 This is Rob Johnson, President Institute for New Economic Thinking. I'm here today with Adam Tuus, Professor of History and the Director of the European Institute at Columbia University. Today, we're gonna talk about his book, Shut Down, How COVID Shook the World, or the world's economy, I should say. It shook the world, but a lot of times, I find that historians look back and project forward with selective interpretation of the evidence based on what they want. He has a much broader lens, and so I really look forward to talking with you. Thanks for joining me today, Adam. Pleasure to be here. So, let's start with, you mentioned a whole constellation of problems, but COVID shows up on stage, and whether it's climate, racial injustice, economic inequality, the globalization and balance of power in the world, or disease itself. How do you tell us your vision? First of all, what inspired you to write the book? What brought it to you? Well, kind of, it was a book written almost out of necessity, to be honest. It wasn't my plan. I mean, like everyone else, practically everyone else in the world, I imagine that COVID totally derailed my life. It derailed my family's life, my circumstances of living in New York, and it was embarked on a book about the political economy of climate, which will be the next book that I do after shutdown, but found, as it were, history catching up with me, because I'd done this narrative of 2008, which was itself, of course, the stilled-out of the reportage of journalists, economists, think tanks, bank economists, and so on, and had become quite influential as a way of thinking about 2008. And all of a sudden, as you know, in the second week of March 2020, we started seeing eruptions in the financial markets, in Treasury repo in particular, that were frankly terrifying, were immediately legible in terms of the schema which people in macrofinance, critical macrofinance, had developed for understanding 2008-9. And I just, my life was just taken over by commentary, chatting with journalists, friends, economists, about the urgency of this crisis. And at some point, I just, the tension between living the 2008 crisis, sorry, living the 2020 crisis, whilst attempting to research the energy policies of Carter, just, hey, it was impossible. And I'd never experienced that before, because I'll be honest, like, well, when 2008 was going on, I was writing about World War I, and I wasn't really paying attention. And what happened is, you know, the 2008 book, is it got caught up in the back draft of the Trump election and Brexit. And that book just didn't end on me. I couldn't close it out. And Duncan Weldon, who writes for The Economist now, teased me at the time, saying that you're gonna have to write an endless new edition, aren't you? And when, lo and behold, that's exactly what I found myself doing. So this book is really a response to that, light crashed, but even more directly, it grew out of almost daily commentary on events. And those readers who are familiar with either the geopolitical debates about American relations with China, or the Eurozone, who follow commentary on the emerging markets, Latin America in particular, but those most particularly who were deep in the action in the treasury markets in the spring of last year will recognize, I hope, the urgency of the conversation, which is still ongoing. The G30 just brought out effective recommendations for the reform of the treasury market a couple of weeks ago. And it's hard to exaggerate the importance of that, right? This goes way beyond Lehman, because the treasury market is the Alfa Romeo mega, the fundamental foundation, it's the safe asset for the global economy. And it gives you an indication of quite how serious this was that that was shaking. So 2020 for me, just once more, took the lid off. You know, if we, I mean, for me the challenge of history, writing in contemporary commentary is to grasp just the radicalism of the world that we're in. I mean, as you say, like, I'm shy about predicting the future, because I find the presence so overwhelming. And by way of the COVID crisis, we as it were, I think, lifted the lid on the cauldron that we're perched on top of. And the book tries to convey that sense of, well, I use this term poly crisis. Jean-Claude Juncker coined it. It's from Ed Gaumara, who's like a theorist of complexity. And Juncker was trying to capture the mass, the Eurozone, and Europe was in in 2015, where you had Ukraine and the refugee crisis and Greece and populism boiling up in Poland and Britain. And in a sense, this is an effort to understand a similar poly crisis in 2020. So let's talk, let's kind of zoom in on some of the different pieces. What did you find startling? What did you find positive? What did you find most disconcerting about the reaction to the COVID crisis? The response, I should say. Well, the surprise is the sheer scale of fiscal and monetary action. The disappointment is that we ended up needing it, right? So the disappointment is the total failure of public health in place after place around the world. If you look back, I mean, it's not fair to say that economists, I don't make this point in the book as strongly as I wish I had in retrospect, but if you look at, say, economists studying pandemics before 2020, and there were plenty of people who were, there's a paper actually co-authored by Larry Summers I think from 2018 that estimates the impact of a pandemic, a flu pandemic. One of the interesting things about those is they assume the mortality and the damage will be severest in low income countries and emerging market economies in terms of mortality. And so then they ratio up and they conclude that the economic damage will be modest. Whereas what we were confronted with in 2020 is the total failure of public health in the core elements of the global economy. First in China, and we shouldn't underestimate how serious that failure was, though they then managed to establish a grip on it better than other places. Then in Europe and then in the United States. So we took out what amounts to basically 60% plus of the global economy, even bigger share of trade and that's just a staggering shock. So then the reaction had to be big and the least you can say about it was it was prompt and large. And though of course the protagonists will go to their graves denying that there was any real explicit coordination of monetary and fiscal policy and so on de facto, it actually formed a fairly functionally integrated whole and not just within countries but globally. And that's as it were, the surprise, the positive news, the one big piece of positive news and it's integrally related to this. It's just a different sector of the economy is of course the vaccines story. So the fact that the pharma industrial complex when prodded, pushed, mobilized, adequately funded was able to deliver not one but like a whole suite of vaccines suitable for different contexts at different price points. You know, is remarkable testimony to what we have there if we want to mobilize it and we're sufficiently intelligent and capable of collective action to mobilize it. We have an incredible tool there. What we've seen since of course is the disappointing shambles of the failure to roll out. So those will be the three disappointment, surprise, you know, I mean really deeply impressive biotech, biomedical performance and then new disappointment out the end in a sense. Yeah, they rose to the challenge but they didn't get it injected to the system of the people all over the world which now is creating mutant variants that are flowing back and how would I say by saving a few billion dollars or protecting intellectual property rights we're gonna cost macro economies trillions more. I mean I'm not sure whether I buy the patent story. I mean I'm by no means an expert here but my sense is that the smart money says that patents are a huge symbolic issue and the fact that they've dug in their heels and they're trying to protect them is just like terrible politics. But the real bottleneck here is productive capacity which is a lot of embodied knowledge it's very difficult to do and the mistake for the fancy mRNA vaccines was not from the very beginning to go really big and say look we're gonna have to mass produce these all over the world. So they did that with AstraZeneca and it had the checkered history that it's had but they incorporated serum institute which is the world's biggest production capacity and what we really need clearly around the world are several more serum institutes low cost, high quality, emerging market, production hubs that can take expertise from around the world at world class level rapidly incorporated into production and then go. Serum isn't a groundbreaking research institute in its own right but it's totally groundbreaking in that it can do a billion doses in India. So what we need is six of those. Yeah, as they say, it's R and D, it's the D part of R and D. It's the D and the D and the P because this is all about production, right? It's, you have to take it all the way down and then of course what we need out the other end of that is logistics, supply and that's when it gets really complicated is you've got to put these on the ground and you've actually got to have systems that will deliver this and emerging market low income countries are perfectly capable of this. Like Rwanda's done a much better job than many other places at much higher levels of income but you do need to build the, in chain all the way. And then coming back to the macro stimulus this huge, like you said, the trillions of dollars. I know some people are concerned about the packages say of the Biden administration in the United States on the grounds of inflation. Others are more concerned about what you might call the opportunity costs of the use of physical capacity so that it kind of say it would be structured in such a way that it enhanced productivity and took care of climate change rather than what you might call alleviated distress among the workforce. And so in essence, what they're saying is that was nice, but tomorrow when we really need it to head off climate change or when we need to pay for it had we expanded productive capacity and so forth we're not going to be there. And there's kind of a dead weight loss. This is just a loss. It doesn't generate future benefits or head off that climate crisis that was on the way. I think you've been truly realizing some sort of sophisticated version of Blanchard or Larry Summers. And I'm not out of sympathy with some elements of that critique but I wouldn't put it quite that way. So I mean, I think the inflation thing's overdone. I don't understand why they're flogging that horse. Say we did get some inflation. The only reason I would worry about it is if that it bit into low incomes and wages were not adjusting quickly enough. That's a very real concern. But we have after all learned a pretty simple lesson about how to alleviate poverty in societies like America or indeed Europe, which is A, in the European case, provide people with job security, which is what they did through short time. Or in the American case, just print some checks and send people money. So that's the bite. The bigger concern I take as real is more about prioritization. And it is stunning that America did the largest set of stimulus packages ever. And they basically contain no green element whatsoever. If you add up the 2020 package, the rescue plan, and of course the idea is that that will be deferred, that down the line, there is the big green investment package. To my mind, the problem there is not actual, as it were, budget capacity constraint, debt sustainability. I think that's an arithmetic which we just don't need to be concerned with at this point. It's clear, however, that the political obstacles are real, particularly in the United States, and that's what we're mainly talking about here. There's only so much that you can get through the ridiculously constrained pipeline of American congressional legislation. And so that first Biden package, the rescue plan, which is very remarkable for being relatively pork-free, right? In terms of delivering benefits to low-income and middle-income arachns, it's remarkably streamlined. There's not a lot of tax benefits for corporations and very rich people. The concession they had to make to get it through was on the minimum wage, which brought off the Chamber of Commerce and then they were okay with it. But I think there is a sense that that was a moment politically, where they had momentum, where it was a shame not to do infrastructure. And the idea that you could then roll out the jobs plan and the families plan and do those next, well, we'll see. Everything's still to be played for, but the momentum isn't what it was in the spring. And so that element of the summer's critique, which I think has been underplayed relative to the scaremongering about inflation, I'm actually more sympathetic to. But it may be a rationalist fallacy to imagine that you get to pick and choose this, right? The first stimulus of the Biden administration was driven by Congress. It wasn't, the impetus isn't really coming from the administration. It's Schumer and Pelosi that already had lined this up the previous year, wanted to do something really big very quickly. And I think Yellen and the administration just sort of waved it through. I don't think the initiative really had come from that. The fact they were willing to wave it through is remarkable, because that's very different from 2009. And I wrote about this at the time. I do think there is a break there. And I understand the political logic, which I think people like Paul Krugman have been articulating for some time, which is it's all about politics. And he's all really about the midterms. And then I think that gets us through the midterms with the democratic majority in Congress still intact, however thin it may be, is a win. So as you look at the, how do you say the snapshot of now, what do you see? How they say boiling in the culvert. We see climate on the horizon. And it might very well be that it's already boiling, meaning that the time horizon to meet two degrees is ticking away, we may be overdue as the UN's recent report. Over 1.5, we're definitely up. Currently we're nowhere near what will be necessary for 1.5. But in the realm of inequality, in the realm of trust in government, in the realm of, which we haven't talked about, the world system in US-China relations, what do you see right now that causes, gives you hard work. Oh, well, any number of different things. I mean, the book concludes, as you say, open-endedly with a tour of, as it were, the vectors of tension, as I think I call them, that exploded in 2020. And none of them are calming, right? None of them are, none of those sources of tension are really being relieved. Inequality was increased, the dysfunction in the American political system is unabated, the tensions in Europe remain, the fundamental issues around Italian debt are unresolved. The climate environmental envelope is being stressed evermore. And we are not done with this virus, after all. And absolutely, the tensions with China reached a scale and a ferocity and an ideological intensity in 2020 that, as a historian, took me totally by surprise, in part because history was being in vote. You had people like Attorney General Barr, lecturing American business about the fact that, quote unquote, we would all be speaking German, but for the fact that their predecessors had aligned themselves with the American state in its mission to win World War II. And so the lesson from that was that they needed to get on board with a confrontation with China and a quite explicit attack on America's corporate elite as essentially complicit with appeasing the authoritarianism of China, which was then coupled with an attack on woke America political correctness in the United States, a really comprehensive culture front, a culture war, of a McCarthy type, it's not unfair, I think, to draw comparisons to the 50s, but directed against American business. So whereas it might have been once upon a time, it might have been like liberal pinkos in the state department, all of a sudden the targets here were the heights of American business. That's very novel. And at the same time, counter-flow, completely uninhibited, disinhibited moves by Ray Dalio, Bridgewater, all the big players in Wall Street as well, even to China. So talk about incoherence, some of the tensions of which we've seen unloading this summer with the moves by regulators on both sides, the Sabotage or to undercut IPOs, which I think have really scared people. But it's a profoundly unresolved situation at what, let's face it, was the driver of globalization. When we talk euphemistically in general terms about globalization since the 1990s, what we really mean is the network of trading relations and manufacturing relations built around China. So to have that destabilized is historically radical. Well, I think I remember years ago reading a book by a woman named Nancy Frazier. The old is dying and the young cannot be born. Well, that's an air phrase of Gramsci. Yes, and what she was saying in essence was that there was distributional fights regarding gender and race. And that the Democratic Party, which used to represent, quote, the working class, I'm going back to Lyndon Johnson, Franklin Roosevelt, were now frightened by the success of Ronald Reagan. And they formed something called the Democratic Leadership Council, and then they went forward where their, what you might call big donors became things like Wall Street or Silicon Valley. And to avoid being pushed out of office by what you might call Reagan Democrats, is what they used to call them, the Migrate Across, they had to adopt identity politics. So a lot of the gender and race issues are associated with a constructive and I think overdue agenda within the Democratic Party. And what she predicted in the book, this is when Donald Trump was president, is that he had come in and said, the system is rigged. Reagan Democrats haven't been able to dance to that kind of music in a long time through the Obama and Clinton years and what having. So they migrated across and Hillary lost to Trump as we all know. But at that juncture, she said, she predicted that Donald Trump would now abandon the people he hoodwinked into voting for him. And he would take up the identity politics agenda vis-a-vis the beneficiaries of gender and racial policy change to keep those people, despite the fact that he wasn't helping them to keep them on his side. And I just thought it was a brilliant vision at the time of something that didn't get out of a lot of the economic issues. It just shifted, which might call to a different dimension of our politics. And what worries me right now is that I see and I applaud the progress that the Biden administration is experiencing or deservedly experiencing from the women, people of color, the change in composition of appointments and cabinet, first female Treasury Secretary Janet Yellen. But all of these things I think are great and necessary. But a lot of my friends say the reason we're gonna be tough on China is because that Reagan Democrat white working class crowd is gonna go back to the Trumpians unless we stay hawkish on that frontier because they're resentful of the other one in the echoes of Donald Trump's presidency. So I think I know Martin Wolf at the FT is working on a book between about the tensions in democracy of what I call plutocracy and identity and inequality, all the dimensions that you bring up and it's very hard to see this what I call strain or this stress being ameliorated in creating a broad based consensus in America. And without that, it's very hard for America to be an example in leading the world. Yeah, I mean, we might come back to that final point which I do think is quite a stretch but to focus on this issue of class and identity, I think the obvious insofar as there is a solution is clearly the proposition from the left which is to say, look, insofar as the appeal is as it were from plutocratic donors and upper middle class, highly educated, college-educated identity politics warriors, this is profoundly off-putting to most working Americans. In fact, many working Americans of color who as we discovered in the most recent election don't in fact warn to appeals to defund the police as we've seen that in the New York City elections as well. But the rational way to counter this is to say who is the working class in the United States right now and the working class in the United States today of course does include some burly white men, the virus or Polish or Anglo extraction wearing hard hats. But it also includes large numbers of people of color. In fact, predominantly the race and class in the United States are to a large extent the same problem. African Americans are as disenfranchised and as far down as they are in the pyramid of wealth because they're working class. One is an indicator of the other. The kids go to bad schools, they have less chances of making progress and they are disadvantaged in a whole variety of other ways on top of the stigma of blackness projected onto them and the criminalization they're subject to. And the same is true for women obviously. A huge part of the working class workforce today is female. And so a genuinely progressive strategy of mobilization would seek to abolish this divide between a strategy of identity and a strategy of equality, I mean that's absurd. And so you need to work on that. The question I think is, and to do that you need constructive policies like the ones the Biden administration has tried to roll out. That is why I think they prioritized that first round of welfare spending because they knew that constituencies of people, working class people, precarious workers, whether they were white, black, Latino, men and women, but above all of course single, perhaps women were in deep trouble and needed all the help they could get. They were facing a genuine social crisis. And then the jobs plan and the families plan are targeted specifically at those groups. The most radical and innovative of them is arguably the family plan, which focuses on the care economy, which is both crucial for working families and working mothers in particular, but also a sector which employs disproportionately women. So that is the strategy. And I think that's an entirely positive strategy and it's clearly the way in which you need to answer this invidious and in the end, I mean, I don't have a lot of time for identity politics detached from hierarchies of class, but you might not say that's surprising. I am who I am. I'm an extremely privileged upper middle class white man from Europe, but I don't even think it's a terribly good read of the United States. The second question that follows on from that is how much of a price do you have to pay in terms of foreign policy antagonism to really cement that? And I'm not sure that antagonism with China necessarily plays well with a broad segment of the American working class. It may work well for some sectors which are bigger as competition. And a strategy of rebalancing there is clearly necessary. In political terms, it's clearly, it's a weak flank for the Democrats. The last thing the Biden administration needs is to be accused of being weak soft on China. The campaign against China was already begun under Trump. Arguably it goes back. I mean, it has democratic DNA as well. I would trace its origins to 2009. First phase of the Obama administration, that first visit, indeed, of President Obama to Beijing, which went very badly. And the period of the Clinton era at the State Department. I mean, Campbell and people like this who were calling the shots now are veterans of that period. So the third element is leadership. I just think that's a phantom of Ghana. I mean, it's a will of the wisp. It's a mirage on the horizon. They, if America shows up and it's a constructive player, and that's what people need. On the complex issues, on the issues of financial governance, on the issues of central bank activism, of course the Fed acts, we live in a dollar world. But in a sense, that doesn't really need much coordination because the entire system is dollar centric. So if the US acts, its domestic policy has complicated ramifications. If when we're talking about leadership, I mean what were the really difficult issues which require multilateral bargaining, give and take. And those are extremely difficult to arbitrate. I don't think America's in any kind of position because what kind of bargaining power does it have? It can't deliver on trade. It's not a credible champion of democracy in the current moment. And in terms of security policy, it's ever, broadly speaking, except perhaps in the East Asian arena, tendancy is to pull back dramatically, right? There's a powerful impetus to withdraw. And so what America really has to offer there is not very inspiring. That isn't to say that the world isn't in a mess and that we don't need concerted responses. It's just not obvious to me that those are going to come from a reassertion of American leadership. And I think the tensions that you described in the book will get one segment related to voter suppression and some of the structures in our constitution might mean that there is a large majority of people who affirm the kind of vision in the leadership, but that isn't exactly what will translate into the electoral count because of this refractory process that is allowed to continue to blossom. I mean, I do think, I mean, I've been preoccupied with this question in a sense going back to this book I did deluge about the rise of America to prominence in global affairs in the course of World War I. It's not there in 1914, but by 1960, America is the pivot by 1916 of everyone's strategy. And in the treaty fight of 1919, when Willdrell Wilson has propagated the idea of the League of Nations, that the world is watching the most difficult treaty of the bargain over the Versailles Treaty, incorporates the League of Nations with the United States at its core, and he brings it back to the recalcitrant Republican-dominated Senate, the Republicans won the midterms in November 1918, and they sink it. And, you know, forget Paris in 2015 and Trump exiting. I mean, this is like the entire fabric of world order in the aftermath of the greatest conflict in the history of humanity to date hinges on America's presence. And America just says, oh, sorry, no can do. Why? Well, this constitution of ours, you know, this issue of like division of Paz and then the electoral politics of the United States. America is profoundly problematic as a global hegemon because of the structure of its constitution. It's not in the simple sense, you know, a sort of elite-governed imperial structure like Britain was for a while in the 19th century. It's something much more radical than that. And very difficult to manage. And it is, I think, entirely conceivable, both in terms of its global leadership role and also in terms of the development of its own democracy, that we can see very bleak, counter-majoritarian. In fact, it's quite obvious that the Republican party is dedicated to securing its grip on power by all means necessary, including the subversion of the democratic process in the U.S. Then the question that follows on from that is, you know, what is it that we gamble on here? Like, do we gamble on some sort of convulsive moment of refoundation, a civil rights moment, a New Deal moment, a civil war moment, heaven forbid, a kind of Bruce Ackerman-style shift in the Gestalt in the frame of the American constitution? Because old as it is, I think it's probably the oldest operative significant constitution in the world, of course, it's constantly modified. But are we like realistically imagining that scenario or from the point of view certainly of global stability might one conceivably think that the continuation of a incoherent, decentralized structure of power is in fact, you know, the best we can hope for and in some sense the safest, because remember the countervailing power that this exercised on the Trump administration. So there are checks and balances here and they cut both ways. When the Democrats expect to have power, of course it's all profoundly frustrating, but when they don't, living in a city like New York, it was profoundly comforting to know the limits of federal power over our city and our state. And when you think about issues like climate change, again and again, you'll see people make this move where they'll say, well, America's going to do this and then people will say, but what about the Senate? And then they'll say, well, we can't ratify anything but we'll sign up anyway. And then they'll say, but what about the next election when the Republican is elected and he'll just pull us out and then they say, oh, well, sub-national actors will continue, you know? And that is a polite way of saying that the American national apparatus of government is a busted flush as a vehicle for sustained progressive politics. It may simply not be functional, but the problems are urgent and we need to keep moving on them. And we know, you know, if the coasts move on climate, it's a very big piece of the global puzzle because their economies are as large as large European states. In fact, you know, the East Coast is larger than almost all of Europe, same for California. So I do think we're in a world though and you say, you know, I don't project forward, but I think even in our present moment, we can see truly radical contingencies, truly radical ideas of possibilities for America's political economy in particular. Well, you mentioned also in the book that what you might call the Biden group is not really the left. You talked about Bernie and some of the climate issues or Elizabeth Warren and how what is in power is much more, what you might call a centrist working with the existing structure and trying to calm it down a bit, albeit I take your point about 2009 where the look for a consensus then damaged with speed and the size of the response, now we really put something out there. But I sense that, which you might call that, characterization of the Democrats as the far left is not particularly accurate in terms of power too. No, I mean, the Democrats have become a much more multi-vocal party. I mean, I think that's the significant thing to say, right? Is that the party disciplined, as you say, in the wake of the Reagan shock to create the Clinton coalition and then even more under Obama was a very streamlined, centrist, if I want to have a better word, protagonist of neoliberal economic policy in social policy in the United States, people like the Hamilton Project, down into the details of how they conceived social policy as working public-private partnerships, operating incentive structures, nudge, the whole, this was the repertoire, because in a sense, the Republicans have defaulted on governance in the United States for so long. It's the Democrats who've been doing the governing and it's the sort of economists that work with them and they come from places like MIT and Princeton. And that is the heart of governance in the United States and what's happened in the wake of the bitter disappointment on the left with especially the second term of the Obama administration on the one hand and then the loss to Trump is an opening to the left and that the formation of a substantial, it's not. It doesn't have the same heft as the extreme right wing of the Republican party has had at times, but it has some leverage. And so you now, I think the minimum level of complexity you'd need to model the Democratic party would be like a three-fold typology with a left wing, which is potent and strong and unsmart and full of ideas and generating ideas all the time. It's where all the ideas come from. The right wing, the mansions of this world and we're grateful that he's there because West Virginia would otherwise return a Republican, but nevertheless, he's our conservative within the Democratic party camp and then you have the people in the middle who are the Bidens, the Yellens of this world who I think are maneuvering. Smart enough to see where the wind is blowing from, easily smart enough to recognize some of the deficits of the centrist policies of the Obama period and also smart enough to recognize the force of many of the ideas coming from the left which are to be concrete things like antitrust with Nina Khan being appointed to such prominent role and Tim Wu or Gensler in the banking regulation, some really powerful stuff could come out of there that he's a tough guy when it comes to these kind of issues. But more broadly, you know, on climate, there is, you know, the Green New Deal advocates lost and this is one of the sort of historic frames of this book, the Green New Deal lost on both sides of the Atlantic, both in the UK and the US, but it's quite clear that its strategic diagnosis was spot on. Now it said the Anthropocene poses fundamental problems. You know, it impacts a society which is profoundly unequal and shot through with massive instability thanks to the nature of the capitalist system at this moment. And in responding to this, we cannot be hamstrung by a set of outdated economic ideas which were already empirically voided in 2008 and institutions like INET have done a profound powerful counter-hegemonic job over the decades now in shifting that conversation. And they were right on all three counts. I mean, they didn't quite understand any more than any of the rest of us that the most urgent problem from the Anthropocene wouldn't be climate. It was going to be a virus and it was going to move at the speed of a blitzkrieg, not trench warfare, but nevertheless, they understood that, you know, that is the strategic challenge going forward is somehow trying to find a way of rebalancing humanities and the economic systems relationship with nature and that therefore we would need to do big things and if other big things were gonna happen one way or the other, and it was a question whether we got to control what the big things were and what direction they went in and that we, that ideology, old fashioned or sterian ideology could not stand in the way. And the centrist on both sides of the Atlantic, you've got to give the Europeans credit this time too. I've kind of got it. Like they're not going to, you know, but Osilevandelia came as close as she possibly could as a, you know, she's a conservative, she's a Christian Democrat, you know, and she's calling her thing a green deal. Like everyone knows and they occasionally, you'll hear slips of the tongue of El, accidentally say new deal. You know, it's clear that that is the diagnosis of now a broad stretch, not just of the far left, but of, you know, green modernization, green capitalism and it extends quite easily then and this is where the new battle starts, not just the political, naked political battle to survive, make democracy survive, but the battle about policy is like what is the relationship between that agenda and say Larry, think, you know, helpfully comes along and says, look, we want you to re-engineer the Bretton Woods institutions to absorb all of the risk whilst we go and do adventurous stuff, realizing the sustainable development goals. I mean, surely this is an offer you can't resist. I've got trillions of dollars, you've got problems which are that kind of size, you don't have it on your budget's long term, all you need to do, let's do a little bit of engineering here. You take, you backstop all of the first risk or all of the really bad stuff we don't want to. And we've got ourselves a bargain, right? And that's where the real fight starts, you know, because we may have to use that kind of a structure, but you and I both know that you then need to get, the devil's in the detail, the devil is in the engineering of that, backstopping of it and to ensure that, you know, there's an equitable bargain here between stakeholders. I've been involved in some conversations recently that are related to development, and climate change in Africa. And the argument that is being made is that of being kind of facetious, but in Norway, about a third of the year, it's dark all day and night. So you put up solar panels in Norway and you pay 100 basis points more than the rate of inflation maybe. When you go to the African continent, the solar panels are much more productive all year round and you're asked to pay 800 basis points over the rate of inflation, what they might call a political risk premium. So the question is, how can the multilateral institutions bear some of that risk because it's not just being a do-gooder and benefiting the African people, though that's important too. What it's doing is it's saying we're all gonna survive if we can get that financed and it's worth our bearing that risk premium collectively. And yet, like you said, the details, the enforcement, the mechanisms, people don't know how to do them. Yeah, I mean, I discuss in the book, I talk about the United Nations Economic Commission for Africa, they've got this very dynamic group there is Songway, he's been very proactive and they're fascinating people to talk to. And I actually organized a meeting with her and her team and people like Daniela Garbor and we had a very frank exchange because their position, I mean, the African position is kind of radical. I mean, A, it's got that backdrop. In other words, look, sustainable development goals, you know what the demographic challenges of Africa are. We've got, we will be the largest slice of the working age labor force in the foreseeable future. This is the dynamic leading edge of the world. We have these pressing problems. We need capital. We don't wanna talk to you about sovereign default and how you restructure debt. There will be some countries that will have to do that. You don't understand what we need are trillions of dollars and we need them fast, right? And then you say you can't do that. And we say Italy. I'd like to talk to you about Italy. But Italy has a debt to GDP ratio in excess of 150% of GDP and its medium term bonds are now trading at negative yields. Now, we all know that Italy has got virtually no nominal GDP growth prospects despite the magic that Mario Draghi will work in the next gen EU. Everyone in their right mind knows that that is probably not going to work out and there's gonna have to be some solution of some kind. If you can engineer that for Italy, why on earth can't you engineer that for Ghana? Look at Ghana's growth prospects by contrast. Catch-up growth, dynamic, youthful population, relatively good governance, much better macroeconomic fundamentals than Italy in terms of debt to GDP. The difference is you will engineer the risk out of Italy's sovereign debt and you say you can't do it when it comes to Ghana. We're calling your bluff. If you're serious about this, engineer the risk out of this, right? And to my mind, I mean, I understand because the left purists will come in and say, oh, we shouldn't do this. Like we're incorporating vulnerable low income countries into a fragile structure that we know can blow up. Why would you wanna create a repo market for African sovereign debt? We know what repo markets do. They're pro cyclical. They're a nightmare when crises break out. Surely we need to go down the healthier structure. We should have either proper sovereign default mechanisms like Brad Setzer and people like that we're working on for the G30 or Daniela Garborn folks will argue for a big green government, like proper public sector engagement. But you say this to the Africans and they go, who are you kidding? We know you're not coming. A, we don't wanna talk about debt default. We need to move forward, not backwards. And we do not believe you'll ever arrive with trillions of dollars or properly multilaterally backed government funding. That's not, that's the Chinese have done a certain amount of this and you try and repress them as much as you possibly can and try and out-compete them. When the G7 got together in Cornwall and did this, you know, B3W build that better world thing, it's quite clear they were talking public-private partnership leverage deals exactly the same time that the Africans are talking about. So the future I think is there. It's terrifying. Cause we know, I mean, Daniela and Garborn folks like that are absolutely right. We know how fragile these structures are. But given the obstacles to large public budget expansions everywhere in the world, this may be our best bet. And I mean, I think that to me adds to the fragility of this, right? The way in which we engineer our way out of these massive structural problems that you and I started by talking about is by further complexity, further elaboration. I don't see there's any way out that goes back to basics. I'm profoundly skeptical of this vision that somehow, I mean, this isn't to say that we don't need better sovereign debt restructuring mechanisms. Of course we do. But they need to be harnessed and they would presumably be an integral part of mechanisms for generating huge quantities of new leverage. Because that's, we need to direct it properly and put it in the right direction. Because as you say, the great opportunities there ought to be gigantic. I'm laughing as I was listening to you because one of my friends actually in the UK who works on climate issues brought up the idea of Italy versus Africa. And he said, you know why? And I said, no, why would they do Italy but not Africa? He said, oh, that's simple. Because the fashion district in Paris has to compete with the Italian fashion district. And the German manufacturing, the middle stock competes with the manufacturing in Northern Italy. So if Italy breaks out of the system, all of these places get crushed. And he said, that is part of why they all put Europe together, they're not gonna let it fall apart. But they don't fear Africa right now. And I said, what if they turn off all the oxygen on planet Earth? Shouldn't you be afraid? Not of the Africans, but of structuring that prospect. He said, no, no, they're not afraid of that. Well, this has been played out too. I mean, this is a historian. I mean, what fascinates me is, as you say, I'm not about predicting really. But what I'm really interested in is it worth surveying reality to just see what we can see. And it is truth, so much stranger than fiction. They, you know, Germany's development minister went to Africa in 2016, 1770. Germany had the presidency of G20 just as Donald Trump was coming in. And Germany, in the wake of the refugee crisis of 2015, had done the math and connected up the dots. And it said, you know what? We can think of one incredibly important reason to be worried about Africa. It's migration, full stop. And the German Marshall Plan with Africa, it's not the Marshall Plan four or in, it's the Marshall Plan with Africa in 2017 was explicitly motivated. I think he was a CSU, like a German conservative, went out and just blurted it all out. He said, look, there are two reasons I'm here. It was like, the Turks, the Russians, and the Chinese will be here otherwise. And B, if I'm not here, you're gonna come to us at some point in the future. So that's why I'm here. I'd like to do a Marshall Plan. And it's, I mean, that is the logic, right? I mean, he spells it out in a crude, racist kind of fashion. But the reason why, especially Europe and in the United States, this is true clearly for Central America and Latin America, given the climate shocks which are coming our way, the rich countries of the world have a absolutely overriding interest in this. It's not only that the business opportunities were great, it's such a negative way of thinking about your relationship with Italy. I mean, why don't they just expand aggregate demand in the Eurozone and then they don't need to worry about Italian competition? I mean, that's a typical kind of bad, McAnselist kind of logic. Today there is a huge growth opportunity here for people that will buy increasingly sophisticated products and the Chinese understand this and for some reason we are slower. But the second reason is, and it's not even, you know, it's also, I think, a question of identity. Who do we wanna be in the West 20 years from now? Do we want to be the people who saw this problem and assisted constructively, imaginatively and at some risk, at some financial risk to ourselves in addressing this issue? Or do we wanna be fortress North America, fortress Europe? Do we want to see not tens of thousands but hundreds of thousands of people dying in the Mediterranean or in the deserts of North Africa, which are going to become more and more uninhabitable as the climate, as the planet warms? This is, we should consider this. There's no safe place here, right? And so the options are, do we embrace this in a constructive, positive way, also collaboratively? Or are we essentially opting for the bunker strategy? Because that's what I think, if we do not grasp this development problem, that's essentially what we're opting for. And that is, that's in a sense, the most grim prospect, right? Because we are then essentially going to sign up to an ever greater extent of the kind of continuous chronic abuse of human rights that goes on on the borders of all of the rich countries around the world right now. Yeah, for sure. Let me, I say, put the triangle back in place because we've been in depth in the United States. We've been exploring Europe a little bit. We've talked about US-China. You talk in your book about the CAI agreement between Europe and China. We're now looking at a place where I've done conferences in INET which is China's relationship to African development, the competition with the United States or Europe. In this three, I'll call it three-player game and related to Africa, but US, EU and China. Do you see the potential for collaboration? Do you see a coherence that creates a potentially a multilateral system? You've talked about essentially, how do I say, isolated China trying to overcome the middle income trap inside? They have faith in economies of scale because their populations are large. They're working towards more of a knowledge-intensive education system and all. So they may shut the doors and go inward if this system continues to sputter or be acrimonious. Europe, United States could each go in different directions and could have three or more little spheres that are not really interacting at a mutually nourishing level. So where do you see what I'll call this three-player game? And again, driving through Africa where the Chinese have been playing a very active role in ports and transportation and roads and so forth. What's it look like to you given your historical understanding? I mean, I think we, I'm continuously amazed, I must admit, by the way in which this continues to be discussed in the United States as we speak. In the sense is that with Trump gone and the kind of loony tone removed from American policy that we were in a sense in a sort of stable space and if we don't talk, well then we don't talk but in due course we will talk. But Huawei just launched a new phone and it's a 4G phone. And I don't understand why that's not headline news because what that is is the first time that the war, I describe it in the book as an economic war and I don't think that's a misnomer. The open declaration by the United States that it's not willing to tolerate the use of Western technology in Chinese tech development even at its current level, let alone beyond its current level is a historic break. And the Biden administration by continuing the status quo and in fact in certain technical respects tightening it is underwriting that break. I think Beijing was waiting to see whether they would and what I don't even seem to see, at least in the public debate in Washington is a recognition of the gravity of that situation. I mean, if you've got your global leader in 5G technology reduced as a direct result of targeted American sanctions on frankly weak evidential basis like circumstantial potential risk that Huawei technology poses to an also ran in the race in the smartphone technological race at this moment in the matter of a year, right? From a leader last year to also run this year. There isn't gonna be a whole have a lot of room for debate about other stuff with regard to mutual collaboration with the United States. We just targeted and took out the leading edge of one prong of technological development and I would expect Beijing's relationship to any offers to be utterly tactical, totally cynical or better off, you people cannot be trusted as far as we can throw you. We are at war. We're not gonna declare it. We're just gonna play for keeps now because you can't do that. I mean, it's astonishing. And the Americans will come up with lots and lots of reasons you know, spying everything else but GCHQ in Britain monitors Huawei religiously and they never found the smoking gun. There is no smoking gun. What everyone knows about Huawei is it's terribly, terribly vulnerable technology. It's very poorly engineered software and so anyone can break into it and there is a long track record of Western intelligence agencies breaking into those phones as much as Chinese using them the other way around and it's a big difference between blocking the sale of that technology in the West and surgically striking the chip supply that allows its manufacture and sale to other people notably in Africa. And so I just like for me, it's why are we even, there's a sense in which it's as though we absentmindedly declared war on China and then we're sort of saying, well, where can we move forward on things like, you know, well, cooperation in development. I mean, Dutch firms which were supposed to supply high tech you know, these ultra sophisticated chip manufacturing equipment to China now no longer will as a direct result of American pressure. If I was Beijing, I wouldn't be seriously negotiating about anything from here on in. I mean, genuinely, why would you be utterly naive? As soon as China reaches the level of technology that America regards as in any way compromising, it's entirely selfishly defined. America must be number one on my watch position. You know, they, America avoids all normal commercial relations. So, I mean, sure, I mean, I think it may be possible to do deals with China where they think it's, you know, in their best interest. China, I think, has a powerful interest in addressing the climate issue because they are going to be massively impacted on a much more than we are. We should stop worrying about whether they're serious. We should wonder whether we are. We should then ask what it is they might be willing to do with regard to development in other parts of the world because where we could maybe get some alignment is that the Chinese and us can presumably agree that we don't want Nigeria to migrate to a carbon-heavy technology, which is where Nigeria would go if it could develop, right? So those would be the sorts of deals that I think might be open, like the choices that China's going to make around the edges in relation to, say, Pakistan's energy infrastructure. That's where you would be looking for bargains. I find that the more you think about it and spell it out, the harder it is to imagine any bigger bargains. The really big piece of the puzzle is, of course, Russia, but it's so astonishingly remote as a possibility. Because what you would need to do is corral Russia by way of a Sino-European, American three-way, I don't mean like that pigs will fly before that happens. So it's difficult to see a good way forward for, you know, grand worldwide decarbonization without cooperation with China. But I just think, given the framing of Western, but a specifically American policy towards China at this current moment, I'm not surprised that Chinese basically don't want to meet with Americans. Yeah, well, I spent a lot of time over the years in China and I hear from their leaders, very high-level people in the country that I've been meeting with. They say, first of all, the hostility that's being directed at us by someone like Donald Trump is really related to the fact that we were a large country with a capital income one-fortieth of America in the 1970s. When you engage in globalization, the punchline as an economist is, everybody can be better off and nobody worse off provided you make the transfers, provided you make the adjustment assistance and transformation. And the people, the American people should be mad at. Oh, they're right. The people who made a lot of money and then lobbied in order to get their taxes cut and keep their money offshore and gut our education system. And so it exacerbated the inequality and the introduction of China in globalization played a role in that but the people responsible for ameliorating it were the Americans. And then I go to the second page which is the China 2025 report came out a few years ago. And you could see whether it's reports of the council on foreign relations by Blackwell, Campbell and others, all before Donald Trump, 2014, 2015. And they're saying, whoa, these guys aren't gonna fall in line according to traditional comparative advantage. They're gonna compete in cybersecurity, in finance. They're not gonna let Wall Street into the market so that in essence our comparative advantage is there. They are going to ask for technology transfer and then they're gonna replicate the firms from our foreign direct investment and push us out. And there was a, I won't call it a panic but there was a great sense of sort of an awakening that the Chinese had a strategy that the Americans couldn't accept. And it feels to me, not Dean Baker, the Washington, or he was from Washington at the seat in PR, he's often said to me and others and written that you got into a situation between the United States and China where the Trump people were negotiating on behalf of the people with intellectual property rights or Wall Street but inflaming the white working class that lost in yesteryear. But what they're negotiating for is entertainment, pharmaceuticals, finance, all these high-margin services. And even if you win on those things, you're not gonna ameliorate what you might call the woundedness of the distant past which takes you back to where the Chinese say that was the responsibility of the American elites. And when friends of mine that worked in issues like should China be called a currency manipulator? They said the chief lobbyists on behalf of that were people like Walmart and Nike saying, no, we don't want them to have to make the currency rise because they made money. And so it's a very, very difficult place. I'm talking about economic policy, not human rights policy. Very difficult place for anybody to stand on a moral high ground. But I really do agree with you that this is what you might call, it's hard to see a way forward given the woundedness and the aggression that's in play at present. Yeah, I mean, I mean, I'm not, I go back and forth on the whole China shock discourse of the United States because it's clear that the, you know, David Orta's walk is in the end extremely persuasive that there are bits of the American economy in American society which had massively impacted. But he's a very careful analyst. He's a very careful sociologist and economist and a brilliant analyst. And he'll go on immediately to say, but one of the reasons why they were as impacted as they were is that they were already weak. These were already fragile communities that were destabilized by the previous waves of globalization from Japan and then from NAFTA. And evidently, as soon as you make the comparison between the China shock which hit, you know, the United States, bits of the United States and say Europe, you'll see how differently societies can react to these sorts of globalization shocks. And in aggregate, it's quite evident that the China shock is nowhere near large enough to explain the sudden surge in inequality in the United States or the disempowerment of the American labor movement. And so there is then a, to my mind, extremely significant question about, as it were, the political responsibility of expertise and critical unorthodox, heterodox expertise in particular in how it feeds into a conversation like this. Because it can obviously be used to say, the Chinese did this, they destabilized the American working class and therefore XYZ policy ought to follow. But you could also say, you know, there is this shock. What are we gonna do about it? How large does the adjustment have to be internally? And how could we make our working class, ordinary working Americans better equipped to cope with this kind of shock? And that was the mantra for so long of, you know, Krugman in the 1990s and the Hamilton Project in the 2000s. And they just simply failed to deliver at scale. They don't actually deliver the scale of support that would be necessary to offset. So then you find yourself in a sort of third best, fourth best world in which substantial and politically important working class constituencies in the United States are objectively suffering very badly. And it is as a result of Chinese imports. And then you have to do something about it, right? And then it becomes almost irresistible to make this move to say, well, in that case, you know, a progressive politics is harmless to your protectionism. And it's exactly as you describe it, a kind of progressive disablement and a narrowing of options, which if the entire problem that had been addressed in a more intelligent way earlier on, in a way which would not be foreclosed. But of course, this is multiply over determined because the reason why the response was as weak as it was and as effectual as it was is to do with the class politics of the United States at that moment. And the story that we were telling earlier on about the shift in the balance of power within the leadership of the Democratic Party towards a much more corporate, much more elite level. I mean, you know, Tom Ferguson, you know, is part of your organization has written about this as forceful as anyone has. So it's a real impasse that we find ourselves in at this moment. But I find that it is not, it's not, it's not, again, we need to factor in another element here, right? The truly, as it were, non-negotiable element of this relationship isn't to do with working class jobs, right? The non-negotiation element of this is also absolutely nothing to do with soybeans and the sorts of things that Trump was doing his deals about. The non-negotiable element is to do with hard power in the military domain and its tech and AI and everything that spells out from that. And that is not principally a matter of socio-political bargaining and class politics. It's a matter of the apparatus of the American state and its willingness to accommodate a multipolar world in which it is not the absolutely dominant, unchallenged, go anywhere, do anything, military superpower, that it has come to expect that it is. And, you know, a series of defeats in the Middle East have taught one set of lessons and we're in the middle of witnessing the shambolic end of the experiment in Afghanistan. And they're moving on to a new field of endeavor where they're going to try and confront, you know, China as a peer competitor, as they call it, the China's facing challenge. And I think we shouldn't conflate there the different vectors. You know, in some sense, it would be good news if we were back in the debate of agricultural tariffs and jobs, because that would be, you know, there was an extraordinary moment. I comment on it in the book in 2020 where, you know, Mnuchin and Lighthizer, who were previously the battering rams of Trump's aggression against China, Lighthizer in particular, Les Mnuchin, were the last conduit of reasonable conversation between D.C. and Beijing, right? Because the burden of the conversation was being carried by Pompeo and Barr and, you know, O'Brien, these, you know, full-on ideological hawkish warriors. And what's really striking is the Biden administration has taken no step back from that. So you'd expect them to double down on jobs. You'd expect them to double down on the blue collar issues, but that isn't the striking thing where they've stayed, you know, where they've held position is, in fact, on the tech war stuff. Well, I think you're characterizing this very well. And I would, how would I say, I think we're gonna have to wrap up here, but I would say I was inspired to become an economist. I thought I was gonna be a shift designer by Charles Kimberger, and I took his course in European economic history, and another one that I wrote a junior paper on, how maritime technology affect the pattern of trade between the Dutch and the British empires. And, but he inspired me to become an economist. And every time I listened to an economic historian, I just wished that we could integrate more history into the curriculum, along with the history of thought, along with all the analytics. I think it's a shame. I took economic history from Westerchamber. I took history of thought from Will Balmall in graduate school. Charlie Kindleberger brought me to it. So I've enjoyed listening to you today. In this cauldron of not knowing, I always think about musical thoughts or lyrics that come to my mind. And as I was listening to you, it reminded me of a song by you too called, City of Blinding Light. And the first verse goes, the more you see, the less you know, the less you find out as you go. I knew much more then than I know now. And your humility in saying, in essence, past isn't always problem. I want to contradict slightly because I think the patterns and the interactions that a historian sees in integrating being what you might call organically multidisciplinary is very helpful to an economist. And we may admit that we knew more then than we know now. Well, we may know more about the history because the history's over. Then we know now about the present and the futures because it's still in play. That humility is important. But the depth and sensitivity with which you approach analysis is a really great example for young people to emulate. So thank you for being with me and thank you for the work that you do. And I look forward to the next time we can talk. Me too. Thank you.