Rather than a “New Cold War,” we are now witnessing the culmination of an economic war with Russia, where the financial, energy, and capital markets are the battlegrounds. In his timely book, Economic War: Ukraine and the Global Conflict between Russia and the West, political risk analyst and consultant Maximilian Hess takes the reader through the period in which the seeds of economic warfare are sprouting into full bloom: from the initial invasion of Ukraine in 2014 to Russia’s full-scale invasion in 2022 and beyond.  

The book skillfully delves into various economic fronts around the world, demonstrating the weaponization of economic tools such as pipelines, mining, credit, and cryptocurrencies. Each chapter unfolds like a chess game between Russia and the West, allowing the reader to map the moves of the contestants both chronologically and regionally, including Russia’s response to Western sanctions and what is at stake for each party.

There were a number of disputes in the early and mid-2000s between Russia and Ukraine over gas supplies and the terms thereof that led Russia to cut off deliveries and precipitated gas supply crunches in the wider European market. What I think people forget is that Nordstream 2 and Nordstream 1 were never intended to increase the total amount of Russian gas that could be pumped to Central Europe.

Instead, they were designed to ensure that Russia didn’t have to do it through Eastern Europe, in particular through Ukraine, so that Russia could then increase the leverage of its gas policy over Ukraine. We should have understood this risk at the time of Nordstream 2, because it was essentially designed to give Russia the same kind of leverage over other Eastern European states that it had gained over Ukraine.

Q. Why do you think Putin choose to invade Ukraine specifically in February 2022?

I think he thought it was an important time economically, when the West was weak and divided. He hoped that the sanctions response and the economic response would be less intense than it might have been at another time. Thinking in terms of change in 2020 and 2021, the end of the Trump administration and then the Biden administration that follows made it clear that there would be a concerted sanctions strategy.

He hoped that European unity would be weak and insufficient to resist him. Inflationary pressures from COVID-19 had already increased, and Russia had already begun to cut off its gas supplies to Europe. At the same time, he was preparing his troops to invade Ukraine and saw it as a moment when the West would be relatively weak economically and relatively vulnerable. Therefore, less likely to act against him and less likely to act in support of Ukraine. Which, of course, turned out to be a very big strategic miscalculation on his part.

Q. Has Russia’s strategy of crippling Europe with gas cuts failed?

Largely, I think it has failed. Not because of any failure within the strategy itself but because of collaborative actions on the part of the West. Intelligence was shared by the United States, by officials who had spoken on the record and had reached the assessment that there was a small chance that Russia wouldn’t invade Ukraine in October 2021, simply the brutal nature of Russia’s onslaught in February, and the fact that the Europeans saw an army of the largest form that had taken this action in Europe since World War II, made it clear to many European leaders that they had no other choice.

Putin was preparing, and did prepare, for a scenario in which Europe was fully on board with the sanctions regime through Russia’s fortress balance sheet strategy, the Kremlin’s process of building up large reserves of ‘hard currencies’ and gold. But now that the initial pain of that gas strategy is being felt, and inflation has been at such high levels for a year and a half. There are obviously still many politicians, particularly in Europe, such as former French President Nicolas Sarkozy, who are calling for a softer approach to Russia on these issues. That’s why Putin’s strategy is not one that is over; by threatening more economic pain, he can also undermine support for Ukraine in the long term. Global gas markets are much more fragile, and we could still see a new spike in gas prices this winter as a result of the Kremlin’s actions.

Q. Did Putin pull out of the Black Sea grain deal in an attempt to revive the inflation weapon?

I believe very strongly that this is what he is trying to do. It also gives him the tool of offering grain to African countries to gain more support there. I think we should be prepared for more actions by the Kremlin to deliberately try to stir up inflationary pressures, possibly trying to find a way to drive up prices, as well. The Kremlin really has only one major option, which is to threaten an export embargo and actually take action to make it look credible. That option is difficult because Russia’s budget is now so skewed toward the military.

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The world’s second-largest economy is currently struggling with deflation for the first time since 2020. Last month, China reported that its consumer prices fell to 0.3% with a 4.4% year-on-year drop in producer prices. This comes as a surprise as the rest of the world is grappling with inflation.

While lower prices may sound attractive to the ordinary consumer, economists warn that deflation may be the tip of a horrible iceberg. Economists perceive deflation as a bad economic sign, which should be reversed immediately.

Why is China struggling with deflation in the first place? What are the implications of its current economic situation? And, will China become the next Japan, in terms of economic recession?

The effect of COVID-19 on the Chinese public

In 2020, the U.S. and UK governments enacted aid programs known as “social security nets.” The programs aimed to relieve some of the economic hardships that came with COVID-19.

In March 2020, the U.S. government introduced its Economic Security Act, known as the “CARES Act.” The act provided “economic impact payments” of up to $1,200 per adult and $500 per child. In December 2020, the COVID-related Tax Relief Act authorized additional payments of up to $600 per adult and per child for eligible individuals. Similar aid programs were also applied in 2021 to help homeless, poor, and unemployed Americans adapt to the economic fallout.

Similarly, in March 2020, the British government announced that it will help pay the wages of millions of workers across the country. Rishi Sunak, the Chancellor of the Exchequer and Second Lord of the Treasury at the time, declared that the government would pay up to 80% of workers’ wages if companies kept them on their payrolls. Sunak said that the government’s aid was a national effort to protect jobs from the economic turmoil of COVID-19.

These actions ultimately intended to prove to citizens that they were not alone in the economic crisis. However, that wasn’t the case for Chinese citizens. Although the Chinese economy is one of the strongest in the world, China has one of the weakest social safety nets among developed nations. The Chinese government handled the COVID-19 crisis with one of the harshest approaches, known collectively as the “zero-COVID” policies: cities were forced abruptly into lockdowns and people were forced to stay indoors. In some cities residents were not allowed outdoors except for COVID-19 tests.

This affected the employment of millions of Chinese people and led to mass unemployment. In March 2020, the beginning of the pandemic, it was estimated that 80 million Chinese workers became unemployed, causing people suddenly to lose the source of income that covered their living expenses. Meanwhile, the Chinese government only provided aid to 2.3 million people. As a result, 77.7 million people were left to fend for themselves financially during the pandemic.

The economic behavior of Chinese consumers after COVID-19

Unfortunately for the Chinese public, the government did not effectively help citizens overcome the economic crisis. Instead, government efforts were directed towards industrial manufacturing activities. As a result, when lockdown measurements were lifted, the Chinese decided to save their money instead of indulging in what is known as “revenge spending.”

Revenge spending is a term used to describe the tendency to spend more money than usual after a period of restrain or financial struggles, such as the COVID-19 pandemic. This is what happened in countries like the U.S. and the UK, and this is what China was also hoping for after the pandemic; however, the Chinese public preferred to save its money instead.

The public’s frugal spending led to the deflation of commodity prices, as the demand for such items was not high. In the first half of 2023, the savings of Chinese families in banks were reported to have increased to ¥12 trillion, equivalent to $1.7 trillion. Families typically would spend this money on daily expenses or real estate. This has changed as a result of the suffering real estate industry after COVID-19.

Since 2021, the Chinese real estate industry has been drowning in increasing crises. On August 8, 2023, Country Garden, the largest real estate developer in China, announced that it would not be able to pay its two-dollar bond coupons on time, totaling $22.5 million. The announcement led Chinese consumers to choose to save money rather than invest it, causing a decline in the overall real estate prices—a problematic development given that real estate accounts for 30% of China’s GDP.

A vicious cycle

The Chinese government understands the risk of declining real estate prices and has prohibited developers from reducing real estate prices despite their debt which currently stands at ¥13.6 trillion. The government is aware of the panic the deflation has caused among consumers.

The problem of the Chinese economy is reflected in two factors: unemployment and the “deflationary mindset.” China’s youth unemployment rate, which official resources estimate to be around 21%, is among the highest in the world. The unemployed cannot afford to get married, let alone buy real estate. This, in turn, affects the spending behavior on other commodities such as household products, which are also in decline. As a result, companies engage in competition to lower prices in order to attract consumers.

On the other hand, when prices keep dropping for a long time, a “deflationary mindset” makes an appearance in society. This refers to the idea that when prices continuously decline, consumers restrict their spending in the hope that prices will continue to drop and they can get the product for an even cheaper price in the future.

While this may sound like good news for the consumer, it is terrible news for the economy. The deflationary mindset can lead to huge company layoffs as price drops will affect their marginal profit and lead to an inability to finance their workforce. As a result, in the long run, the Chinese public will not profit from the current deflation.

Who will be affected by the deflation in China?

 The international demand for Chinese products has declined in recent months, resulting in a decline in the rate of exports as well. For example, in July, Chinese exports fell by 14.5% year-on-year, which is the largest decline in Chinese exports since February 2020 and the third consecutive monthly decline.

China hoped that domestic consumption would help make up for the decline of exports. However, the Chinese public seems to be unable to forget the experience of COVID-19 and at the moment, is preferring to save money. Even price wars are not able to change the current Chinese economic behavior. For example, Nanchengxiang restaurants in Beijing offer breakfast for just ¥3, which is less than $1. Such competitive offers have failed to reverse the deflation, which combined with the unemployment rate, is considered to be the Chinese economic miracle’s newest nightmare.

Internationally, the effect depends on the situation of individual countries. For instance, oil-producing countries would be negatively affected because of the decreased Chinese demand for oil and natural gas. Conversely, countries with a weak domestic production would benefit from the deflation in the prices of Chinese products.

The deflation that China is currently experiencing is reminiscent of the prolonged Japanese economic decline that began 25 years ago. While it is too early to say whether China will follow in Japan’s footsteps, it is an alarming possibility if the current deflation doesn’t turn into economic growth soon.

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n an era marked by unprecedented global challenges, few issues resonate as profoundly as the quest for food security. The Russian invasion of Ukraine and the grain shortage that followed showcased the grave vulnerability of existing systems. The imperative of ensuring that everyone, everywhere has access to safe, sufficient, and nutritious food looms large on the global stage. This month’s book bundle presents a curated selection of books that delve into food security, examining it from multiple angles, and offering insights, strategies, and solutions.

From the intricacies of international trade policies to the sustainability of food systems, and from the impacts of geopolitical conflicts to the strategic place of food, these books provide a comprehensive understanding of the challenges and opportunities in the realm of global food security.

Whether you are a policymaker, researcher, student, or simply a concerned global citizen, this collection provides valuable resources for understanding, navigating, and contributing to the discourse on global food security.

Food Security: Availability, Income and Productivity is a pertinent book that explores the pressing issue of global food security as our world population continues to grow. The author focuses on three key conditions necessary to achieve food security: food availability, adequate incomes, and increased agricultural productivity.

The book draws insights from history and contemporary contexts to thoroughly examine these conditions. It takes a close look at the obstacles preventing consistent food availability and discusses how to overcome these challenges. It also delves into the importance of ensuring sufficient incomes, highlighting programs like food stamps and food banks. Furthermore, the book provides valuable insights into the factors driving enhanced agricultural productivity.

Food Security caters to a broad audience, including agricultural experts, policymakers, and NGOs working in food aid. It’s also a valuable resource for students studying agriculture and public policy. The book not only informs but also encourages critical thinking about the complex task of feeding a projected nine billion people by 2050.

In a world where food scarcity is becoming increasingly worrisome, this book offers essential insights into the intricate web of food security. It provides a well-reasoned analysis that will contribute to ongoing discussions and efforts aimed at ensuring a sustainable food future for everyone.

William A. Kerr, Food Security: Availability, Income and Productivity (Edward Elgar Publishing, 2023) ISBN: 978 1 03531 270 2, 234 pages

Shadow Negotiators: How UN Organizations Shape the Rules of World Trade for Food Security by Matias E. Margulis is a groundbreaking exploration of the influence exerted by United Nations (UN) organizations within the World Trade Organization (WTO) despite their absence from the formal negotiation table. Margulis introduces the concept of “shadow negotiators,” illustrating how UN bodies strategically engage in political actions to shape multilateral trade negotiations.

The book’s primary focus is on the contentious issue of agricultural trade liberalization. It provides a detailed analysis of interventions by four UN organizations: the Food and Agriculture Organization (FAO), the World Food Programme (WFP), the Office of the High Commissioner for Human Rights (OHCHR), and the Special Rapporteur on the Right to Food (SRRTF).

Margulis unveils the innovative strategies these UN entities employ to influence global trade regulations. Importantly, he emphasizes that their motivation isn’t rooted in competition with the WTO or ideological opposition to trade liberalization. Instead, it stems from their concern that certain trade rules could negatively impact global food security, running counter to their core mission of addressing world hunger and safeguarding the right to food.

Shadow Negotiators is a meticulously researched work that offers fresh insights into the often-unseen dynamics of international trade. It’s essential reading for those interested in the intersection of trade policy and global welfare, making a valuable contribution to the field of international relations and trade studies.

Matias E. Margulis, Shadow Negotiators: How UN Organizations Shape the Rules of World Trade for Food Security (Stanford University Press, 2023) ISBN: 9781503633520, 292 pages

Universal Food Security: How to End Hunger While Protecting the Planet by Glenn Denning explores the path towards a world where hunger and malnutrition are eradicated, and everyone can access healthy and abundant food for a productive life. The book emphasizes the need to transform our food systems, focusing on sustainability and environmental restoration, from production to distribution.

Denning, drawing from his extensive experience in over fifty countries, offers a practical guide to making healthy diets accessible to all while ensuring sustainability. He identifies key priorities, including sustainable agriculture intensification, robust market infrastructure, responsible postharvest practices, promoting healthy eating, and establishing social safety nets. The book underscores the pivotal role of practitioner-leaders in driving this transformation, highlighting the importance of education and development in instigating change.

But beyond the roadmap, Denning reminds us that the engine driving this transformation is practitioner-leadership, underscored by education and development. This book stands as a testament to the potential for meaningful change when individuals and institutions commit to reshaping our world, making universal food security not merely a dream but a tangible and sustainable reality.

Glenn Denning, Universal Food Security: How to End Hunger While Protecting the Planet (Columbia University Press, 2023) ISBN: 9780231197618, 448 pages

The Russia-Ukraine Conflict and Global Food Security explores the global food security implications of Russia’s invasion of Ukraine in February 2022, which occurred during a period of already high food prices due to the COVID-19 pandemic. The book highlights the importance of the Black Sea region for global food production and Russia’s role in supplying natural gas and fertilizers.

The potential disruption of trade in this region posed a significant threat, with the potential to raise food prices and worsen poverty and hunger in vulnerable countries. The conflict primarily impacted trade in cereals and vegetable oils, fertilizer exports, and energy costs, potentially pushing millions into hunger and poverty.

The International Food Policy Research Institute (IFPRI) responded swiftly by providing information and policy advice. They established a blog series and online resources to disseminate critical information rapidly. This book compiles these blog posts, offering an overview of the crisis’s progression, international responses, and lessons for ensuring food security in the wake of disruptions.

This book provides essential insights into a rapidly evolving crisis with far-reaching implications for global food security, making it valuable for policymakers and researchers.

Joseph W. Glauber, Ed. and David Laborde Debucquet. Ed., The Russia-Ukraine Conflict and Global Food Security (IFPRI, 2023) ISBN: 9780896294394, 196 pages

Bread and Autocracy: Food, Politics, and Security in Putin’s Russia offers a compelling analysis of the pivotal role food has played in Russian politics from the 1917 Revolution to the present under Putin’s leadership. The authors, Janetta Azarieva, Yitzhak M. Brudny, and Eugene Finkel, argue that Russia’s transition from a grain importer to a global food exporter was a deliberate, long-term strategy aimed at enhancing national security and regime stability. This focus on food self-sufficiency sets Russia apart from other autocracies, as it prioritizes domestic food production over imports, highlighting its significance in maintaining autocratic rule.

The book’s relevance is heightened in today’s world, where food issues are once again at the forefront of global concerns and nations are emphasizing self-reliance. Bread and Autocracy provides a timely and comprehensive exploration of Russia’s unique approach to food politics, shedding light on its implications for both domestic and international affairs. It is a valuable read for those seeking a deeper understanding of Russia’s distinctive stance on food and its impact on political power. The book will be available in hardcover on September 1, 2023.

Janetta Azarieva, Yitzhak M. Brudny, and Eugene Finkel, Bread and Autocracy: Food, Politics, and Security in Putin’s Russia (Oxford University Press, 2023) ISBN: 9780197684368, 525 pages

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glance at the history of the global economy reveals that certain critical junctures have been decisive for developing countries. And in keeping with the adage that history repeats itself, these critical junctures share some striking similarities: there are noticeable parallels between the historical period of 1971-1982 and today in terms of debt burden, which is a systemic challenge for developing countries and casts a shadow over their economic aspirations.

Let’s take a brief journey in history. In 1971, the U.S. left the Bretton Woods system, breaking the dollar’s link to gold. This bold move removed an important obstacle for the Fed, the U.S. central bank, enabling it to pursue a more inflationary monetary policy to finance the U.S. Treasury’s budget deficit.

After the collapse of the Bretton Woods system, money supply in the United States literally exploded. At the same time, the 1970s witnessed significant geopolitical upheavals, marked by the oil crisis caused by conflicts, wars, and political changes in the Middle East.

As oil-rich Middle Eastern nations restricted the flow of oil to the West, oil prices quadrupled in a short period of time. The surge in money supply and oil prices inevitably sparked inflation, which soared to double-digit levels. But, inflation was not the only problem as oil shortages also affected industrial production and transportation. Western countries faced both high inflation and sluggish economic activity—an economic stalemate known as stagflation.

The effects of stagflation reverberated throughout Western society and led to significant political changes. In 1979, Margaret Thatcher became the first female prime minister of the United Kingdom, while Ronald Reagan entered the White House shortly thereafter. These conservative leaders embraced bold economic policies based on neoliberal arguments. To tackle inflation head-on, they implemented fiscal austerity while giving central banks the green light to raise interest rates.

Up to this point, developing countries have not been major players in our story. However, that changed as global interest rates started to increase. In the 1970s, abundant liquidity and petrodollars provided developing countries with a promising opportunity to borrow. Particularly in Latin America, many countries took on significant debt burdens to finance their industrialization and development projects.

A significant portion of this debt was based on floating interest rates. In the 1970s, when liquidity was abundant and interest rates low, repaying this debt did not seem difficult. But things changed in the early 1980s and rising global interest rates made it harder to roll over debt.

The debt crisis that erupted in Mexico in 1982 spread first to Latin America and then to other developing countries around the world. Many countries turned to the IMF for help in overcoming their economic challenges, but the IMF’s support came with harsh conditions, namely the implementation of neoliberal policies that came to be known as the “Washington Consensus.” There was a sigh of relief for a while, but it did not last long.

As a result of the pandemic, supply chains experienced production bottlenecks, international transportation became more difficult, protectionist policies were put in place to discourage critical export items, and some countries stockpiled raw materials as a precaution. These events made the supply of intermediate goods very difficult and production costs began to rise. On top of all these developments came Russia’s invasion of Ukraine. With the outbreak of war, energy prices soared, fueling inflation.

The global economy faced the highest inflation in 40 years in 2022. Major central banks such as the Fed, the European Central Bank, and the Bank of England tightened monetary policy to fight inflation, and other central banks followed suit with global interest rates reaching 20–25-year highs. Debt repayment became a major headache due to, on the one hand, the increased need for borrowing due to the difficult economic conditions of the pandemic period and, on the other, the interest rate hikes due to post-pandemic inflation.

In the current global economic landscape, cumulative global debt exceeds an alarming $300 trillion, with developing countries accounting for a substantial share of about $100 trillion of this debt stock. Among the various components of this debt composition, it is evident that external debt is emerging as a prominent concern for developing countries.

The challenges posed by external debt arise not only from the escalation of interest rates, but also from the depreciation of local currencies, which exacerbates the complexity of debt repayment. External debt to gross national income ratio in low- and middle-income countries (excluding China) has increased from 25.6% in 2010 to 36.3% in 2021.

Rising global interest rates are making debt management more difficult, especially for poor countries. According to IMF calculations, eleven poor countries including Ghana, Mozambique, Sudan, Zambia, and Zimbabwe are in debt distress. Twenty-five countries, on the other hand, are in the high-risk debt category. It is important to underline that the aforementioned list does not encompass middle-income countries such as Sri Lanka and Lebanon, which grapple with significant debt burdens, as well as the prominent G20 member Argentina. Obviously, these countries also face formidable challenges in the debt rollover process.

The United Nations Conference on Trade and Development (UNCTAD) recently published a report with striking figures on the rising burden of interest and debt. The report exposed that 3.3 billion people live in countries that spend more on interest payments than on health or education. In the period 2019-2021, interest payments by developing countries will increase by 60.4% compared to the period 2010-2012. However, public spending on development-related areas such as health, investment, and education did not keep pace with interest payments. During this period, public spending on health, investment, and education increased by 54.7%, 41.1%, and 40.8%, respectively.

The money lost to interest payments shrinks public resources that could be channeled into development-friendly areas. As global liquidity tightens and interest rates rise, the gap in borrowing conditions between countries is widening. For example, countries in Africa can borrow on average at interest rates four times higher than the U.S. Borrowing costs in Latin America and the Caribbean are 2.5 times higher. Under these circumstances, it is very difficult for developing countries to catch up with advanced economies.

In a nutshell, the triangle of inflation, interest rates, and debt burdens shows that there are similarities between the 1971-1982 period and today. External shocks such as geopolitical tensions also reinforce this similarity. Inevitably, the question arises, “Could developing countries potentially face a debt crisis similar to that of the 1980s?”

As discussed above, there has been a discernible deterioration in debt burdens and debt rollovers in developing countries. However, it is important to note that the debt crisis is not all-encompassing. Although the debt ratios of major emerging economies such as China, Mexico, Brazil, Turkey, and South Africa have deteriorated, these countries are not experiencing significant difficulty in rolling over their debt despite rising interest rates.

Unlike in the 1980s, developing countries are more integrated into global trade, their economies are more diversified, and they have better macroeconomic governance. All these characteristics give emerging markets more foreign exchange earnings, flexibility, and experience in managing debt.

Nevertheless, there is little room for complacency. While upper middle-income countries may not face significant immediate challenges, it is clear in the current equation that debt has been increasingly becoming a vexing problem for low- and lower-middle-income countries.

As the cases of Sri Lanka and Lebanon illustrate, debt not only distorts key economic indicators but can also inflict significant social wounds. In addition, the growing fragility of the global economic and political landscape deserves due attention. Economic uncertainties and geopolitical risks remain high. Protectionist measures by developed countries are slowing the growth rate of global trade, which is vital for developing countries as it provides them with the foreign exchange inflows that are necessary for repaying their debt burdens.

Against this backdrop, developing countries need to be vigilant about their debt burdens, especially external debt. On the one hand, they need to embark on fiscal reforms to reduce their current debt ratios while, on the other, it is essential to accelerate the transition away from the debt-fueled growth model.

The saying “Money makes the world go round” takes a more powerful meaning in a globalized capitalist economy. But what happens when the ones at the very top of the money chain are corrupted? In this month’s book bundle, we share with you three books that explore the influence of the rich and powerful, discuss how the world really goes round, and expose the staggering cases of how corruption hides itself often in plain sight with its effects rippling into the depth of systems, societies, and the lives of each one of us.

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he COVID19 pandemic revealed to many an eye-opening trend of wealth centralization: the rich are getting richer, and governments around the world are hardly able to protect those who are most vulnerable from the detrimental economic and social effects of a crisis. Who is the culprit?

The New York Times‘s award-winning global economics journalist Peter S. Goodman presents a page-turning exposé of the global billionaire class, the “Davos Man,” and its hostile takeover of the world. Davos Man documents billionaires’ exploitation of the COVID19 pandemic, which turned “taxpayer-financed bailout packages into corporate welfare schemes.” This global billionaire class instrumentalized its power to conceal the truth by hiring lobbyists, PR managers, and journalists in media.

Furthermore, Goodman uncovers the concealed impacts of their oligarchic control reaching into every branch of society and modern life, from wages to housing, healthcare to everyday products and taxation. He argues that their systematic plunder ultimately destabilized democracy by widening wealth inequality, leaving governing systems vulnerable, and triggering the rise of anti-democratic nationalism. He provides the answer to the problem of wider context: how did the liberal democratic order become a breeding ground for the right-wing hate?

Goodman not only provides a vividly written description of the realm of the ultra-rich but more importantly the realities of those who are dissipated by their appropriation all around the world including accounts from a blue-collar worker in Buenos Aires, a Bangladeshi migrant in Qatar, a doctor in Seattle during the COVID19 pandemic, an African immigrant in Sweden, a textile manufacturer in Italy, and an Amazon warehouse employee in New York City. Davos Man is a must-read for those concerned about inequality, economic justice, the resilience of societies, democracy, and the great challenges of our time.

Peter S. Goodman, Davos Man: How the Billionaires Devoured the World (Custom House 2022) ISBN: 9780063078314, 472 pages

The anonymous leak of the Panama Papers in 2016 revealed millions of financial and legal documents that show how ultra-high-net-worth individuals hide their money using complex webs of offshore vehicles. How were these structures set and who plays a role?

Spiderweb Capitalism uncovers the shadow economy and the mechanics behind the illicit movement of wealth across borders through the invisible, complex networks of lawyers, accountants, company secretaries, and fixers.

Sociologist Kimberly Kay Hoang traveled the globe to follow the money through a web-like supersystem and conducted hundreds of in-depth interviews with these ultra-high-net-worth individuals, private wealth managers, fund managers, entrepreneurs, C-suite executives, bankers, auditors, and other financial professionals to find an answer.

Hoang reveals the strategies behind spiderweb capitalism and examines the moral dilemmas of making money in legal, financial, and political gray zones as she traces the flow of capital from offshore funds in places like the Cayman Islands, Samoa, and Panama to special-purpose vehicles and holding companies in Singapore and Hong Kong and risky markets in Vietnam and Myanmar. How are these smaller markets interconnected in a broader system of global capitalism?

Spiderweb Capitalism sheds critical light on how global elites capitalize on risky frontier markets.  Hoang argues that spiderweb capitalism explains the rapid rise of foreign capital in risky markets with low levels of trust and cooperation. Economic growth in such markets is a consequence of tightly embedded relations between the economic elite and political elites that result in a variety of corruptions.

Contrary to the “economic mantra that development can only occur in economies with a strong rule of law,” Spiderweb Capitalism shows a paradox of global economic growth sustained through states where the line separating the legal from the corrupt is not always clear. Hoang’s research further reveals that old paradigms like First World/Third World and Global North/Global South are no longer useful for framing the global economy.

Spiderweb Capitalism is a unique and worthwhile read, not only uncovering the dynamics of a global system of corruption but also the sociological backgrounds of playing in the grey.

Kimberly Kay Hoang, Spiderweb Capitalism: How Global Elites Exploit Frontier Markets (Princeton University Press 2022) ISBN: 9780691229119, 288 pages

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n Philanthrocapitalism and the Erosion of Democracy, activist Dr. Vandana Shiva compiles essays and articles from more than 20 authors and organizations to show how ruthless capitalistic exploitation branded as philanthropic altruism forges a direct path to global destruction. According to David Orr, philanthrocapitalists are those who “promise to solve hunger, disease, poverty, and a rapidly destabilizing climate often by selling us more of the same things that made them very rich,” which oftentimes ignores the root causes and inequities.

How do global capitalists wield philanthropy to monopolize and privatize land use, food production, and the public health sector effectively? Through various initiatives, suborganizations, development schemes, and funding mechanisms. The book points out that the Bill & Melinda Gates Foundation’s empire, in particular, is an intricate network of power and influence solidified by targeted and well-financed PR campaigns to shape public opinion in pursuit of profit and market expansion.

Philanthrocapitalism and the Erosion of Democracy criticizes the Bill & Melinda Gates Foundation and similar organizations’ many privileged relationships with private companies, governments, and the World Health Organization that allow them exclusively to set the global agenda on health. The book argues that simplified solutions based on technical and scientific developments introduced by these organizations are often narrow in scope and remain insufficient in solving complex problems. Furthermore, they corrode the integrity of democratic institutions guised under a banner of future-oriented innovation.

Philanthrocapitalism and the Erosion of Democracy reveals the destructive power of overly capitalistic systems that enable mass human suffering and environmental catastrophe via the entanglement of private investment and public policy, and aims to bring forward democratic discussions about transparency, accountability, and inclusivity.

Vandana Shiva, Philanthrocapitalism and the Erosion of Democracy: A Global Citizen’s Report on the Corporate Control of Technology, Health, and Agriculture (Synergetic Press 2022) ISBN: 9780907791911, 240 pages