‘Why shouldn’t it be as bad as the 1970s?’
Historian Niall Ferguson warns the world is sleepwalking into an era of political and economic upheaval akin to the 1970s — only worse.
‘Why shouldn’t it be as bad as the 1970s?’
Last Updated: Sept. 4, 2022
Clive McKeef
“I’m going to go out on a limb: Let’s consider the possibility that the 2020s could actually be worse than the 1970s.”
— Niall Ferguson, historian and author of 16 books
Historian Niall Ferguson warned Friday that the world is sleepwalking into an era of political and economic upheaval akin to the 1970s — only worse.
Speaking to CNBC at the Ambrosetti Forum in Italy, Ferguson said the catalysts had already occurred to spark a repeat of the 1970s, a period characterized by an OPEC oil embargo, Middle East war and high inflation. Yet this time, the severity of recent shocks was likely to be greater and more sustained.
“The ingredients of the 1970s are already in place,” Ferguson, Milbank Family Senior Fellow at the Hoover Institution, Stanford University, told CNBC’s Steve Sedgwick.
“The monetary and fiscal policy mistakes of last year, which set this inflation off, are very alike to the 60s,” he said, likening recent price hikes to the high inflation of the 1970′s.
“And, as in 1973, you get a war,” he continued, referring to the 1973 Arab-Israeli War — also known as the Yom Kippur War — between Israel and a coalition of Arab states led by Egypt and Syria.
As with Russia’s current war in Ukraine, the 1973 Arab-Israeli War led to involvement from the superpowers, the Soviet Union and the U.S., leading to a wider energy crisis. Only that time, the conflict lasted just 20 days. Russia’s unprovoked invasion of Ukraine has now entered its sixth month, suggesting any repercussions for energy markets could be far worse.
“This war is lasting much longer than the 1973 war, so the energy shock it is causing is actually going to be more sustained,” said Ferguson.
Politicians and central bankers have been trying to mitigate the worst effects of the coronavirus pandemic and the Ukraine war by raising interest rates to combat inflation and reducing reliance on Russian energy imports.
But Ferguson, who has been a professor at Harvard, the London School of Economics, and New York University, and authored 16 books, including his most recent “Doom: The Politics of Catastrophe,” said there was no evidence to suggest that current crises could be avoided.
“Why shouldn’t it be as bad as the 1970s?” he said. “I’m going to go out on a limb: Let’s consider the possibility that the 2020s could actually be worse than the 1970s.”
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