Eswar Prasad argues that globalization and populism have entered a destructive feedback cycle
More competition in the zero-sum world of geopolitics is turning traditional engines of cooperation like trade into new sources of conflict and instability.
As power-hungry elites cling ever more tightly to their perches, populist politics grow stronger and the system destabilizes even further. That’s the doom loop.
Large swathes of voters around the world feel disenfranchised and are missing out on economic wealth, paving the way for populists to pounce, and creating a destructive feedback loop between misfiring economics, divided public opinion and fraught geopolitics.
The book offers a stark warning from history.
“Chronicles of many ancient civilizations reveal a recurring pattern: Extreme concentration of wealth and power among elites typically lead to collapse, with regeneration far from assured,” Prasad writes.
“When economic and political systems are captured by elites to the detriment of the broader population, they eventually come apart. The rot sets in from within and is difficult to reverse, largely because those responsible for the rot have every incentive to preserve the status quo.”
Prasad is unapologetic: There is no better system than free markets for channeling resources in a way that maximizes economic gains. The challenge, he says, is putting a floor under those being left behind.
Despite the gloomy title, the book asks how the doom loop might be stabilized.
Enda Curran Bloomberg 20 February 2026
Eswar Prasad professor at Cornell University, senior fellow at Brookings, and author of ‘The Doom Loop’
https://englundmacro.blogspot.com/2026/02/is-china-winning-geopolitical-game.html
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