Eswar Prasad

It's a pleasure to be on with you.

You know, in the 1990s, after the Soviet Union fell apart, the U.S.

became the dominant power in every respect, economic, military, financial.

We are now in a position where economic power at least is somewhat more evenly distributed with China and many other emerging market economies, you know, beginning to play quite an important role in the world economy.

So as an economist, one's natural instinct is to think that competition is usually a good thing.

It generates discipline, efficiency and stability.

So I was going to write a book about how we might just be in a volatile period of transition to a new equilibrium where things would be more stable again, and I was going to write about all the forces that would take us back towards this new equilibrium.

Unfortunately, as I started thinking about each of these forces that I had in mind, it became apparent to me that they may be leading to instability rather than stability.

So that became the defining theme of the book, that economics, domestic politics, and geopolitics are stuck in this negative feedback loop, which means they're sort of bringing out the worst in each other.

And one simple example comes from globalization.

You know, globalization used to be seen as a positive sum game, where countries could benefit mutually from trade, and that would be an offset to what is intrinsically the zero-sum game of geopolitics, where one country can gain influence only at the expense of another.

But now even globalization has become seen as a zero-sum game, so it isn't offsetting the zero-sum game of geopolitics.

And worse, some of the negative dynamics of globalization have started infecting domestic politics, not just in the U.S., but in many other countries.

So that's the doom loop we are stuck in now.

So my book came out a couple of weeks after Davos, but I was at Davos and got to talk about the book.

And the reaction I got at the panels and closed-door meetings where I talked about the findings of the book was that it seemed to be a book for the moment.

Of course, it had been written beforehand.

A long time before that.

In fact, I should tell you that the first draft of the book was completed in October 2024, just before the November elections.

And I had thought the book seemed a little too dark.