It has now been 15 years since the outbreak of the global financial crisis, long enough for memoirs and professional accounts to start to appear. The process was kickstarted with the publication of Crashed by Adam Tooze in 2018, a much lauded first draft of history. A friend recounts being interrupted by a series of men in expensive suits while reading it in a coffee shop in Princeton shortly after its publication. They wanted to know whether they were in it – and, if so, how they came off. The people involved have an eye to their legacies.
That may include the three authors of this book, which attempts to apply the lessons of the crisis to current problems. Each has a different perspective. One, Mohamed El-Erian is president of Queens’ College, Cambridge and chief economic adviser at the financial giant Allianz. The book recounts how his former employer, the investment management firm Pimco, gamed out the unlikely scenario of Lehman Brothers collapsing in a disorderly fashion, leaving them well positioned to reap rewards for their clients when that actually happened. Another, Michael Spence, is an academic who went from a Nobel prize in economics in 2001 to a position with the private equity firm Oak Hill Capital and a senior fellowship at the free market Hoover Institution. The third, Gordon Brown, is the most familiar. As prime minister, he hosted a G20 summit in London at the height of the crisis in March 2009, convincing the gathered powers to “flood financial markets with cash” to the tune of $1.1tn.
The summit serves as a kind of keystone for the book – an archetype of international cooperation in the face of collective danger. To Brown it was a victory, a “historic coming together of the world” as he called it at the time. He and his co-authors ask why every crisis can’t be solved this easily. Unfortunately, their own book answers that question.
Their topic is the “permacrisis” – an epithet they tell us was chosen as “word of the year” in 2022 by Collins dictionary. It refers to a series of challenges – including Covid, US-China rivalry, Russia’s invasion of Ukraine, and energy prices – that “show no signs of abating”. The “antidote”, as they put it, is growth. The only question is which “growth model” we choose. While “inclusive growth” is frequently invoked, how that inclusion is to happen is unclear. Progressive taxation is rarely mentioned, and neither is the expansion of state-provided social services. Instead, we have the slightly comedic spectacle of a Hoover fellow, an investment guru and a New Labour politician blaming everything bad on “neoliberalism” while also praising the IMF and the virtues of managing the world’s finances as though it were a household.
The trio do declare portentously that it is “two minutes to midnight – climate Armageddon”. But there’s no reckoning with how growth – even “green growth” – exacerbates this problem. While they point to the plummeting price of renewables, it is a well-known conundrum that building the capacity for a just energy transition risks overshooting planetary boundaries in the process. Some justify this in terms of a “last big push” in the form of something like a Green New Deal (an idea that itself merits no mention in the book). But none of this seems to trouble the authors, who appear more concerned with opposing price caps and insisting that money too is a “finite resource”.
In fact, the primary enemy in Permacrisis is something they call “the degrowth movement”. Their dismissal of degrowth doesn’t seem to be grounded in any real engagement with that position. One recent book, The Future Is Degrowth, by Matthias Schmelzer, Andrea Vetter and Aaron Vansintjan, sets out in fairly detailed terms a way to achieve what Brown et al claim to want: the reduction of inequality and a decarbonised economy.
Their own suggestions are split between technical fixes and moral injunction. Among the technical fixes are carbon capture, facial recognition technologies, generative AI and a Boston Dynamics robot that “can do the twist and mash the potato”. The moral injunction is to say “we cannot just assert that global problems need global solutions but must go a step further and persuade the sceptical”. This might be more persuasive if precisely that glib phrase “global problems need global solutions” wasn’t used twice elsewhere in the book.
Anxiety and even panic characterise many people’s response to the permacrisis, but none of this emotion seeps into these pages. Instead, we are held in the sheltering hand of leadership and encouraged to think that the world is run by reasonable people who respond to reasonable arguments and can be guided towards conclusions that work best for everybody. Yet what about the history of the past few decades makes us think this will be the case? Indeed, one could say the opposite.
This book implies – and its authors embody – a convergence of interest between the heads of G20 delegations and those advising top investment firms. It is no coincidence that the 2009 summit was the one moment where their model seemed to work: turning on the firehose of liquidity saved the world economy while also irrigating the gardens of the rich and powerful. The effects were predictable. As the authors note in some of their frequently cringe-inducing metaphors, “Markets became even more conditioned to believe central banks will always be their BFFs” and “policymakers found it easy to throw the money crack pipe at the markets”. “This,” they lament, “is what happens when the Fed conditions the system to expect either abundant liquidity or bailouts.” Yet the provision of just such a bailout is the supposedly heroic tale at the heart of the book. And what if the interests of those two entities – the political and financial elites – cannot be reconciled with the needs of a decarbonised future?
Perhaps what Permacrisis really does is document the moment the mouthers of multilateral platitudes exit the stage to be replaced by new forces. Among them are the new cold warriors and the coalitions they have been able to build for investment in renewable technologies and the “reshoring” of manufacturing. One can also think of Greta Thunberg, once the exemplary moraliser from the podium who has recently returned to direct action, offering herself up to be arrested and carried away bodily by police.
It is worth looking back to see how the book’s iconic 2009 meeting itself appears in the first draft of history. Tooze, whom the authors cite favourably, describes the summit as “an airtight cabal of executive power, housed in the cavernous bunkers of the ExCeL conference center, shielded from tens of thousands of protesters by a gigantic police mobilization”. The paranoid observers who believe in an all-knowing “Davos class” may have it exactly wrong. On the evidence of this book, these figures are fighting the last war instead of this one, lacking the insight and imagination to properly apprehend, let alone solve, our current crises.
• Quinn Slobodian is professor of history at Wellesley College and the author of Crack-Up Capitalism: Market Radicals and the Dream of a World Without Democracy.
• Permacrisis: A Plan to Fix a Fractured World by Gordon Brown, Mohamed El-Erian and Michael Spence is published by Simon & Schuster (£14.99). To support the Guardian and the Observer, buy a copy at guardianbookshop.com. Delivery charges may apply.
