Niall Ferguson

Doom: The Politics of Catastrophe |Niall Ferguson on The Hidden Forces Podcast with Demetri Kofinas

Check out The Hidden Forces episode page and show notes

Key Takeaways

  • “History is really one damn disaster after another” Niall Ferguson
  • We don’t have any good frameworks to think about disasters
    • We tend to silo catastrophes in different categories (war, financial crises, natural disasters, etc…)
    • However, there are common features shared across catastrophes
  • If you take a step back, the distinction between natural or man-made disaster fades
    • Even natural disasters are politically mediated
  • When a disaster hits, the temptation is to blame the person at the top
    • The person in charge does have responsibilities, but it’s too simplistic to just blame them
  • We need to take seriously the potential dangers of the escalation of US-China relationships
    • The pandemic accelerated the degradation of China’s relationship with most democracies
    • Niall thinks we are now in Cold War II
  • Climate change is only one of the big threats that we face
  • The war of the future would be hugely disruptive to life, in a way that no previous war has been in the United States
  • Wars often begin when there’s a perception that odds of winning will get worse in the future
    • This justifies acting as soon as possible, even if there are risks involved
    • Niall expects China to try to take over Taiwan by the end of the decade
  • There’s a high risk of the US falling behind in financial technology

Key Books Mentioned

Intro

  • Niall Ferguson (@nfergus) is one of the world’s most renowned historians. He is the author of seventeen books and winner of several prizes including the International Emmy for Best Documentary in 2009
    • His latest book is Doom: The Politics of Catastrophe
  • Host: Demetri Kofinas (@HiddenForcesPod)
  • In this chat, Niall discusses his latest book on catastrophes, the COVID pandemic, the possibility of a war with China, and a lot more

What Inspired “Doom: The Politics of Catastrophe”

  • Even before the pandemic, Niall was thinking of “the history of the future” written about in dystopian science fiction
  • The Achilles heel of using history to understand the present:
    • It’s very difficult to think about technological change based only on history
    • Niall read a lot of science fiction, much of which is about pandemics
  • “Doom: The Politics of Catastrophe” is a historical tour of catastrophes
    • Aims to link together all the different forms of disasters
    • It explores catastrophes mostly from a geopolitical perspective
  • “History is really one damn disaster after another” Niall Ferguson
  • We don’t have any good frameworks to think about disasters
    • We tend to silo catastrophes in different categories
    • Some people analyze war, some financial crises, some natural disasters, etc…
    • However, there are common features shared across catastrophes

Blurring the DIstinction Between Natural and Human-Made Disasters

  • If you take a step back, the distinction between natural or man-made disaster fades
  • Even natural disasters are politically mediated
    • COVID had a very different impact in different countries
    • A volcanic eruption destroying a city would have had no impact if people hadn’t decided to settle there

Disasters Don’t Necessarily Come From the Top

  • When a disaster hits, the temptation is to blame the person at the top
    • The person in charge does have responsibilities, but it’s too simplistic to just blame them
  • Trump did make mistakes dealing with COVID
    • What really made the US suffer was the CDC not making testing widely available
      • That can’t be blamed on Trump
    • It would be an error to claim that with a different president the US would have done far better
  • This idea was also discussed in Richard Feynman’s book “What Do You Care What Other People Think?” where Feynman talks about the space shuttle Challenger disaster
    • Initially, the media attempted to blame Regan
    • Feynman found that the bureaucrats at NASA had downplayed the risk of explosion, even though engineers had pointed it out

Overreactions and Confusion Dealing with COVID?

  • We did a lot more than was probably necessary, but we didn’t do the things that would have been most effective (contact tracing, availability of tests)
  • The media played a major role in the confusion around how to deal with the pandemic
    • At first, it downplayed it, even criticizing Trump for wanting to stop travel from China
    • Then, they swang to an opposite, apocalyptic view, promoting shutting everything down
  • Much of what we did was scientifically clueless
    • Data from China made it apparent that the virus spread almost exclusively indoors
    • Yet, public authorities immediately closed beaches and parks, some of the safest places to spend time in
  • The mixed information and confusion contributed to the loss of confidence in public authorities
  • It’s interesting to see how the 1957 influenza pandemic was dealt with in a radically different way
    • Lockdowns weren’t an option back then; they are only possible today, because of the internet

The Emerging New Cold War

  • In late 2019 Henry Kissinger told Niall that we are at the beginning of a new cold war
  • We need to take seriously the potential dangers of the escalation of US-China relationships
    • If such a relationship escalated into a hot war, its scale would be unimaginable
  • The pandemic accelerated the degradation of China’s relationship with most democracies
    • Niall thinks we are now in Cold War 2
  • Like it happened in the first Cold War, a lot of Americans are in denial of the risks of this Cold War
  • Climate change is only one of the big threats that we face
    • We can’t only focus on climate change while ignoring other threats
  • We would get to disaster much faster through hot war conflict than through climate change

The War of the Future

  • If you’re paying attention, you can see what the war of the future would look like
  • We have some good blueprints for what the war of the future could look like:
  • The war of the future would be hugely disruptive to life, in a way that no previous war has been in the United States with the possible exception of the civil war
  • The war of the future would also be fought in
    • Cyberspace (disrupting what we do on the internet)
    • Space (involving satellites)
  • Part of the problem is that we’re not teaching children to think about these issues
    • The education establishment has become so focused on social justice that military history has almost disappeared

What Westerners Get Wrong About China

  • Many people see China as “Communist” only in its name, but they view as de facto capitalist
    • The Chinese Communist Party figured out how to have a market economy, while not sacrificing the Party’s total control over daily life and the economy
    • Xi Jinping used technology to create the most powerful surveillance totalitarian state of all time
  • We have to stop thinking that if we engage with the Chinese economy, we help it become more democratic
  • The general public has a hard time understanding that China is as big a threat as the Soviet Union was
  • Our media coverage underplays how closely China and Russia are collaborating
    • The US would really struggle in a conflict with both powers

Taiwan’s Situation

  • Niall expects China to try to take over the island by the end of the decade
    •  Xi Jinping made it clear that unifying Taiwan into China is his goal
  • Before invading, China will try all other possible options (invasion is risky)
    • They may make it difficult to do business in Taiwan or try other soft-approaches
    • A risk for China is that slightly stronger approaches may be interpreted as acts of war
      • China will be very careful
  • The current US intention to protect Taiwan is ambiguous and not so credible
    • There are efforts to make this intention more credible, also in collaboration with Japan
  • With time, it may become harder for China to get Taiwan by force
    • This increases the possibility of China attempting an invasion in the short-term
    • Niall thinks that the time of maximum danger will be after the Winter Olympics in 2022
  • Wars often begin when there’s a perception of the odds of winning will get worse in the future
    • This justifies acting as soon as possible, even if there are risks involved
    • This is what happened with Germany in 1914 when Germans were concerned with the growing power of Russia

Digital Yuan and Dollar

  • Niall suggested the possibility of China creating its own digital currency in the 2018 revised edition of his book The Ascent of Money: A Financial History of the World: 10th Anniversary Edition
  • Reasons behind China’s Digital Currency:
    • Limit the power of Chinese Tech Companies in Financial Markets
    • Create an International payment architecture outside of the US’ control
  • China will try to increase the number of countries adopting this currency
    • Countries doing a lot of business with China will have incentives to adopt it
    • The Belt and Road Initiative contributed to creating many potential clients willing to hold the Digital Yuan
  • What worries Niall, is not what China is doing but what the US is not doing
    • There’s a high risk of the US falling behind in financial technology
    • It’s evident that there would be an overwhelming demand for a digital dollar
    • Yet authorities in the US don’t have any rush or concern to create one
  • The situation is similar to what Microsoft faced when Netscape entered the market
    • Microsoft had to rush to create its own browser, Internet Explorer

Possibility of Upcoming Inflation

  • Niall expects a rise in inflation this year, but it’s hard to predict how much
  • We are both in a monetary and fiscal regime change inevitably affect inflation expectations and inflation
    • Government spending considered an emergency measure last year is being routinized
    • The Fed has recently changed its inflation framework
  • Most of the big changes in inflation expectations in the past have been war-related
    • The possibility of a war with China would also boost inflation expectations

The Problems with a Green New Deal

  • The Federal government today is way less effective than it was in the 1950s
  • If you make limitless capital available to this government to build infrastructure, the results won’t be positive
    • California is an example of what could happen nationwide
    • Its infrastructure, education, and criminal justice systems have all deteriorated despite enormous budgets
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Notes By Giorgio Parlato

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