Disorder: Hard Times in the 21st Century

A summary of the book written by Helen Thompson (2022) - Article #26

In this 12 min article, The X Project will answer these questions:

• I. Why this book, and what’s it about?

• II. Who is the author?

• III. How popular is the book?

• IV. What is one of the top takeaways from the book?

• V. What is another top takeaway?

• VI. What is the third top takeaway?

• VII. What is the fourth top takeaway?

• VIII. What is the fifth top takeaway?

• IX. What does The X Project Guy have to say?

• X. Why should you care?

I. Why this book, and what’s it about?

In an era where the world seems perpetually on the brink of upheaval, Disorder: Hard Times in the 21st Century by Helen Thompson emerges as a beacon of understanding amidst the chaos. This isn't just another academic tome lost in the sea of geopolitical discourse; it's a pivotal work that cuts through the noise, offering clarity on the complex interplay of forces shaping our world.

At the heart of Disorder lies the assertion that the world’s current state of flux isn't merely a product of contemporary events but rather the result of historical, economic, and political strands woven tightly over the last century. The book is organized into three parts - geopolitics, economy, and democratic politics - that tell three stories. The first geopolitical story is about the rise of the U.S. alongside the rise of oil to a U.S.-led world order that is now being challenged by China and Russia. The second economic story is about the rise of the U.S. dollar, the corresponding Eurodollar system, and the world economy and how the financial crisis of 2008 exposed the fragility of the system. The third story is about the rise of Western democracies, the rise and decline of the “Democratic Tax State,” and how populism, nationalism, and authoritarianism undermined democratic institutions and norms. It's a skillfully woven narrative that transcends the simplicity of history textbooks and news headlines, offering a rich tapestry of insights into how we arrived at our current global crossroads.

What sets Disorder apart is its timely publication on February 24, 2022 – coinciding with the exact day of the onset of the Russian invasion of Ukraine, a pivotal moment in modern history. This coincidence underscores the book's relevance and prescience. making it an indispensable read for those seeking to grasp the undercurrents of today's world. Thompson's analysis is not just retrospective; it's a forward-looking compass in a world where the future seems increasingly unpredictable. The book is an invitation to understand the past century up to and including the COVID-19 pandemic, providing a foundation to anticipate what might lie ahead in these hard times.

II. Who is the author?

According to Wikipedia, Helen Thompson is an English academic who teaches politics at Cambridge University, where she is a professor of political economy, and a fellow of Clare College, Cambridge, where she is also Director of Studies. She has been working in Cambridge since 1994 and is currently a Department of Politics and International Studies member. One of her recent research interests is the aftermath of the 2008 Financial crisis.

She often co-hosted the Talking Politics podcast with David Runciman, and she now co-hosts UnHerd's podcast These Times.

III. How popular is the book?

According to Amazon, here are the book’s rankings:

This is one of the least popular books on The X Project’s list. While the topic and content of the book are extremely important, it is a “heavy” read as it is jam-packed with information and heavily footnoted (with 67 pages of footnotes!)

IV. What is one of the top takeaways from the book?

The Central Role of Energy in Geopolitics and Economics

Thompson's book underscores the pivotal role of energy, particularly oil and gas, in shaping the global economic and political landscape. The book takes us on a historical journey, highlighting how the quest for energy resources has been a primary driver of geopolitical strategies and conflicts. From the competition for oil reserves among nations to the impact of energy on military might and economic strength, Thompson illuminates how deeply intertwined energy is with the world's political and economic history. The narrative extends from the early 20th century to the present day, emphasizing energy geopolitics' persistent and often overlooked influence on global affairs.

V. What is another top takeaway?

The Intricacies of International Finance and Its Impact on Global Politics

Thompson dives into the complex world of international finance and its profound impact on global politics. The creation of 'Eurodollars,’ a financial phenomenon post-World War II, is explored in depth, revealing its role in the global economic landscape and subsequent financial crises. Eurodollars are the dollar deposits held in banks outside the United States (and therefore outside American banking controls) and the subsequent offshore U.S dollar credit markets that emerged and grew astronomically over the years. The book links financial developments, including the rise of the US dollar as a dominant global currency and the financial maneuverings post-World War II, to political and economic instability. Thompson's analysis extends to the 2007-2008 financial crisis, unveiling the interconnectedness of energy markets, international finance, and global economic health.

VI. What is the third top takeaway?

The Shifting Sands of Democratic Politics

Disorder delves into the challenges faced by democratic politics in the modern era, influenced by the complexities of international finance and energy geopolitics. Thompson examines the concept of 'democratic excess' and 'aristocratic excess,’ highlighting how these forces have shaped political landscapes in various countries, including the Eurozone and the USA. She explores the tension between national interests and international financial systems, scrutinizing the impact on democratic stability and the evolving notion of nationhood. The book critically analyzes the challenges to democracy in an interconnected and financially complex world.

VII. What is the fourth top takeaway?

The Evolving Energy Landscape and Its Geopolitical Ramifications

The transition to clean energy and its geopolitical implications form a significant part of Thompson's narrative. She argues that while the shift towards renewable energy sources is necessary, it introduces new complexities in the geopolitical sphere. The book addresses the changing dynamics of energy geopolitics as nations now compete for vital minerals and metals essential for renewable energy technologies. Thompson cautions that this transition could lead to new forms of conflict and competition, particularly as countries like China hold significant reserves of these crucial resources.

VIII. What is the fifth top takeaway?

The Future of Global Disorder in the Context of Energy and Finance

Finally, Disorder offers a sobering outlook on the future of global stability, considering the ongoing challenges in energy and finance. Thompson speculates on the potential for continued geopolitical strife, economic instability, and challenges to democratic institutions as the world navigates the complexities of energy transitions and financial interdependencies. The book concludes with a call for a deeper understanding and more nuanced approach to these interrelated issues, emphasizing the need for innovative solutions to navigate the potentially tumultuous future.

IX. What does The X Project Guy have to say?

The X Project’s central thesis is we are quickly heading toward a series of crises (financial, geopolitical, economic, social, political, etc.) with increasing frequency and intensity over the next 5-10 years that will culminate in some sort of ultimate crisis of crises, inflicting enough pain that a major reset is finally able to happen.

Why do I think this? Well, for starters, let’s look at twelve influential books The X Project has covered thus far (click on the title to be linked to the article):

• The Fourth Turning: An American Prophecy

• The Next 100 Years: A Forecast for the 21st Century

• This Time is Different: Eight Centuries of Financial Folly

• The Accidental Superpower: The Next Generation of American Preeminence and the Coming Global Disorder

• Flashpoints: The Emerging Crisis in Europe

• The Absent Superpower: The Shale Revolution and a World Without America

• FED UP: An Insider's Take on Why the Federal Reserve is Bad for America

• The Storm Before the Calm: America's Discord, the Coming Crisis of the 2020s, and the Triumph Beyond

• Disunited Nations: The Scramble for Power in an Ungoverned World

• Trade Wars are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace

• The Great Demographic Reversal: Ageing Societies, Waning Inequality, and an Inflation Revival

• Principles for Dealing with The Changing World Order: Why Nations Succeed and Fail

All of these books directly support this thesis. The reason I like Disorder, despite being a “heavy” read, is that it fleshes out the interdependencies between the geopolitics of oil, economics, and democratic politics - the last of which I generally steer clear. Nonetheless, Thompson further weaved into her narrative all ten topics that The X Project decided to focus on, and her book was a big influence in doing so.

In the final section, I will reveal other reasons why you should care about this book, The X Project, and its conclusions. I am temporarily suspending the paywall I recently implemented for this article, which would otherwise require you to now be a paid subscriber to view the final section. In a few articles, the paywall will move up within the article so that only paid subscribers will see the last two sections, or rather, free subscribers will only see the first eight sections. I will be moving the paywall up every couple of weeks, so ultimately, free subscribers will only see the first four sections of each article. Please consider a paid subscription.

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X. Why should you care?

First of all, nothing that The X Project writes and says should be considered investment advice or recommendations to buy or sell any securities or investment products. Everything written and said is for informational purposes only, and you should do your own research and due diligence. You should discuss with an investment advisor before making any investments or changes to your investments based on any information provided by The X Project.

The X Project expects a lot of volatility in various markets as we head toward increasingly frequent and intense crises and as our policymakers do everything possible to keep the system functioning, serving the status quo and responding to the crises as they erupt.

If you do nothing different with your investments and assets, or worse, if you make the wrong moves at the wrong time, there is a good chance you will lose quite a bit of what you have accumulated by the time you get to the other side of this period of turmoil.

On the other hand, there will be tremendous opportunities to capitalize on the volatility if you can anticipate certain market reactions and be positioned accordingly. This final section will be reserved for discussing the investment theses to which The X Project subscribes, which are as follows:

1. Overweight cash and short-term US T-bills for optionality, given expected volatility related to the remaining list below.

2. Bullish gold and gold miner equities

3. Bullish Bitcoin

4. Bullish oil and oil equities

5. Bullish natural gas and related equities

6. Bullish uranium and related equities

7. Bullish industrial commodities and related equities

8. Bullish agricultural commodities and related equities

9. Bullish industrial and especially electrical infrastructure equities

10. Bearish long-dated US and other Western sovereign bonds

These are long-term investment theses with a 5-10 year time horizon. Many, if not most, of these bullish ideas have a short-term bearish outlook. The X Project sees the overall stock market has relatively little upside potential at current over-valued levels after the rally in the fourth quarter of last year. In fact, The X Project sees enormous downside risk in the stock market at the moment, with the lagged effects of the Fed’s interest rate hikes finally starting to bite and the U.S. and global economies potentially heading for a recession in 2024.

Going forward, The X Project intends to discuss one or more of these investment theses in the final section of each article.