Tuesday 23 August 2022

The decline and rise of the West


I do not have a great rapport with economics, but I am listening to a very interesting interview of Dr Steve Davies, an historian at the Institute of Economic Affairs. 

He is a monetarist who thinks things will be hard for the west for the next decade or longer, but ultimately will be peachy. 

Inflation isn't anything to do with the price of oil. (He didn't mention that Switzerland and Japan have 2 percent inflation.)

He blames the current crisis on European and American folly. I suppose he means the war. He thinks European countries have themselves to blame for not standing up to the USA at the Bucharest conference in 2008. He means George W. Bush's announcement that Ukraine and Georgia would join Nato.

How disastrous the Americans are as the world's policeman. 

Sanctions are hurting the West more than Russia but they are hitting Russians. Nevertheless Russians have come behind the invasion and see the conflict as existential. Most countries are not imposing sanctions and financial Sanctions have much less effect than America expected. As Russia depends on exporting commodities it is less vulnerable to sanctions than more sophisticated economies.

Nuclear energy is important but not the silver bullet for the West. We shall continue to use a lot of oil and gas, but Dr Davies thinks we might use much less energy in the future, as  happened in the mid-1970s in the West.

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