relies on the kind of accounting tricks and rejection of reality

By only counting the emissions created within a country that imports most of its cars, washing machines, and computers, you end up pushing the emissions related to their production off the books. When you factor them back in, the picture is much less green. A number of recent studies show no evidence of meaningful decoupling—in energy or materials—even as the world increases its use of renewable energy and finds ways to use some materials more efficiently.

Green growth, Hickel concludes, is an ecologically incoherent “fairy tale.”

consider what the ecomodernist position asks us to believe. The current system requires annual growth of roughly 3 percent to avoid the shock of recession. This means doubling the size of the economy every 23 years

he economy of 2000 must be 20 times larger in the year 2100, and 370 times larger in the year 2200.

Hickel is less interested in the macroeconomic details of this future than are growth critics based in economics departments, like Tim Jackson and Kate Raworth, and more focused on the leisure, security, and general human flourish

he makes an alluring case that degrowth does not require anything like the “command-and-control fiasco of the Soviet Union, or some back-to-the-caves, hair-shirted disaster of voluntary impoverishment.”

Attaining the benefits of the post-growth economy would, however, require what the present consumer society considers “sacrifices.

it’s not clear how many of them are ready to give up its superficial pleasures enabled by consumer debt

Among nations, there’s also the question of fairness: Wouldn’t it be unjust to impose degrowth across the world, when it’s disproportionately the countries of the global north that have spent centuries burning through the planet’s resources?

This output tracks to the one percent’s share of global wealth—a number equal to the GDP of the bottom 169 countries.

Even if you accept the argument that inequality would be best addressed by more centuries of trickle-down growth, you keep running up against the simple fact of its impossibility. Even just one more century of growth—which so far has shown no sign of taking a less destructive form—will require multiple earths

Hickel is serious about bringing the system critiques of E.F. Schumacher and others out of their traditional cloisters and into the streets, and has sought allies in this effort

emphasize what Hickel calls the “beautiful coincidence” of degrowth: that “what we need to do to survive is the same as what we need to do to have better lives.”

Both are internationalist in outlook, and see the world through a lens of climate justice as well as climate equilibrium.

that is, communicating the many benefits of moving beyond the insecurity and terrors of the current system, and building a new society that is sustainable, stable, democratic, and fundamentally better in every way.

That’s still well below the national median, but the conditions of the White population are dismal: a median household income of $24,800, only 41% with any post-high school education, and 30% living in poverty.

In a growing nationwide trend, the median household incomes of people of color, according to the U.S. Census Bureau, now exceed those of White people in nearly 200 of the 1,500 Republican-trifecta counties—those in which the party controls the governor’s office and both legislative chambers of state government (see Figure 1)

In the most telling statistics, White people in Antlers are nearly twice as likely to die by guns as Native Americans (see Figure 2). Compared with Whites nationally, Antlers Whites suffer excessive death rates from drugs and alcohol (1.3 times the national average), suicide (1.5 times), all violent deaths (1.8 times), homicide (2.5 times), and gunfire (2.6 times).

When I was growing up in Antlers 60 years ago and visited it 20 years ago, my family’s old block consisted of well-kept middle-class homes fronting yards for chickens and horses. On my latest visit in January 2022, I found the houses all boarded up or blowing open in the wind (see photo at top). There are hundreds of abandoned dwellings with collapsing roofs and walls and junk-filled empty lots alongside barely intact, yet still occupied, houses.

Antlers is not all devastation, however. It sports a gleaming Choctaw-built travel center financed by casino revenues, which are also invested in local Native Americans’ well-being.

Across America, the partisan gap in gross domestic product per capita is also huge and growing: $77,900 in Democratic-voting areas, compared with $46,600 in Republican-voting areas

444 Republican counties have a GDP per capita of under $30,000, and 10 times as many people live in those counties than in the seven similarly low-GDP Democratic counties.

Whites in about 40% of all Republican counties lost income over the past two decades. And Trump’s administration was no help to his base. During his presidency, the overall Democrat–Republican GDP per capita gap widened by another $1,800.

For the largest urbanized states, the three with Democratic control of all branches of government (California, New York, and Illinois) had GDPs per capita vastly higher than the three biggest Republican-controlled states (Texas, Florida, and Ohio).

The right-wing canard that hardworking White people subsidize welfare-grubbing cities is backward. Democrat-voting counties, with 60% of America’s population, generate 67% of the nation’s personal income, 70% of the nation’s GDP, 71% of federal taxes, 73% of charitable contributions, and 75% of state and local taxes.

Mirroring Antlers, White Republican America also suffers violent death rates, including from suicide, homicide, firearms, and drunken driving crashes, far higher than Whites in Democratic America and higher than non-White people everywhere.

To top it off, Republican-governed Americans are substantially more likely to die from COVID-19.

As the death gap between Republican and Democratic areas widens over time, the life expectancy for Whites in Republican-voting areas (77.6 years) is now three years shorter than that of Whites in Democratic areas (80.6 years), shorter than those of Asians and Latino people everywhere, and only a few months longer than Black and Native Americans in Democratic areas.

That White people are falling behind across key economic, health, and safety indexes is not due to victimization by immigrants and liberal conspiracies, however, but to victimization by other Whites and self-inflicted alcoholism, drug overdose, and suicide.

Aside from the problem that Republican members of congress (and two recalcitrant Democrats) have sabotaged beneficial initiatives, former President Barack Obama already tried that. From 2010 to 2016, the Obama administration’s economic recovery measures fostered millions of new jobs and thousands of dollars in real median income growth for Whites in urban and most rural areas alike, reversing the recession under Republican George W. Bush’s presidency.

Is the solution to undividing America massive federal programs to improve Republican America’s struggling economies and troubled social conditions, then?

But while those are huge numbers by any measure (world GDP is around $100 trillion), they aren’t big enough to motivate most leaders to justify mitigation, which will also cost a whole lot of money.

To put it in terms the authors use, the recently enacted Inflation Reduction Act will cost Americans roughly $80 per ton of carbon emissions avoided, and while each ton not pumped into the atmosphere would save the world $200 as a whole, it would only save Americans about $40 of that $200, making it feel to some altruistic but not self-evident in purely economic terms.

In their new paper, economists Adrien Bilal of Harvard and Diego Känzig of Northwestern take a fresh look at the data

They show that the social cost of carbon is likely far bigger — six times bigger — than previously estimated: losses of more than $1,000 per ton, or around 12 percent of world GDP per degree of warming.

— roughly equivalent to the economic drag on big economies if they were permanently at war.

Suddenly, that $80 Americans are spending on reducing one ton of carbon emissions is netting them $200 or so in U.S. economic activity.

Bilal and Känzig argue that it’s very much worth it for countries of means to spend the money now to avoid much greater costs down the line

the potential losses are so vast it makes sense for these countries to go ahead and act on their own to avoid climate change losses, even if other nations do nothing.

What’s different about your methodology and how did it lead you to the numbers you've come up with?

Adrien Bilal: So virtually all of the previous work that's been done on the subject has relied on comparisons of different countries that heat up or cool down at different points in time. The U.K. gets a little hotter in one year, and then Germany stays cool. And then you look at how GDP in the U.K. evolves following that change in temperature.

that generally gives you numbers in the vicinity of $150 per ton of carbon emitted and a 2 percent decline in GDP per degree Celsius in warming

we think that is quite different from what climate change is actually doing to the world. It's not only that the U.K. is going to heat up a little more than Germany, but the whole world is heating up because of climate change. And, in particular, oceans are also heating up. And when the whole planet warms, that has potentially really different implications for the climate system, increased frequency of extreme weather events that then have big local impacts. 

that's actually what geoscientists have been telling us for a long time, but it simply hadn't percolated into economics. And so we took that perspective very seriously and thought, "Well, what happens when we basically compare years where the world is very hot to years where the world is cooler?" And that gives you a much larger effect of climate change on the economy.

A survey of 43 countries, published on October 30th, found that people in emerging markets are within a whisker of expressing the same level of satisfaction with their lives as people in rich countries.

While Scrooge found it easy to count his riches, happiness is harder to pin down. People are prone to what philosophers call “adaptive preferences”, meaning that they may fail to report their “true” happiness

If measuring happiness is so difficult, what else could economists look at? Amartya Sen, of Harvard University, argues that “capabilities” are the way to go. The definition of a capability is a bit fuzzy: at its simplest, a capability is something that people have reason to value. The list of potential capabilities is endless: the opportunity to live a long and healthy life, the freedom to take part in political life or to be well nourished.

Capabilities, says Mr Sen, are ends that economists should strive to maximise: income is just one of the many means by which we get there.

That begs the question of which capabilities a society should maximise. Some worry that the capability approach is deeply paternalistic

Ms Nussbaum goes so far as to recommend “ten central capabilities” that are essential for a good life. For economists, who tend to be lovers of freedom, this is controversial stuff.

But the capability approach may be less illiberal than it seems. Insisting that GDP is the true measure of economic progress is itself a value-judgment. What is more, according to Mr Sen and Ms Nussbaum, people must have the freedom to select which capabilities they ultimately pursue.

Measuring capabilities may be even more difficult than measuring GDP or happiness. There are, though, decent proxies. A country with a high life expectancy probably offers its citizens things like good health care and helps to shield them from pollution, which makes it easier for them to live a long, healthy life.

Some measures of economic success use such data. The Human Development Index (HDI), which Mr Sen helped to devise in 1990, considers not only income, but also life expectancy and schooling, as elements of development

the capability approach has spawned so many measures, each more complicated than the last, that GDP starts to look appealing again. What other single number can give a decent approximation of quality of life?

While Japan and Germany’s economies might be considered very large by developed country standards, these countries are not economic giants

n addition to being as big as continental Europe’s three largest economies put together, China’s economy is about 55 percent the size of the United States’ in current U.S. dollars

It is also, in U.S.-dollar terms, one and a half times the size of the other three so-called BRIC economies combined (Brazil, Russia, India and China),

it is adding another $1 trillion to global GDP every year. I often point out to people that China is adding another India to the world economy every two years.

What about the other BRIC countries? Some years after I first coined the acronym in 2001, I suggested that a BRIC economy should be regarded as one that was already producing or had the clear potential to produce 5 percent of global GDP or more. China’s is the only one that qualifies

Today, the economies of Brazil, India and Russia are all generating around 3 percent of global GDP, similar to Italy. But the countries’ big populations and reforms to lift productivity still mean their economies have a reasonable chance of going above that 5 percent threshold. They may someday become giants.

It is already the major trading partner for many countries — both exports and imports — and I would expect that before this decade is over, possibly quite a bit before, China will replace the United States as the world’s largest importer.

I am quite confident that India will make this leap — its economy has a really good chance of becoming the world’s third-largest before 2040. The country has exceptionally favorable demographics, and in electing Prime Minister Narendra Modi, India has given itself the best chance in at least 30 years of being run by a government that is not smothered by its democracy but flourishes instead

Brazil and Russia’s economies have different reasons for their recent disappointments, but they share a common dilemma: They are too dependent on volatile commodities.

Brazil’s economy in particular needs to change course, whatever the country’s political leadership. The government has to create incentives and room for much more private sector investment and it needs to stop using directives to run so much of the economy.

Of the rest of the world’s largest populated countries, I believe none has a realistic chance of producing 5 percent of global GDP or more, but there are a few that could reach the 3-5 percent range, or more than Italy, which currently has the world’s eighth-largest economy. Mexico, Indonesia, Nigeria and Turkey — the so-called MINT economies — along with the more developed South Korea, have this chance.

“If the world is to cope with climate change, policymakers will need to pull every lever at their disposal,” he writes. “Faced with this threat, to indulge in the idea that central banks, as key agencies of the state, can limit themselves to worrying about financial stability … is its own form of denial.”

In England, by contrast, Carney has convened 33 central banks to investigate how to “green the financial system.” According to Axios, every powerful central bank is working with him—except for Banco do Brasil and the Fed.

Mark Carney, the governor of the Bank of England, in 2015, in a speech which has subsequently received massive coverage—and he is a man, after all, absolutely of the global financial establishment—coined the idea of a climate Minsky moment. [Editor’s note: A Minsky moment is when an asset’s price suddenly collapses after a long period of growth.]

We would need [fossil-fuel assets] to be on the balance sheet of actors who were under huge pressure in a fire-sale situation and who couldn’t deal with a sudden revaluation. We would need an entire network of causation to be there, which is what produced the unique crisis of 2007 to 2008.

So imagine that we stay on our current path, and we’re headed toward 3 or 4 degrees’ [Celsius] temperature change. And then imagine some of the nonlinearities kick in, which the climate scientists tell us about, and we face a Fukushima-style event.

What happens next? You then get nervous democratic politicians—and not necessarily those who are known for their populism, but just nervous democratic politicians—suddenly deciding that we have to stop doing one or another part of our carbon-based economy. It has to stop, and it has to stop immediately. And then you get big shocks. Then you get sudden revaluations.

In other words, the success of the delaying tactics of the carbon lobby create a situation in which we’re then faced with the possibility of a sudden regulatory shock

“One-third of equity and fixed income assets issued in global financial markets can be classified as belonging to the natural resource and extraction sectors, as well as carbon-intensive power utilities, chemicals, construction, and industrial goods firms.”

Whether that will, in fact, ease the formation of majorities in Congress is another question. Because, after all, it does somehow have to get through the Senate, you know.

Germany is far, far more exposed. A huge slice of their economy is basically all about internal combustion engines, and so that number includes all of those stocks, for sure.

If we saw a huge shock to, say, European equity [exchange-traded funds], which were heavily in German automotive, that’s the sort of trigger that we might be looking at.

This is not simply a zero-sum game; this is a structural transformation that has many very attractive properties. There’s loads of excellent jobs that could be created in this kind of transition.There’s no reason why, even by conventional GDP-type metrics, it need even be associated with the kind of feel-bad factor of slow GDP growth. Then [you could] also link it to a revival of social democracy for the United States. From a progressive political point of view, that’s obviously extremely attractive.

there’s also a deeper view: that climate change is the situation within which all other politics will happen for the next several generations, at least.

ever since the 1990s that’s been the logjam on any serious American commitment.

When you look at a third of securities tied up in the carbon economy and the evidence for decoupling GDP growth from carbon emissions maybe not being as strong as we’d like, do you think the change that needs to happen is realistic?

Tooze: Realistic? No. I mean, depends what you mean by realism. The scale of the challenge requires a boldness of action for which there is no precedent. That’s the only good purpose that the war analogies serve

Meyer: In your piece, you write: “Those in the United States who call for a Green New Deal or a Green Marshall Plan are, if anything, understating the scale of what is needed.”

Do you think climate action needs to be larger than, say, the U.S. mobilization for World War II?

Tooze: Well, less large in absolute terms. Because even the U.S. was spending almost 40 percent of GDP on World War II. And if you’re the Soviet Union, you’re spending 55 to 60 percent in 1940. We don’t need to do anything like that. It needs to be much bigger than the New Deal, which in fiscal-policy terms was really quite trivial.

Crucially, what makes it totally unlike the war is that there’s no happy end. There’s no moment where you win and then everything goes back to the way it was before, but just better. That’s a misunderstanding

This isn’t crash dieting; this is a permanent change in lifestyle, and we need to love that and we need to live it and we need to own it and we need to reconcile ourselves to the fact that this is for us and for all subsequent generations of humans.

It isn’t just the oil and gas majors, because they wouldn’t get you to 30 percent. Exxon isn’t big enough to get you to that kind of percentage. It’s Exxon, and [the major automakers] Daimler and BMW, and the entire carbon-exposed complex.

all the really hard choices need to be made by people like China and India and Pakistan and Bangladesh and Indonesia

You don’t have that very much in Germany. There isn’t anyone in Germany saying, “Which bit of mid-20th-century history is this most like?,” mercifully. The one analogy that has popped up in Germany is reunification, which I actually think is quite a good one, because that’s still an ongoing problem

in the American case, it would be civil rights and Reconstruction, which isn’t a particularly optimistic comparison to draw. It’s an ongoing problem, it’s a deep historic problem, it only happened once, we still haven’t fixed it, and we’re not at peace.

Meyer: There’s a kind of shallow view of climate change: that it is something we need to avert or stop. And that’s somewhat true

furthermore—and much more fundamentally than any of those things—this isn’t really about America. I mean, America can be an obstacle and get in the way, but none of the really hard choices needs to be made by Americ

like Reconstruction or the civil-rights movement, it needs to be something that people take on like a moral commitment, in the same way they take on genocide prevention as a moral commitment

problems that we thought we’d fixed, like the Green Revolution and the feeding of the world population, for instance—totally not obvious that those fixes cope with the next 20 years of what’s ahead of us. The food problem that was such an oppressive issue globally in the 1970s may resurge in an absolutely dramatic way.

Meyer: Given all that, if Jerome Powell decided that he wanted to intervene on the side of climate action, what could he do? What could the Fed do?

Tooze: What I think the Fed should announce is that it enthusiastically supports the idea of a bipartisan infrastructure push focused on the American electrical network, first and foremost, so that we can actually hook up the renewable-generating capacity—which is now eminently, you know, realistic in economic terms. Setting a backstop to a a fiscal-side-led investment push is the obvious thing.

It is indeed a highly appropriate response to an environment of extremely low interest rates, and [former Treasury Secretary] Larry Summers & Co. would argue that it might help, as it were, to suck us out of the state of secular stagnation that we’re in.

another avenue to go down—for the Fed to take a role in helping develop a classification of green bonds, of green financing, with a view also to rolling out comprehensive demands for disclosure on the part of American firms, for climate risks to be fully declared on balance sheets, and for due recognition to be given to firms that are in the business of proactively preparing themselves for decarbonization.

You could, for instance, declare that the Fed views with disfavor the role of several large American banks in continuing to fund coal investment. Some of the carbon-tracking NGOs have done very good work showing and exposing the way in which some of the largest, the most reputable American banks are still in the business of lending to Big Coal. Banking regulation could be tweaked in a way that would produce a tilt against that.

the classic role of the Fed is to support government-issued debt. Insofar as the Green New Deal is a government-issued business, the Fed has just an absolutely historical warrant for supporting fiscal action.

with regards to the broader economy, the entire federal-government apparatus essentially stood behind the spread of home ownership in the United States and the promotion of suburbanization through the credit system. And kind of what we need is a Fannie Mae and Freddie Mac for the energy transition.

if the question is, Is there historical warrant for the financial agencies of government in the United States biasing the property structure in the economy in a certain way?, the answer is emphatically yes—all the way down to the grotesque role of the New Deal financial apparatus in enshrining the racial segregation of the American urban space, with massive effects from the 1930s onward.

The idea of neutrality should not even be allowed in the room in this argument. It’s a question of where we want to be biased. If you look at QE, especially in the U.K. and the EU, it was effectively fossil-biased.

monetary policy is not neutral with regards to the environment. There’s no safe space here. The only question is whether you’re going to lead in the right way

Meyer: Last question. With any of this, is there a role for interested Americans to play if they are not particularly tied to the financial- or monetary-policy elite?

Tooze: Support your congressperson in doing exactly what AOC did in the hearings with Powell a couple of weeks ago

[Editor’s Note: Representative Alexandria Ocasio-Cortez asked Powell whether inflation and unemployment are still closely connected, as the Fed has long argued.]

Applaud, follow with interest, raise questions. That’s exactly what needs to be happening. The politicization of monetary policy is a fact.

If we don’t raise these questions, the de facto politics is, more often than not, conservative and status quo–oriented. So this, like any other area, is one where citizens—whether they’re educated and informed or not—need to wise up, get involved, and follow the arguments and develop positions.

So applaud your congresspeople when they do exactly what AOC was doing in that situation. In many ways, I thought it was one of the most hopeful scenes I’ve seen in that kind of hearing in a long time.

The number of workers filing initial claims for unemployment insurance fell by 40,000 to 751,000 last week to the lowest level since the pandemic began, suggesting layoffs are easing despite a rise in coronavirus infections. The U.S. as of September has recovered about half of the 22 million jobs lost in March and April, at the beginning of the pandemic.

which reflects business spending on software, research and development, equipment and structures—rose at a 20.3% annual rate. Spending on equipment rose, although spending on structures, a category tied to the struggling oil and gas sector and commercial real estate, fell at a 14.6% annual rate.

JPMorgan Chase & Co.’s tracker of credit and debit-card transactions showed that spending was down 5.2% from a year earlier in the week through Oct. 25.

Consumer spending, which accounts for more than two-thirds of U.S. economic output, increased at a 40.7% annual rate in the third quarter.

On average they expect that the economy will contract 3.6% this year, measured from the fourth quarter of 2019.

Third-quarter revenue is up 44% from a year earlier, following an initial drop in business in March and April when customers were reluctant to have work crews in their homes, he said.

With much of the world in recession, exports of everything from iron ore to coal to gold took a hit in the month.

On the import side the biggest swing was in tourism as globe-trotting Australians were barred from going abroad due to the pandemic.

That saw debits on tourism shrink to just A$49 million in April from A$2.8 billion in March and A$4.3 billion in February, boosting the monthly trade balance.

Analysts are predicting Australia’s gross domestic product (GDP) could fall roughly 8% in the current quarter, with the dive in April retail sales alone subtracting 2.1 percentage point off GDP.

That would leave the economy facing its first recession in nearly three decades following the 0.3% contraction last quarter.

for any closet revolutionary who has ever dreamed of overthrowing the present economic order in favour of one a little less likely to cause Italian pensioners to hang themselves in their homes, this work should be of particular interest. Because it makes the ditching of that cruel system in favour of something new (and perhaps, with lots of work, better) no longer a matter of mere ideological preference but rather one of species-wide existential necessity.

Anderson points out that we have lost so much time to political stalling and weak climate policies – all while global consumption (and emissions) ballooned – that we are now facing cuts so drastic that they challenge the fundamental logic of prioritising GDP growth above all else.

Anderson and Bows argue that, if the governments of developed countries are serious about hitting the agreed upon international target of keeping warming below 2° Celsius, and if reductions are to respect any kind of equity principle (basically that the countries that have been spewing carbon for the better part of two centuries need to cut before the countries where more than a billion people still don’t have electricity), then the reductions need to be a lot deeper, and they need to come a lot sooner.

To have even a 50/50 chance of hitting the 2° target (which, they and many others warn, already involves facing an array of hugely damaging climate impacts), the industrialised countries need to start cutting their greenhouse-gas emissions by something like 10 per cent a year – and they need to start right now.

a 10 per cent drop in emissions, year after year, is virtually unprecedented since we started powering our economies with coal. In fact, cuts above 1 per cent per year “have historically been associated only with economic recession or upheaval”, as the economist Nicholas Stern put it in his 2006 report for the British government.

Only in the immediate aftermath of the great market crash of 1929 did the United States, for instance, see emissions drop for several consecutive years by more than 10 per cent annually, according to historical data from the Carbon Dioxide Information Analysis Centre

If we are to avoid that kind of carnage while meeting our science-based emissions targets, carbon reduction must be managed carefully through what Anderson and Bows describe as “radical and immediate de-growth strategies in the US, EU and other wealthy nations”. Which is fine, except that we happen to have an economic system that fetishises GDP growth above all else, regardless of the human or ecological consequences, and in which the neoliberal political class has utterly abdicated its responsibility to manage anything (since the market is the invisible genius to which everything must be entrusted).

in order to appear reasonable within neoliberal economic circles, scientists have been dramatically soft-peddling the implications of their research. By August 2013, Anderson was willing to be even more blunt, writing that the boat had sailed on gradual change. “Perhaps at the time of the 1992 Earth Summit, or even at the turn of the millennium, 2°C levels of mitigation could have been achieved through significant evolutionary changes within the political and economic hegemony. But climate change is a cumulative issue! Now, in 2013, we in high-emitting (post-)industrial nations face a very different prospect. Our ongoing and collective carbon profligacy has squandered any opportunity for the ‘evolutionary change’ afforded by our earlier (and larger) 2°C carbon budget. Today, after two decades of bluff and lies, the remaining 2°C budget demands revolutionary change to the political and economic hegemony” (his emphasis).

there are many people who are well aware of the revolutionary nature of climate science. It’s why some of the governments that decided to chuck their climate commitments in favour of digging up more carbon have had to find ever more thuggish ways to silence and intimidate their nations’ scientists

If you want to know where this leads, check out what’s happening in Canada, where I live. The Conservative government of Stephen Harper has done such an effective job of gagging scientists and shutting down critical research projects that, in July 2012, a couple thousand scientists and supporters held a mock-funeral on Parliament Hill in Ottawa, mourning “the death of evidence”. Their placards said, “No Science, No Evidence, No Truth”.

Based on the current trajectory, war between the United States and China in the decades ahead is not just possible, but much more likely than recognized at the moment. Indeed, judging by the historical record, war is more likely than not.

A risk associated with Thucydides’s Trap is that business as usual—not just an unexpected, extraordinary event—can trigger large-scale conflict. When a rising power is threatening to displace a ruling power, standard crises that would otherwise be contained, like the assassination of an archduke in 1914, can initiate a cascade of reactions that, in turn, produce outcomes none of the parties would otherwise have chosen.

The preeminent geostrategic challenge of this era is not violent Islamic extremists or a resurgent Russia. It is the impact that China’s ascendance will have on the U.S.-led international order, which has provided unprecedented great-power peace and prosperity for the past 70 years. As Singapore’s late leader, Lee Kuan Yew, observed, “the size of China’s displacement of the world balance is such that the world must find a new balance. It is not possible to pretend that this is just another big player. This is the biggest player in the history of the world.”

More than 2,400 years ago, the Athenian historian Thucydides offered a powerful insight: “It was the rise of Athens, and the fear that this inspired in Sparta, that made war inevitable.

Note that Thucydides identified two key drivers of this dynamic: the rising power’s growing entitlement, sense of its importance, and demand for greater say and sway, on the one hand, and the fear, insecurity, and determination to defend the status quo this engenders in the established power, on the other.

However unimaginable conflict seems, however catastrophic the potential consequences for all actors, however deep the cultural empathy among leaders, even blood relatives, and however economically interdependent states may be—none of these factors is sufficient to prevent war, in 1914 or today.

Four of the 16 cases in our review did not end in bloodshed. Those successes, as well as the failures, offer pertinent lessons for today’s world leaders. Escaping the Trap requires tremendous effort

In 1980, China had 10 percent of America’s GDP as measured by purchasing power parity; 7 percent of its GDP at current U.S.-dollar exchange rates; and 6 percent of its exports. The foreign currency held by China, meanwhile, was just one-sixth the size of America’s reserves. The answers for the second column: By 2014, those figures were 101 percent of GDP; 60 percent at U.S.-dollar exchange rates; and 106 percent of exports. China’s reserves today are 28 times larger than America’s.

Could China become #1? In what year could China overtake the United States to become, say, the largest economy in the world, or primary engine of global growth, or biggest market for luxury goods?

Could China Become #1? Manufacturer: Exporter: Trading nation: Saver: Holder of U.S. debt: Foreign-direct-investment destination: Energy consumer: Oil importer: Carbon emitter: Steel producer: Auto market: Smartphone market: E-commerce market: Luxury-goods market:   Internet user: Fastest supercomputer: Holder of foreign reserves: Source of initial public offerings: Primary engine of global growth: Economy: Most are stunned to learn that on each of these 20 indicators, China has already surpassed the U.S.

Lee Kuan Yew, the world’s premier China watcher and a mentor to Chinese leaders since Deng Xiaoping. Before his death in March, the founder of Singapore put the odds of China continuing to grow at several times U.S. rates for the next decade and beyond as “four chances in five.

On whether China’s leaders are serious about displacing the United States as the top power in Asia in the foreseeable future, Lee answered directly: “Of course. Why not … how could they not aspire to be number one in Asia and in time the world?” And about accepting its place in an international order designed and led by America, he said absolutely not: “China wants to be China and accepted as such—not as an honorary member of the West.”

As the United States emerged as the dominant power in the Western hemisphere in the 1890s, how did it behave? Future President Theodore Roosevelt personified a nation supremely confident that the 100 years ahead would be an American century. Over a decade that began in 1895 with the U.S. secretary of state declaring the United States “sovereign on this continent,” America liberated Cuba; threatened Britain and Germany with war to force them to accept American positions on disputes in Venezuela and Canada; backed an insurrection that split Colombia to create a new state of Panama (which immediately gave the U.S. concessions to build the Panama Canal); and attempted to overthrow the government of Mexico, which was supported by the United Kingdom and financed by London bankers. In the half century that followed, U.S. military forces intervened in “our hemisphere” on more than 30 separate occasions to settle economic or territorial disputes in terms favorable to Americans, or oust leaders they judged unacceptable

When Deng Xiaoping initiated China’s fast march to the market in 1978, he announced a policy known as “hide and bide.” What China needed most abroad was stability and access to markets. The Chinese would thus “bide our time and hide our capabilities,” which Chinese military officers sometimes paraphrased as getting strong before getting even.

With the arrival of China’s new paramount leader, Xi Jinping, the era of “hide and bide” is over

Many observers outside China have missed the great divergence between China’s economic performance and that of its competitors over the seven years since the financial crisis of 2008 and Great Recession. That shock caused virtually all other major economies to falter and decline. China never missed a year of growth, sustaining an average growth rate exceeding 8 percent. Indeed, since the financial crisis, nearly 40 percent of all growth in the global economy has occurred in just one country: China

What Xi Jinping calls the “China Dream” expresses the deepest aspirations of hundreds of millions of Chinese, who wish to be not only rich but also powerful. At the core of China’s civilizational creed is the belief—or conceit—that China is the center of the universe. In the oft-repeated narrative, a century of Chinese weakness led to exploitation and national humiliation by Western colonialists and Japan. In Beijing’s view, China is now being restored to its rightful place, where its power commands recognition of and respect for China’s core interests.

Last November, in a seminal meeting of the entire Chinese political and foreign-policy establishment, including the leadership of the People’s Liberation Army, Xi provided a comprehensive overview of his vision of China’s role in the world. The display of self-confidence bordered on hubris. Xi began by offering an essentially Hegelian conception of the major historical trends toward multipolarity (i.e. not U.S. unipolarity) and the transformation of the international system (i.e. not the current U.S.-led system). In his words, a rejuvenated Chinese nation will build a “new type of international relations” through a “protracted” struggle over the nature of the international order. In the end, he assured his audience that “the growing trend toward a multipolar world will not change.”

Given objective trends, realists see an irresistible force approaching an immovable object. They ask which is less likely: China demanding a lesser role in the East and South China Seas than the United States did in the Caribbean or Atlantic in the early 20th century, or the U.S. sharing with China the predominance in the Western Pacific that America has enjoyed since World War II?

At this point, the established script for discussion of policy challenges calls for a pivot to a new strategy (or at least slogan), with a short to-do list that promises peaceful and prosperous relations with China. Shoehorning this challenge into that template would demonstrate only one thing: a failure to understand the central point I’m trying to make

What strategists need most at the moment is not a new strategy, but a long pause for reflection. If the tectonic shift caused by China’s rise poses a challenge of genuinely Thucydidean proportions, declarations about “rebalancing,” or revitalizing “engage and hedge,” or presidential hopefuls’ calls for more “muscular” or “robust” variants of the same, amount to little more than aspirin treating cancer. Future historians will compare such assertions to the reveries of British, German, and Russian leaders as they sleepwalked into 1914

The rise of a 5,000-year-old civilization with 1.3 billion people is not a problem to be fixed. It is a condition—a chronic condition that will have to be managed over a generation

Success will require not just a new slogan, more frequent summits of presidents, and additional meetings of departmental working groups. Managing this relationship without war will demand sustained attention, week by week, at the highest level in both countries. It will entail a depth of mutual understanding not seen since the Henry Kissinger-Zhou Enlai conversations in the 1970s. Most significantly, it will mean more radical changes in attitudes and actions, by leaders and publics alike, than anyone has yet imagined.