1/ Now that the Nordstream pipelines are gone it's worth thinking about how a deindustrialisation of Europe via permantly high energy prices. 🧵

2/ European manufacturing will no longer be economically viable. Energy inputs - one of the key inputs in manufacturing - will be too expensive to viably produce products. They will simply be cheaper to buy elsewhere.

3/ There is a good chance some of this manufacturing will move to America - but only in the very short-term. Why? Because investment in manufacturing creates demand for manufactured products. Manufacturing creates jobs in Europe, the workers buy the products.

4/ With no manufacturing jobs, Europeans will have far less purchasing power. If some of the manufacturing moves to America, it will be short-lived. America will realise that much of its export market has collapsed. Note that the EU makes up around 10% of US exports.

5/ Then there are the imports to the US. US continue to buy some but they will be massively more expensive due to higher input costs. The US will try to poach some of this manufacturing and onshore it, but there are numerous constraints here; skilled work, infrastructure etc.

6/ Crushing European manufacturing simply creates a black hole in Europe. This black hole sucks in everything around it as economic activity around its borders dries up. Europe will also have to respond by shutting out exports to try to revive its uncompetitive industry.

7/ Basically the only strategy for Europe will be to shut itself off and force its higher priced products on its residents. This will likely be accompanied by accelerated energy investment policies. This will result in yet more economic chaos for the West.

9/ The European energy war will likely go down in hitory, together with the Treaty of Versailles and the trade wars of the 1930s, as one of the biggest economic policy errors in history.

10/ Another thing: when Trump was elected on a platform of milder protectionism, many people rightly pointed to the 1920s and 1930s and warned against these policies. These same people appear to have supported these much more 1920s/30s-like policies this past year. Ironic.

11/ @TheCriticMag have published a full essay version of this thread. Guaranteed better than the original!

@philippilk BRICS won’t go anywhere. Russia is dying and China’s economy is slowing. South Africa LMAO and India will be the only ones to grow, along with America, for the rest of the century.

@philippilk @NinaByzantina During the great depression commodity oriented countries suffered much less than Europe . Think of Brazil for example.

@philippilk @ALuizCosta Very surprising NOT to include Brazil in the West! In fact, amazing!

@philippilk Ah yes how can the puny US stand up to the economic powerhouse of South Africa

@philippilk BRICS+ won’t grow. Chinese economy is based on imports of food and raw materials, often from continents away, and exports of finished goods. It can’t function without US maintained global order. Also 🇨🇳 population is set to collapse by 50% next 20-30 years. Good luck with that.

@philippilk Lmao what is this, 2010? I haven't heard someone talk about BRICS in forever

@philippilk Europes energy will be replenished and create jobs in the new supply routes and renewables and other replacement energy sources. Propaganda man you talk garbage….

@philippilk @HBalintne As long as the withering is eco friendly and equitable what is the problem?

@philippilk BRICS are not separate their economies ultimately depend on exports and the US consumer providing the demand

@philippilk BRICS+ does not have the purchasing power. EU AND AMERICA COMBINED HAVE A GDP OF 40 TRILLION DOLLARS

@philippilk Not gonna happen

@philippilk You get cause and effect mixed up here. The tariffs were driven by the great depression, not the other way around, and Smoot-Hawley, for example, remained law until after WWII.

@philippilk Why so pessimistic about the US? It has energy and the economic structure is much more dynamic and pragmatic. True that current US elites are a big obstacle, but that can change quickly.

@philippilk I don't agree with this point.Among BRICSs, • Chinese economy is totally dependent on export to Europe & US. • Brazil:Agri Commodity; Russia: Mineral+ Agri commodities S A, India : won't be able to manage trade defecit & resulting CAD. Although, lower price provide cushion.