How David Graeber Changed the Way We See Money

The radical anthropologist was that rare figure: a scholar who was also an activist.

In the third edition of the college-level textbook Macroeconomics, the economists Andrew Abel and future Federal Reserve Chairman Ben Bernanke blithely assert that “since the earliest times almost all societies … have used money.” They say that money arises from the inefficiency of barter—of trading one good for another—because “finding someone who has the item you want and is willing to exchange that item for something you have is both difficult and time-consuming.”

The evolution from barter to money is an old story in economics, repeated down the centuries in one form or another, to the point that even children are aware of it. It also happens to be only that: a story, and one with precious little evidence to back it up outside the heads of those who tell it.

While some economists imagine primordial villages and basic agricultural systems where birds are exchanged for flowers to illustrate the history of money, Abel and Bernanke come up with something much more immediate: The economist is hungry.

Barter systems would indeed make it difficult for an economist to eat lunch. Would a restaurateur exchange his goods for a lecture on monetary policy? Perhaps not, and the meal goes unsold and the economist goes hungry. Thankfully, the economist has students to whom he can sell his knowledge for dollars, which then function as a medium of exchange with which he can purchase his meal. The restaurateur is paid, the economist is satiated, while the students have learned something worthwhile.

But the only people who pay Ben Bernanke directly for his thoughts are investors. Students do not. Perhaps instead they borrow money to pay for the lecture, along with other lectures, a place to live, and the associated administrative costs of providing lectures to students. The interest on the debt eats up most of the students’ subsequent income from the job market, leaving them with no chance of ever paying off the principal in a reasonable timeframe. The debt will stick with them forever, even shaving off dollars from their Social Security checks, and make the normal mileposts of adult life—marriage, children—difficult or impossible to achieve. Fed up with their narrowed prospects, they join a group of activists who have taken up space, literally, in the shadow of New York’s financial institutions and they start talking about what they have in common: their debt. And they decide to do something about it.

Now this story, like the one the economist tells about the origin of money, is a stylized one used to illustrate broader truths about the world. But unlike what economists have said about money, it largely accords with known facts, and for that we have to thank the radical anthropologist David Graeber, who died earlier this week at the age of 59.


“We owe David so much,” the filmmaker and debt organizer Astra Taylor told me, noting immediately how he would have disapproved of using the language of obligation to encapsulate his life’s work.

Graeber had a long and distinguished career as both an activist and academic when the publication of his magnum opus, Debt: The First 5,000 Years, and his work helping organize Occupy Wall Street in 2011 made him that rare thing: a serious scholar and organizer who garnered respectful profiles in Bloomberg Businessweek and the Financial Times. He spent the last decade-plus at Goldsmiths and the London School of Economics after Yale controversially cut him off from tenure, which he suggested was due to his being “quite active in the Global Justice Movement and other anarchist-inspired projects.”

“The thing to understand about David is that he really was someone who equally had a foot in social movements and intellectual scholarly production,” Taylor said. “There are people who are known as leftists through their writing and the internet and never do anything that qualifies as organizing.”

Graeber was a link not just between grassroots movements and the academic world, but between generations of leftist social movements. He was a veteran of the anti-globalization protests in the 1990s who helped start Occupy, one of the facilitators of a debtor movement that would influence the policy agendas of Elizabeth Warren and Bernie Sanders. He was a supporter of the United Kingdom’s anti–tuition fee protests in 2010, which would be the seed of the Momentum movement and Jeremy Corbyn’s ascendance to the leadership of the Labour Party.

The question Debt sought to ask was one that seemed natural in the wake of a debt crisis that would claim millions of homes and thrust much of the industrialized world into first a sharp economic crisis, then a self-destructive series of austerity measures designed to stem the tide of sovereign debt.

What was debt? What was its history, where did it come from, and how did it take such a central role in our personal and economic lives? Why was our language of obligation and morality the same as the one used to describe our credit card bills? Why does the Lord’s Prayer ask God to “forgive us our debts as we also have forgiven our debtors”?

To even begin to answer this question, Graeber had to start with money and the bad history used to explain it. Generations of archaeologists, anthropologists, and historians had tried to find the origins of money (John Maynard Keynes referred to his own studies of money as his “Babylonian Madness”), but economists, especially in their textbooks, resorted to fancy. 

These just-so stories about how money emerged from barter can evoke a kind of childish primitivism  (“You have roosters, but you want roses,” one textbook says) or use imaginary historical examples. Even the stalwart progressive Joseph Stiglitz uses “what appears to be an imaginary New England or Midwestern town,” Graeber writes, to explain how money can replace barter, in the form of farmer Henry selling his firewood to “someone else for money” and then buying shoes from Joshua.

Graeber, in contrast, identifies the origin of money as “the most important story ever told” for economists, tracing it back to Adam Smith’s Wealth of Nations and even to Aristotle. This was “the great founding myth of economics,” he writes, that money was not in fact the creation of governments. It followed that economics was its own form of inquiry, separate from other ways of thinking about social life.

Graeber points out this account “has little to do with anything we observe when we examine how economic life is actually conducted, in real communities and marketplaces, almost anywhere—where one is much more likely to discover everyone in debt to everyone else in a dozen different ways, and that most transactions take place without the use of currency.”

Whereas the traditional account puts barter before money and money before debt, Graeber reverses this, noting that barter tends to only emerge in pre-industrialized societies when exchange happens outside of a familiar cultural context.

In the historical record of ancient societies in Mesopotamia, for example, there are prices of things that may be denominated by “money” (what an economist would call the “unit of account”). But merchants “mostly did much of their dealings on credit,” and “ordinary people buying beer from the ‘ale women’ or local innkeepers  did so by running up a tab, to be settled at harvest time in barley or anything they had on hand.”

Where debt emerged in Sumeria, so did novel forms of social domination, whose eventual effects were so dire as to necessitate harsh management of its lenders. Those early Sumerian loans to peasants quickly led to peonage, with farmers “forced into perpetual service in the lender’s household.” Fields would go unsown or not be harvested as farmers would leave their homes in order to avoid collection. The result was periodic debt amnesties.

The book covers everything from Neil Bush’s divorce to speculation that the major world religions were responses to the coin-using great empires of the “Axial Age” of 800 B.C.E. to 600 C.E. (“It would be foolish to argue that all Axial Age philosophy was simply a meditation on the nature of coinage, but …” runs one especially expansive passage.) There is a reexamination of Cortez’s conquest of the Aztecs being spurred on by his own debt, and vignettes about the functioning of debt and money in Madagascar, where Graeber did field anthropological research.

Debt’s deep dive into the whole history of civilization had a paradigm-shifting political point. Graeber wanted to show that “war, conquest and slavery … played a central role in converting human economies into market ones,” and that “historically, impersonal, commercial markets originate in theft.”

He wanted to show that not only did money not arise from barter but also that states and markets worked hand in hand in its creation. And more than that, he wanted to interrogate an economic and historical worldview that tried to “reduce all human relations to exchange, as if our ties to society, even to the cosmos itself, can be imagined on the terms of a business deal.”

He ended Debt with a call for “some kind of Biblical-style Jubilee: one that would affect both international debt and consumer debt.” This would not only

relieve so much genuine human suffering, but also … would be our way of reminding ourselves that money is not ineffable, that paying one’s debts is not the essence of morality, that all these things are human arrangements and that if democracy is to mean anything, it is the ability to all agree to arrange things in a different way.


Thanks to Debt’s almost absurd good timing, as well as his own involvement in Occupy, Graeber became one of the most prominent leaders in the post-Occupy anti-debt movement. Or rather, in the spirit of an anarchist activist, he enabled others to take the leadGraeber’s efforts in helping start what would later become the Debt Collective were more like being “a facilitator or putting a band together,” Taylor, one of the group’s leaders, said.

The initial group that Graeber helped organize, Strike Debt, instituted a “rolling jubilee,” buying up medical debt and forgiving it. The group evolved to organize challenges to student loan debt incurred at for-profit colleges and has claimed to have helped eliminate over $1 billion of debt. Its efforts garnered the respectful attention of The New Yorker, which described the jubilee as “one of the few Occupy offshoots that has had a tangible effect on people’s lives.”

Debt Collective’s work would be echoed directly by the dueling calls from Elizabeth Warren and Bernie Sanders to cancel student loan debt during the 2016 presidential campaign.

The ideas in Debt also have been picked up by the Keynes-inspired thinkers that make up the school of Modern Monetary Theory, who see the state as a tool to mobilize the economy’s resources for the common good, unlimited by its ability to tax or take on debts and deficits. Alexandria Ocasio-Cortez referenced MMT when it came to funding the Green New Deal, and a leading MMT thinker, Stephanie Kelton, worked with Sanders. One of the brightest stars in the MMT firmament, Nathan Tankus, is an avid reader and admirer of Graeber.

If we end up winning the fight over debt, money, and deficits and manage to fundamentally reshape this society it will have been in no small part of because of Graeber’s work,” Tankus said.

And while he is credited with coming up with the slogan “We are the 99 percent”—perhaps Occupy’s most enduring rhetorical legacy—he claimed that he could only be held responsible for “the 99 percent,” while “two Spanish indignados and a Greek anarchist” were responsible for “We,” and only later did a “food-not-bombs veteran put the ‘are’ between them.”

This impulse to go beyond himself, to submerge himself in the collective, wasn’t foreign to his scholarly work, either. At the time of his death, Graeber was working with archaeologist David Wengrow on a history of social inequality. It’s supposed to cover the last 42,000 years.

Inflating Away the Debt & The Wealth Effect (Lyn Alden)

00:00
but it seems like they’re fighting
00:01
deflation but probably more like
00:03
deflation of assets right so they keep
00:05
saying they can’t get the inflation they
00:07
want they can’t get it well i think i
00:08
think they’ve got it now
00:09
i think it’s a little bit over their
00:10
target at this point but
00:12
um the d but then at the same time we’re
00:14
seeing prices of everything going
00:16
through the roof from
00:17
used cars to use bicycles all the way to
00:20
all types of financial assets and all
00:21
those types of things
00:22
um so the deflation that they’re afraid
00:25
of is that really in the markets that’s
00:26
what they’re worried about stocks
00:27
dropping you know real estate dropping
00:29
bonds
00:30
crashing things like that yeah they were
00:32
well they were pretty explicit uh you
know a decade ago
00:35
when they uh point out that they wanted
to do the wealth effect so they
pretty much said they wanted to cause
asset price inflation uh you know they
00:42
just you know
00:43
described a little bit more plately uh
00:45
and so that was their goal was to
basically
increase you know housing costs again
increase uh the stock market again
00:51
uh and if you do a lot of monetary
00:53
policy without doing a lot of fiscal
00:54
policy that that’s
00:55
that’s what you tend to get now we there
00:58
were still disinflationary forces over
00:59
the course that decade because for
01:01
example
01:02
uh you know about a decade ago you had a
01:03
period of commodity over supply
01:05
uh you had the slowdown in china and so
01:08
we’ve been kind of working through this
01:09
period of commodity over supply for a
01:11
while we also of course have the rise of
01:13
shale oil which was largely unprofitable
01:15
but it still contributed
01:16
to uh you know a ton of extra supply and
01:18
therefore pretty low prices across the
01:20
board
01:21
and so we’ve been in that kind of
01:22
disinflationary commodity environment
01:24
but we had a target you know inflation
in asset prices inflation in health care
inflation and education inflation
and child care things like that where
01:32
you had you know deflation in electronic
01:34
goods you had deflation in commodities
01:36
uh deflation due to technology and kind
01:38
of offshoring things like that
01:40
uh and so you know from their
01:42
perspective uh you know they
01:44
would prefer the say the inflation rate
to be higher than the treasury yields
right because that’s how you can you can
stop uh you know debt as a percentage of
gdp uh from from continuing to grow to
control if they
01:56
have you know the potentially nominal
01:58
gdp growing faster
02:00
than the combination of debt issuance
02:02
and as a percentage of gdp and interest
02:04
rates
02:04
uh but of course i mean that’s a really
02:06
bad environment if you’re holding cash
02:07
or bonds
02:08
and so there’s no free lunch i mean
02:10
someone somewhere is getting uh screwed
02:12
over sometimes
02:13
there are certain policy regimes where
02:15
the debtors are getting screwed over
02:16
and there are other times where the the
02:18
you know the the
02:20
people that own the debt that the
02:21
creditors are getting screwed over and
02:23
so
02:23
in this environment of high leverage
02:25
they they’re they’re trying to err on
02:27
the side of essentially the the
02:28
creditors getting
02:30
uh you know screwed over uh but instead
02:32
of kind of abrupt kind of nominal losses
02:34
they’d prefer you know to basically just
02:36
fail to keep up with inflation and
02:37
that’s what you saw back in say the
02:39
1970s and 1940s
02:40
these inflationary decades ironically
02:42
they tend to deleverage things because
02:44
the bonds fail to keep up with inflation
02:46
uh but you don’t want to be the ones
02:48
holding those assets and that’s a pretty
02:50
big pool of assets
02:51
yeah definitely i guess that you kind of
02:54
talked about that and that’s what i was
02:55
trying to
02:55
figure out is like what are they trying
02:57
to optimize for because
02:59
uh to your point you know electronics
03:00
coming down and deflationary source
03:02
things like that and
03:03
for i guess it depends on which side as
03:04
you said which side you’re on but it
03:06
seems like that would be good things for
03:07
most people if prices were coming down
03:09
um asset prices i guess if you’re
03:11
holding asset prices you want them to go
03:13
up if you’re
03:13
if you want to buy them you want them to
03:15
be down right so i guess it depends but
03:17
like overall it seems like if most
03:19
people had their cost of living going
03:21
down that would be a good thing and nasa
03:22
prices going up
03:24
uh at the same time that would be kind
03:25
of a good thing so um i guess kind of
03:28
the the question was uh are they really
03:30
trying you know
03:31
i guess they’re kind of targeting the
03:32
cpi basket which is like this consumer
03:34
price of goods
03:35
basket but it seems like the big risk of
03:36
deflation is in the markets like
03:38
stocks could crash 50 80 percent the
03:41
real estate could crash 50
03:42
and that’s like a massive deflation hit
03:44
so you think that’s what they’re trying
03:45
to optimize for
03:46
i mean even though they’re always
03:47
talking about cpi pretty much i mean
03:50
they’re trying to keep asset prices up
03:51
they’re also
03:52
you know they’re increasingly talking
03:53
about kind of nominal gdp targeting
03:55
uh you know again trying to have nominal
03:57
gdp higher than uh
03:58
some of those interest rates and some of
04:00
the debt accumulation levels
04:01
uh and of course you know the the
04:03
perspective will depend on if you’re the
04:05
the monetary
04:06
authority or the fiscal authority so as
04:08
consumers we generally would prefer
04:10
uh you know price deflation uh while
04:12
still having our jobs so we don’t want
04:14
some some sort of economic contraction
04:16
uh but we want technology and things
04:18
like that to lower prices over time
04:20
so that our money goes further and
04:22
that’s you know that’s normally the best
04:24
case scenario
04:24
the only time that’s bad is if you have
a debt bubble right because then the the
04:28
real value of your debt
04:29
goes up relative to your incomes and
04:31
things like that so if you if you had
04:33
avoided that in the first place
04:35
uh then that that deflation is really
04:37
good but what policymakers are afraid of
04:38
is that because we’ve had this you know
this kind of mix of lower interest rates
and
and you know different types of policy
mixes we’ve kind of encouraged this big
debt build up
and now you know they basically have to
04:49
in their view inflate it away before
04:51
they can they can kind of stabilize
04:53
and so if you’re the federal reserve
04:54
you’re trying to hold yields
04:56
lower than the inflation rate you’re
04:57
trying to be accommodative
04:59
uh and kind of you know trying to
05:02
balance between
05:03
you know uh causing asset bubbles uh but
05:06
then also you know not wanting to crash
05:08
the market so that’s their perspective
05:10
and if you’re fiscal policy makers
05:11
mainly you want to get votes every two
05:13
years or
05:14
four years or whatever the case may be
05:16
and you want to avoid you know rising
05:18
populism you want to avoid
05:19
uh you know things like that from their
05:21
perspective and so you you know
05:22
depending on which side
05:24
you know where you work essentially if
05:25
you’re if you’re the fed or if you’re in
05:27
the
05:27
congress you have kind of two different
05:29
things you’re balancing yeah
05:31
so the tools as you’re kind of laying
05:32
them out the monetary or the fiscal
05:34
monetary being like
05:35
issuing more debt to the banks monetary
05:37
or fiscal actually like putting money
05:39
out of the streets into kind of people’s
05:40
hands
05:41
and um it seems like you know i mean i
05:44
guess as a central bank
05:45
uh what’s the quote if all you have is a
05:47
hammer the whole world looks like a nail
05:48
and they really only have a couple tools
05:50
um and really it’s you know monetary
05:52
tools and so that’s kind of like
05:53
interest rates and
05:54
and increasing the debt supply uh the
05:56
money supply but
05:58
with interest rates i mean they’re
06:00
already almost down to zero
06:02
uh nominally we can talk about real
06:03
rates et cetera which i do want to get
06:05
to
06:05
but it seems like a lot of those tools
06:07
they’re basically running out of right
06:09
interest rates are down to zero
06:10
debts at all time high economy is not
06:13
growing so the debt to gdp is is tough
06:15
to move
06:15
i mean do you see that they’re like
06:17
running out of tools i mean like how
06:19
much further can this can be kicked down
06:21
the road
06:21
uh so for the federal reserve i do view
06:23
them as as towards the end of their rope
06:25
in terms of tools and so they really
06:26
only have two tools that they mostly
06:28
it’s interest rate manipulation
06:30
and asset purchases or sales in some
06:32
cases
06:34
and they have some other tools around
06:35
the margin like lending facilities and
06:36
things like that but ultimately it comes
06:38
down to
06:38
controlling them controlling uh the
06:40
price of money uh
06:41
and uh buying assets now the fiscal
06:44
authorities they
06:44
they’re the ones that you know they can
06:46
say send cash to people
06:48
uh but then they you know they have to
06:50
issue debt to do it uh
06:51
and so you have kind of i’ve described
06:53
it as like uh you know if you have like
06:55
a movie where they’re gonna launch like
06:56
a
06:56
nuclear missile like two generals have
06:58
to put their keys in at the same time to
07:00
so i viewed i view policy tools and
07:02
fiscal tools uh kind of like the two
07:04
keys there
07:04
when it comes to generating inflation uh
07:07
and so if you just have the
07:09
monetary policy that’s not generally
07:11
very inflationary on its own because you
07:13
can’t directly get money to people
07:15
right so the federal reserve can’t send
07:17
money to people all they can do
07:18
is control interest rates uh and they
07:20
can increase the amount of bank reserves
07:22
in the system but then those get stock
07:23
banking system because banks aren’t
07:24
doing loans uh and so
07:26
you have reserves go up you
07:27
re-capitalize the banks but doesn’t
07:28
actually get out into the public
07:30
on the other hand the fiscal authority
07:31
can send money to whoever they want as
07:32
long as they have a consensus
07:34
but they have to issue bonds to do it
07:37
and then therefore someone has to buy
07:38
those bonds which sucks money out of the
07:40
system
07:41
but then if you combine the two and the
07:43
treasury sends money to people they
07:44
issue bonds
07:45
which the federal reserve creates new
07:46
base money and buys those bonds and
07:48
holds them forever
07:49
well then you’re just literally
07:50
essentially creating new base money and
07:52
directing it into the economy
07:54
and that’s how you get say that the you
07:56
know the 25 percent broad money supply
07:58
year of year change that we had you know
08:00
in 2020
08:01
and so that tends to be a more
08:02
inflationary environment especially if
08:05
they were to sustain it for several
08:06
years
08:07
and so i think you know as we go forward
08:09
obviously right now we’re having some
08:10
base effects
08:11
right so we’re in in say march april
08:14
may june you’re comparing it to the 2020
08:16
period which was like the
08:17
kind of disinflationary crunch they had
08:19
during the worst part of the lockdown
08:21
and so we’re going to get some pretty
08:22
high bass effects like we’re probably
08:23
going to see
08:24
uh you know even even official cpi we’re
08:26
probably going to see it over three
08:27
percent year-over-year
08:28
uh but then the big question is going
08:30
forward uh you know what are we going to
08:31
do with
08:32
are they going to do like an
08:33
infrastructure build that also gets
08:34
monetized
08:35
are they going to do another round of
08:36
aid things like that and some of those
08:38
if they were to continue could be pretty
08:40
uh inflationary to a certain extent
08:42
especially because
08:44
you know a lot of economists don’t
08:45
incorporate say the current situation of
08:47
commodity markets
08:48
uh and so of course you know that kind
08:50
of say 15-year cycle of commodity supply
08:53
and commodity demand
08:54
has a big impact on inflation and so
08:56
when you’re in a period of commodity
08:58
oversupply
08:59
as it were for the past decade you know
09:01
that tends to keep a lid on
09:02
on most types of inflation whereas when
09:05
you’re in a period of
09:06
you know you say you haven’t done a lot
09:07
of capex uh you know you haven’t kind of
09:09
brought new minds uh
09:11
to market you haven’t found like new new
09:13
big uh you know we haven’t done the
09:14
investment
09:16
if you were to get that increase in
09:17
commodity demand uh well then
09:19
uh you know you have higher commodity
09:21
prices and that’s what we’re seeing
09:22
we’re starting to see that kind of show
09:23
up in the market where
09:25
many commodities are still below where
09:26
they were 10 to 15 years ago with some
09:28
exceptions like beef lumber
09:30
gold touch new all-time highs most of
09:32
them are still below their all-time
09:33
highs but they’re starting to break out
09:35
from their their big declining trend
09:36
they had
09:37
and so it does look like the 2020s could
09:39
be a more inflationary decade with
09:41
tighter commodity markets uh big big
09:44
increases in the broad money supply
09:45
and that money getting to people rather
09:48
than just stuck in the banking system
09:49
which of course can benefit some people
09:51
but then you have that that that risk of
09:53
inflation
09:54
where you you increase the broad money
09:55
supply by a lot but you haven’t
09:56
increased the the goods and services by
09:58
an equal amount

Luke Gromen – Oil Cartel Siding With China Can Destabilize the Petrodollar

Sept 2018 prediction: early 2020 US Will have to monetize the debt

SBTV picks the mind of Luke Gromen, founder of Forest For The Trees LLC, about an impending dollar crisis and what likely scenarios can destabilize the petrodollar in the coming years. We also asked him what his ideal monetary system would be if he got to choose it. Forest For The Trees website: https://fftt-llc.com

Discussed in this interview:

05:08 Why a dollar crisis is coming?

12:14 US dollar still the center of the world?

13:07 Gold is wanted as a global neutral reserve asset.

14:35 Saudis’ view of the Petro-dollar: conflicted

23:10 A world where oil is priced in multiple currencies

28:33 No credible reserve currency alternatives to the dollar?

31:29 Bancor: A suitable replacement for the dollar standard?

34:08 How should investors navigate the impending dollar crisis?

Ten reasons why a ‘Greater Depression’ for the 2020s is inevitable

After the 2007-09 financial crisis, the imbalances and risks pervading the global economy were exacerbated by policy mistakes. So, rather than address the structural problems that the financial collapse and ensuing recession revealed, governments mostly kicked the can down the road, creating major downside risks that made another crisis inevitable. And now that it has arrived, the risks are growing even more acute. Unfortunately, even if the Greater Recession leads to a lacklustre U-shaped recovery this year, an L-shaped “Greater Depression” will follow later in this decade, owing to 10 ominous and risky trends.

The first trend concerns deficits and their corollary risks: debts and defaults. The policy response to the Covid-19 crisis entails a massive increase in fiscal deficits – on the order of 10% of GDP or more – at a time when public debt levels in many countries were already high, if not unsustainable.

Worse, the loss of income for many households and firms means that private-sector debt levels will become unsustainable, too, potentially leading to mass defaults and bankruptcies. Together with soaring levels of public debt, this all but ensures a more anaemic recovery than the one that followed the Great Recession a decade ago.

A second factor is the demographic timebomb in advanced economies. The Covid-19 crisis shows that much more public spending must be allocated to health systems, and that universal healthcare and other relevant public goods are necessities, not luxuries. Yet, because most developed countries have ageing societies, funding such outlays in the future will make the implicit debts from today’s unfunded healthcare and social security systems even larger.

A third issue is the growing risk of deflation. In addition to causing a deep recession, the crisis is also creating a massive slack in goods (unused machines and capacity) and labour markets (mass unemployment), as well as driving a price collapse in commodities such as oil and industrial metals. That makes debt deflation likely, increasing the risk of insolvency.

A fourth (related) factor will be currency debasement. As central banks try to fight deflation and head off the risk of surging interest rates (following from the massive debt build-up), monetary policies will become even more unconventional and far-reaching. In the short run, governments will need to run monetised fiscal deficits to avoid depression and deflation. Yet, over time, the permanent negative supply shocks from accelerated de-globalisation and renewed protectionism will make stagflation all but inevitable.

A fifth issue is the broader digital disruption of the economy. With millions of people losing their jobs or working and earning less, the income and wealth gaps of the 21st-century economy will widen further. To guard against future supply-chain shocks, companies in advanced economies will re-shore production from low-cost regions to higher-cost domestic markets. But rather than helping workers at home, this trend will accelerate the pace of automation, putting downward pressure on wages and further fanning the flames of populism, nationalism, and xenophobia.

This points to the sixth major factor: deglobalisation. The pandemic is accelerating trends toward balkanisation and fragmentation that were already well underway. The US and China will decouple faster, and most countries will respond by adopting still more protectionist policies to shield domestic firms and workers from global disruptions. The post-pandemic world will be marked by tighter restrictions on the movement of goods, services, capital, labour, technology, data, and information. This is already happening in the pharmaceutical, medical-equipment, and food sectors, where governments are imposing export restrictions and other protectionist measures in response to the crisis.

The backlash against democracy will reinforce this trend. Populist leaders often benefit from economic weakness, mass unemployment, and rising inequality. Under conditions of heightened economic insecurity, there will be a strong impulse to scapegoat foreigners for the crisis. Blue-collar workers and broad cohorts of the middle class will become more susceptible to populist rhetoric, particularly proposals to restrict migration and trade.

This points to an eighth factor: the geostrategic standoff between the US and China. With the Trump administration making every effort to blame China for the pandemic, Chinese President Xi Jinping’s regime will double down on its claim that the US is conspiring to prevent China’s peaceful rise. The Sino-American decoupling in trade, technology, investment, data, and monetary arrangements will intensify.

Worse, this diplomatic breakup will set the stage for a new cold war between the US and its rivals – not just China, but also Russia, Iran, and North Korea. With a US presidential election approaching, there is every reason to expect an upsurge in clandestine cyber warfare, potentially leading even to conventional military clashes. And because technology is the key weapon in the fight for control of the industries of the future and in combating pandemics, the US private tech sector will become increasingly integrated into the national-security-industrial complex.

A final risk that cannot be ignored is environmental disruption, which, as the Covid-19 crisis has shown, can wreak far more economic havoc than a financial crisis. Recurring epidemics (HIV since the 1980s, Sars in 2003, H1N1 in 2009, Mers in 2011, Ebola in 2014-16) are, like climate change, essentially manmade disasters, born of poor health and sanitary standards, the abuse of natural systems, and the growing interconnectivity of a globalised world. Pandemics and the many morbid symptoms of climate change will become more frequent, severe, and costly in the years ahead.

These 10 risks, already looming large before Covid-19 struck, now threaten to fuel a perfect storm that sweeps the entire global economy into a decade of despair. By the 2030s, technology and more competent political leadership may be able to reduce, resolve, or minimise many of these problems, giving rise to a more inclusive, cooperative, and stable international order. But any happy ending assumes that we find a way to survive the coming Greater Depression.

Nouriel Roubini is professor of economics at New York University’s Stern School of Business. He has worked for the International Monetary Fund, the US Federal Reserve, and the World Bank.