Thought-Provoking Reads 2022: Economics, Geopolitics and More

Annually I try to sum up the list of books that resonated this year or added new insight. This post shares a number focused on economic, geopolitical and historical narratives while a smattering of fiction and travel inspired reads are in another post. For once, almost all of the books that resonated this year were actually published this year (or in one exception at the very end of 2021), which clearly reflects that a lot of smart folks were thinking ahead of the curve over the last few years. The list includes several on critical supply chains, the use of coercive tools and some new sectors – my favorites brought these complex strategic supply chains and financial channels to life in an approachable way. 

Critical Supply Chains: Chips and Critical Minerals

Like many folks, I’ve been trying to get smarter on key supply chains which were disrupted by the pandemic and are the target of increased (restrictive and positive) regulation from the US and allies – notably Chips and the key minerals used in battery supply chains. Chris Miller’s Chip War: the Fight for the World’s Most Critical Technology (2022, audio) was a great primer on computer chips, from the postwar time onward, with so many great stories of the interplay between US and Asian competitors, including a very useful dive into regulatory choices in the 80s/90s as well as today. The accolades the book has attracted seem well deserved and it’s a useful way to get up to speed on this critical industry and on some of the choices at play for other critical industries. 

On critical minerals Henry Sanderson’s Volt Rush: The Winners and Losers in the Race to Go Green (2022, audio) recounted the tradeoffs and costs of harvesting minerals for batteries, something US policy is trying to shift. He tours DRC, South America and even Cornwall to highlight mining and community issues and illuminates some of the political risks we energy experts need to think about as we broaden the commodities we track. In that vein, Charlie Angus’ Cobalt:The Making of a Mining Superpower (2022) uses the complex history of Ontario’s northern mining communities to highlight some challenges relevant today – especially when the Canadian government too is trying to reshape mineral supply chains to take advantage of US incentives and reduce reliance on China. Overall, there are many questions ahead about how best to scale these supply chains, what developments are realistic, how they can exacerbate other challenges and what the costs human, financial and environmentally will be. 

Katherine Blunt’s California Burning: The fall of Pacific Gas and Electric and What it Means for America’s Power Grid (2022, audiois a compelling tale of how past and ongoing mis-incentives leave parts of the power grid ill-prepared to deal with more extreme weather. She dives into the history of PG&E in Northern California, its dire safety and economic record and highlights the malincentives it and its investors present. With a push towards electrification of vehicles and transport, and increasingly extreme weather patterns, even better run utilities will face some of these tradeoffs. It illustrates the challenges of building resilience for the future and keeping the lights on today, all complicated by the time and return inconsistencies of investors and state sponsors. 

Another critical supply chain exposed this year is grain. I’ve spent a lot of time learning about current cereal and fertilizer supply chains and their links with energy and shipping, especially relating to Russia, Ukraine and Belarus. Oceans of Grain: How American Wheat Remade the World (2022) takes a long-term view on the development of grain exports, the development of and competition between US and Eurasian grain supplies over the last few centuries and the financialization of these markets. Scott Reynolds Nelson argues that  shifts in production, shipping and financial innovation helped spur industrialization of Western Europe and other consuming regions and a useful historical background to some of the food export volatility of today. 

Sanctions: History and Future Cautions

Several books on sanctions and coercive economic tools were must-reads this year and presented some new insights even for someone like me that’s spent so much time over the last few years (nay a decade) thinking about these tools, their impact of global macro and markets and politics. First up was Nicholas Mulder’s Economic Weapon: The Rise of Sanctions as a Tool of Modern War (2022) which details one of the first periods where economic sanctions were used to try to prevent war rather than being a tool of it. As with current sanctions regimes, they were more ‘effective’ when used on smaller countries, when coordinated and less so when the targets are big or when a major trading partner (the US in the 1930s) is not in the coalition. There’s a lot of useful history, including on how sanctions sparked internal autarchic policies or tried to and how increased trade restrictions of the 1930s both facilitated and complicated some of these policies. The Russian sanctions programs have brought us back to a period where economic restrictions (financial, trade, investment) are part of a war footing rather than primarily a tool aimed to avoid it, being one way in which the historical cycles definitely rhyme and give us lessons. 

Agathe Demarais’ Backfire: How Sanctions Reshape the World Against US interests (2022) starts her story with the targeted US sanctions of the last decade or so and highlights many of the “ripple effects” or (unintended) consequences of sanctions that she argues undermine the use of unilateral sanctions. The book, which benefits from Demarais’ time as a French diplomat is perhaps strongest in its assessment of divides between the US and its allies in Europe and the costs of unilateral action. This remains true today -while the Western allies have come together and stayed together on Russia, and Iranian and Chinese policy choices have led to more alignment of allies, occasionally under duress, recent issues including over the Inflation Reduction Act (IRA) incentives and burden sharing debates are here to stay and need to be managed. Agathe may be right that the time of unilateral US sanctions may have passed, but that of Western sanctions and government remaking of supply chains, but there are plenty of cautions/lessons learned around the role of the major emerging economies and how these impact leverage. She makes a case for potential new channels to challenge the dollar- while far from operationalized yet, largely due to China’s own concerns about loss of financial controls and focus on domestic supply chains, these are key to watch. 

Another key read is Julia Morse’s the Banker’s Blacklist: Unofficial Market Enforcement and the Global Fight Against Illicit Financing (2021) which illuminates the less known Financial Action Task Force (FATF), a global group that sets standards for anti-money laundering and counter-terror financing goals. Morse, a key IPE scholar sets out to explain how theoretically non-binding rules create incentives banks and many target governments have to comply. Some of the results are also relevant to more formal unilateral or multilateral sanctions which also rely on the private sector as the first line of implementation. Her cases look closely at the domestic drivers of compliance/policy change in some key EM countries, which are likely stronger in democratic or quasi-democratic states of South East Asia and the Americas, than they are for richer MENA countries like the UAE or even Turkey. 

China, US-China Competition and Strategy

On the issue of unintended consequences of US power projection, Ali Wyne’s America’s Great Power Opportunity: Revitalizing US Foreign Policy to Meet the Challenges of Strategic Competition (2022) cautions against the one-for-one response to Chinese and Russian aggression or competition (something also espoused in Rush Doshi’s study of Chinese Grand Strategy that I read last year). Ali notes that there is more agreement among US policy folks that there is a great power rivalry than what to do about it and he urges that the US (and indeed allies) focus more strategic interests versus being reactive. The Biden admin focus on using proactive positive investment tools not just restricting foreign investment fit into this strategy, though there’s plenty more to consider on how to balance this with allies, a big theme for 2023, IMO. Overall, carrying this forward also requires some reassessment of how the US deals with countries operating in the grey zone such as those in the Gulf. While not discussed in the book, the politization of the US relationship with Saudi Arabia and active “reassessement” also require such long-term thinking about interests, transactions and how it fits into US goals.

Martin Chorzempa takes a deep dive into Chinese fintech industry in China’s Cashless revolution: China’s Reinvention of Money and the End of America’s Domination of Finance and Technology (2022), which details the development of Chinese private sector payment alternatives, the more recent government efforts to rein them in, including the recent crackdowns and progress towards the government managed e-cny. Although China remains much more focused on the domestic side of these payment systems rather than internationalization of the currency at present for its own domestic and global policy reasons, understanding the plumbing of the financial system, the development of non-bank borrowing and investment and the government/private incentives is key. Overall, he also does a good job highlighting the mixed nature of Chinese policymaking and the tension between private efforts and eventual centralization.  

Some Biographies: Diplomats, Economic and Otherwise

Jon Hilsenrath’s Yellen: The Trailblazing Economist who Navigated an Era of Upheaval (2022, audio) biography of Treasury Secretary (and former Fed Chair) Janet Yellen is a good review of economic policymaking and select macroeconomic research debates of the last half century in its focus on the dual careers and contributions of Yellen and her husband George Akerlof. I left it even more impressed by her work – after all, who else has the legacy at so many US economic policybodies including the CEA, the Fed (SF and the Board) as well of course as Treasury. It also is a reminder of the importance of good partners to balance home burdens. 

A few other biographies or autobiographies also stuck with me including Marie Yovanovitch’s Lessons from the Edge (2022, audio) which highlights her learnings as a diplomat, and not just getting caught up in the events that lead to Trump’s impeachment in Ukraine. Highlighting her worries about impostor syndrome, the optimism of a young diplomat and tradeoffs made for a powerful listen. Some of the same themes came out in Nina Totenburg’s Dinners with Ruth: A Memoir on the Power of Friendships (2022, audio), which highlighted key dynamics of how to balance journalistic questioning and friendship with key figures, and many other life lessons. 

Looking ahead

There are tons of books I didn’t make it to yet, some of which I started towards year end, but haven’t read enough to decide. Here are a few on my reading list going into next year, but I’m sure others will jump on too.  Let me know what I missed, what you’re reading and what I shouldn’t next year. 

Oil, the State and War: the Foreign Policy of Petrostates (2022) Emma Ashford. I didn’t get around to this book yet, which interacts with many themes I track, but knowing Emma’s work its sure to be insightful and provocative. 

Multilateral Sanctions revisited: Lessons learned from the Work of Margaret Doxey (2022) A timely academic survey from Andrea Charron, Clara Portela and featuring work from many sanctions scholars I respect, all of whom are female.  The book focuses on multilateral sanctions especially those of the UN but likely includes themes that are broadly relevant. 

Born in Blackness: Africa, Africans and the Making of the Modern World, 1471 to the Second World War (2022) Howard French. An attempt to reinsert the key role of African trade and the elements of what became the Atlantic slave trade into the development of wealth in European history. Some interesting tidbits especially on the role of Cape Verde as an intermediary point, the wealth generated from Brazilian sugar, which outstripped precious metals in Portuguese earnings for many years, and other elements often de-emphasized in the histories I read at least.

Megathreats: The 10 Threats that will imperil our future and How to Survive Them (2022) Nouriel Roubini. I didn’t get the chance to read my former boss’ remapping of global risks but know it will highlight some important interdependencies and cautionary tales. 

Homecoming: The Path to Prosperity in a Post-Global World (2022) Rana Foroohar – about the localization and regionalization of supply chains. She picks up on the trend of near-shoring and reshoring but remains to be seen how the balancing act will be described. 

All the best for 2023! 

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