Make no mistake, with energy prices set to rise to unprecedented highs, we are approaching one of the biggest geopolitical earthquake in decades. The ensuing convulsions are likely to be of a far greater order of magnitude than those that followed the 2008 financial crash, which sparked protests culminating in the Occupy Movement and Arab Spring.
The gathering crisis could prove even more catastrophic than the oil shock of the 1970s, which wrecked the administrations of three British prime ministers, presaged 40 years of American entanglement in the Middle East, and (due to the oil glut that followed) ultimately triggered the Soviet Union’s collapse.
Carnage has already arrived in the developing world, with power outages from Cuba to South Africa. Sri Lanka is just one of a cascade of low-income countries where leaders face being driven out of power in an ignominious blaze of petrol droughts and loan defaults.
But the West is not going to escape this Armageddon. In fact, in many ways, it looks set to be its epicenter – and Britain, its Ground Zero.
In Europe and America, a technocratic elite system built on mythology and complacency is crumbling. Its founding fable – which prophesied the nation states’ glorious enmeshment in world government and supply chains – has metastasised into a parable of the perils of globalization.
For all the attempts to depict the Ukraine war as a black swan event, a spike in basic commodity prices in a volatile world was perfectly predictable. People are left wondering why their leaders failed to make contingency plans, given that they sit on vast untapped reserves of gas, oil and coal. The EU was supine in the face of Putin’s bid to keep the region’s market divided and dominate its more compromised powers.
Nor is there any explanation for this fiasco apart from decades of failed assumptions and policy missteps by our governing class. In the wake of the financial crash, the establishment just about managed to convince the public to submit to the purifying rigours of austerity, persuading voters that we all shared the blame for the crisis and must all play a role in atoning for the country’s mistakes. This time, elites cannot shirk responsibility for the consequences of their fatal errors.
Simply put, the emperor has no clothes. The establishment simply has no message for voters in the face of hardship. The only vision for the future it can conjure up is net zero – a dystopian agenda that takes the sacrificial politics of austerity and financialization of the world economy to new heights. Actively campaigning for boiler bans, 15mph speed limits, and speculative green bubbles may seem like madness. But it is a perfectly logical program for an Elite that has become unhinged from the real world.
There are several countries where we might see the first signs of a resulting populist revolt. The Germans must swallow national humiliation along with higher energy bills, as their political leaders are taunted on the world stage for their naive bid to prioritize economic harmony and trade links over security. According to some analysts, France, which is no stranger to protest, could be the first in Europe to experience blackouts despite its sizable nuclear industry. However, it is Britain where things could truly blow up.
The UK may well be the tinderbox of Europe. With the ousting of Boris Johnson and his imminent replacement by a politician who will not have led his or her party into power via a general election, the political context is particularly febrile. Even more so given disillusionment at the waste of the past two years and the failure of the Government to capitalize on Brexit to renew the country.
Moreover, Britain’s consumers look set to be clobbered harder than most. They already have the highest inflation in all of the G7; but, a succession of fatal policy mistakes – from the closure of gas storage facilities to the failure to exploit our domestic oil and gas reserves – mean that they will remain unnecessarily vulnerable to sky-high international energy prices for years to come, with all the pain that will bring consumers.
Despite this, Britons are set to receive less assistance from the Government than their counterparts in other Western countries. The 5p cut in fuel duty has been estimated as the second smallest in Europe. While our politicians pontificate about insulating more homes at some point in the distant future, Spain has made many train journeys free until the end of the year. France has vowed to fully nationalize the energy giant EDF, which it had already forced to cap consumer bills.
A civil disobedience movement, inspired by the poll tax revolt, has already been launched in the UK. The Don’t Pay Campaign, which is urging people to join a “mass non-payment strike” when the energy price cap is raised in October, has gained thousands of online supporters.
And if it does take off, what are the authorities going to be able to do about it? Such is the scale of the coming price rises that millions may simply be unable to pay their bills – including pensioners and families hitherto part of the middle classes. The risk is that, bogged down with leadership hustings, the Tories realise too late that they need to act. The predicament we face is likely game-changing. We have barely begun to grasp how unpredictable the next few years are likely to be – and how poorly prepared we are to face the consequences.
If weaning ourselves off Russia – a comparatively small economy – is this painful, how are we to end our addiction to cheap goods from China? If we do manage to achieve a greater degree of energy self-reliance, how will we contend with the collapse of petro-states in the Middle East and the migration crisis that is likely to follow?
This may sound like a grim prognosis, but particularly in Britain it does feel as if we just may have entered the final act of an economic system that has patently failed. It is clearer than ever that the emperor has no clothes and has no more stories to distract us with. ✪
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