How the West brought economic disaster on itself

July 11, 2022
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The starting point of any economy, according to financial analyst Louis Gave, is ‘energy transformed’. Without energy, producing anything becomes impossible. “The West has had 20 years of extreme good luck on this front”, he told Freddie Sayers in the UnHerd studio.

Between 2000 and 2011 China multiplied its coal production sevenfold and in 2011 the US shale revolution produced another 10 years of cheap energy. During these two decades, the American economy soared, but it did not last. The shale revolution started running on fumes, Gave tells us, and at the same time the West entered into two-front war. 

On one front are sanctions against Russia responding to the invasion of Ukraine. In February, the EU cancelled long-term, favourable contracts which sent the West into an unprecedented energy crisis. Gave puts the hastiness of these decisions down to the pressures of social media activism, or what he calls the ‘something must be done’ attitude: “Confiscating the Russian oligarchs assets, that’s something. Tearing up long-term gas contracts, that’s something.”

At the same time, on the other front, the effects of the West’s war against climate change are being brought into sharp relief. In 2000, 86% of world energy needs were met by carbon. According to Gave, the West decided that climate change was such an existential threat that it “made it impossible to invest in carbon and poured money into solar and wind” instead. Much of the EU and US even forwent nuclear power, which was the reliable alternative. 

Now both fronts are being fought at once, the West seems to have created the perfect conditions for its own economic crisis. For financial analysts like Gave, the real origins of the West’s economic downfall are almost entirely self-made. 


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