Price Wars: How the Commodities Markets Made Our Chaotic World

by Rupert Russell

A fascinating, groundbreaking exposé of how commodity traders in New York and London have destabilized societies all over the world, leaving the most vulnerable at the mercy of hunger, chaos, and war. • With a new Afterword for the ebook.For Rupert Russell, the Brexit vote was only the latest shock in a decade full of the unstoppable war in Syria, huge migrant flows into Europe, beheadings in Iraq, children placed in cages on the U.S. border. In Price Wars, he sets out on a worldwide journey to investigate what caused the wave of chaos that consumed the world in the 2010s.Russell travels to Tunisia, Iraq, Venezuela, Ukraine, East Africa, and Central America and discovers that unrest in all these places was triggered by dramatic and mysterious swings in the price of essential commodities. Deregulation of the commodities markets means that food prices can shoot up even in years of abundant harvests, causing hunger and protest. Oil prices and real-estate values can surge even when supplies are normal, enriching and emboldening dictators. It is this instability--fueled by banks and hedge funds in faraway New York and London--that has toppled regimes and unsettled the West. Price Wars is a fascinating, original, and groundbreaking exposé of the power of the commodities markets to disrupt the world.

Genres: Economics, Nonfiction, History, Politics, Finance, Business

274 pages, Kindle Edition

First published January 1, 2022

Reviews

[Steffi · Rating 5 out of 5]

Oh wow. What a great and timely book (it could probably not be more timely) which just came out in February this year ‘Price Wars: How the Commodities Markets Made Our Chaotic World’ (Doubleday, Feb 2022) by Rupert Russell. The author is not only an author but also a film maker, actually this book is also a documentary and I guess it’s part of what makes it such a great read, no footnotes but first-hand reporting from the places of apocalypse of the 21st century.

Actually, the book shook me a little. The idea it sets out sounds so simple but it’s actually so forceful and devastating once you let it sink in. Here come a few take-aways. (Also, nerd side note: I was too busy having an amazing early summer and Ramadan and didn’t summarize the book right away. And, sure enough, after only a month or so, I can only remember half of what I’ve read. Or less. It is so important to summarize books right away or you may as well not read them at all. ‘Copious notes’ is the way to go.)

#1 The idea of the book sounds too simple to be meaningful: obviously, the 2010s (and continues into the 20s) were years of madness and chaos: the Arab Spring, unstoppable wars in Syria and Yemen, ‘migrant crisis’ in Europe, ISIS beheadings in Iraq, Russia’s de-facto annexation of Crimea and parts of Ukraine, Trump, Brexit, anti-vaxxers and general ascent of far-right populists, now adding to this Cold War II (or WW III – let’s see how this goes). To name only a few ‘highlights’ of this bizarre 21st century. (I don’t think I can stomach another decade like the last one, I am already about to retreat into reading romance novels.) So, the hypothesis of the book is that all of this ‘chaos’ has an originating moment, a so-called butterfly effect that triggered these somehow connected crises in different places across the works. I think most of us have the feeling that there’s a certain link between these events that span the globe – a kind of ‘systemic link.

#2 So, according to the author, what caused all of this ‘madness’ begins with the deregulation of the commodities markets which has caused massive instability across the global, fueled by banks and hedge funds in faraway New York and London, that has ultimately toppled regimes and unsettled the West. In a nutshell, at the ‘beginning’ stands the massive neoliberal deregulation of the financial and commodities markets, most notably the 1999 repeal of the Glass-Steagall act and Commodities Futures Modernization Act in 2000 signed into law by Bill Clinton (interesting background on this in the book too). Once the real estate bubble had burst in 2007/ 2008 (think GFC), capital fled elsewhere and pension funds and other large scale investors moved into commodities which led (among other things) to an explosion in food prices. So, in 2008 you see a huge global spike in food prices and commodity prices and wheat prices. And that year produced more food than any other year in history (the same was also true in 2010 when record food prices despite record harvests sparked the Arab Spring). Just to give you an idea of the scale: investments in the commodity index grew from 13 billion in 2003 to 260 billion in 2008.


#3 A side note on the Arab Spring. Obviously, there are different stories as to what sparked it. I am not pretending to be an expert here but I do appreciate the part of the book that delves into how bread in the middle east is not just a commodity but part the social contract between the so-called regimes and the population “Now, it’s important to understand the reason why these prices are so politically volatile, or explosive, rather, is because they’re baked in, so to speak to the social contracts, right? So there’s kind of an implicit agreement between the sort of these autocrats and the people, which is okay: You give us the power, we get to maybe lavish our families on palaces and so forth. But we’re going to guarantee that you can afford to feed your family and the way in which they do this, they’ve done this since the end of the colonial period after the Second World War, is through bread subsidies, and also some form of wage or job guarantees as well. So the idea is that there is some kind of basic subsistence.” I have also come to understand also a lot more about the political economy of subsidies and dictatorships (…) since moving to the Middle East.

#4 So, it a nutshell what we saw in the 2000s is a massive expansion of the financial sector and trading in these newly deregulated financial products derivates and credit default swaps followed by the global financial crisis and recession which moved global capital into commodities and created a global food price shock in 2008 (despite record harvests, given the delinking of supply and price as a result of speculation). This food price shock then created instability in the middle east (where it upended an already shaky ‘democracy of bread’ and parts of sub-Saharan Africa, especially those countries that depend a lot on import of wheat such as Tunisia and Egypt. Regimes who had oil wealth were able to fend off the food shock price and offered other hand outs and subsidies, sch as Saudi Arabia and Kuwait (coupled with repression, of course). Of course, in the case where NATO (Libya) and Russia/ Iran (Syria) intervened, oil wealth did not impact regime survival. So, while the story of the detonation of the 2008 bust of the housing bubble and global financial crisis has been told many times, the book argues that it didn’t stop there, it triggered detonations elsewhere that came full circle also back to the west. Obviously historic events can’t be reduced to a single factor but I don’t need to explain the importance of material factors in history here 😊 I have done this a million times elsewhere hehe. Needless to say, that regimes in the Middle East were already brittle and grievances ran deeper than food prices. Once would also have to add currency wars and the entire military industrial complex to the mix but I think the commodities and oil price wars add very important lenses to making sense of the post global financial crisis madness.

#5 Anyhow. Another interesting fact about these price wars is how a price war in one commodity creates another crisis in another commodity and we can see in the most recent ‘war’ the actual price war over oil and how it’s creating crises elsewhere. So that’s another part of the butterfly effect: Between 2002 and 2012 speculative finance delivered windfalls from oil revenues to oil producing countries: 820 billion to Saudi Arabia and 580 billion to Russia – these windfall incomes directly funded the Yemen war and Russia’s geopolitical ambitions (for lack of a better word). Of course, the oil price boom also helped fund the rise of ISIS. And I know my liberal friends desperately want to make the current Ukraine war about democracy versus dictatorship but it’s quite literally about natural resources and influence over various markets (as is NATO, btw).

#6 Obviously, the above is a very rough summary of much more complex systematic relationships. The idea of ‘bread riots’ and ‘water wars’ are also not new but I think it’s important to keep in mind that these food crises and to some extent water crises are also ‘political’ not the outcome of climate change or supply/demand issues (at least for now). I didn’t need this book to understand this fact but it’s devastating nonetheless to link it back to the impact of neoliberalism and the deregulation of everything had on commodity prices and how much wars and misery this continues to create. The scary thing is also that we had the same shit about 100 years ago and we put in place all sorts of measures and regulations to prevent this all out price war and global competition (which inevitably leads of imperialist wars). One of the main aims of neoliberalism – and it’s fundamental believe in markets (supply/demand) and that prices are ‘rational’ and the best mechanism to regulate society (since politics is rent seeking) – was to abolish all of these regulations that were put in place to create some sort of stability. Successfully, I should add.

#7 On ‘the other side of the globe’ neoliberalism and austerity have also upended the social contract, including trust in liberal democracy, in the west (i.e., that you can have decent life from your labour and more or less equal opportunities) and created the perfect breeding ground for the far right, then fueled by the ‘migration crisis’ triggered by the Arab sporing and the wars associated with the latter. It’s great story telling that the book begins in a refugee camp in Greece and then moves on to Mosul.


#8 Now a word on style. I am not going to bash the good old ivory tower here but I love the fact that the author actually traveled to Tunisia, Iraq, Venezuela, Ukraine, Kenya and Central America and describes the unrest in all these places and how it was triggered by dramatic and mysterious swings in the price of essential commodities. The author also touches upon something which resonates so closely with my own experience "The prospect of apocalypse hangs over Western popular culture as a question of when. But it should be a question of where" . Often, I feel like western academics live in a world where we need to take action to prevent the apocalypse. But it’s already there, it’s a reality for maybe most of the world population.

#9 Russel’s chapter on Venezuela also stayed with me a little (again caused by the oil price crash of 2014). Venezuela after Trump's sanctions: inflation rose from 1,000 to one million percent. In 2017, the average Venezuelan lost 24 pounds, hunger became endemic. Sanctions inflicted 40,000 deaths per year. I know that this is not the right place to talk about the other ‘price war’, the economic war of sanctioning entire populations, but it’s also a sickening part of the same global political economy (this doesn’t mean to say that autocratic regimes and corruption do not contribute to ruining their economies etc.).

#10 Of course, there’s also an amazing The Dig podcast episode with Russel on the book. Actually, it’s the first time that I read a book before it was on The Dig! In the podcast, the book is also properly situated within its (Marxist) political economy context 😊 The podcast is also joined by economist Isabella Weber (who has a wery sick Sherman akscent – sometimes I am scared I sound like her) who also adds the bigger picture of dynamics in global financial capitalism to the mix ❤

[Rick Wilson · Rating 1 out of 5]

Good example of someone who thinks of a narrative, and then finds facts to fit their preconceived notions.

At a high-level, this guy was super shocked that Trump and Brexit happened. He gets a grant from some org (good hustle if you can swing it), and sets out to figure out why. Instead of doing some deeper examination about say, Bretton-Woods or global trade, he just kind of slaps in various stories and world events in some sort of pseudo sinister plot. Mixing in a weird, half baked lorenzian “Butterfly Effect” justification for why “prices” and commodity trading is the culprit for all our ills.

Problem with this approach is that there’s no end to it. Entirely mixes up causation and correlation. None of your systems are driving the runaway carriage. Claiming that commodities traders are sinisterly destabilizing the world like some sort of massive chess match is stupid. And frankly, it’s a bad modification, an educated persons version of the “deep state” conspiracy theory. “Ooooo damn dark forces at work in the world.”

This book misses much in regards to actually trading commodities and how wealth is extracted in the process. And the frustrating way its told means it’s not something easily fixed. Like that story can be told. But you need to dig a lot deeper than “commodity traders were once here and now it’s a bad place.” Because the line you’re ultimately trying to walk is that markets are not good in all situations, but you’re not trying to throw out sort the structure of capitalism. “Like we still want to import chocolate, we just don’t want the destabilizing effects of paying people who disagree with our beliefs for it” It’s a narrow window to hit and this guy misses it by mile.

Because instead of trying to understand how, like shipping or refining works, or having an ounce of self examination, this guy literally flew around the world to a bunch of impoverished nations and pointed out their suffering like some sort of benevolent voyeur. Somewhere around the chapter where he goes and travels to the Russia/Ukraine, pre-2022 mind you, line of demarcation. And he’s trying to muse about miss information and all this stuff. It’s like dude what are you doing?

So at the end of the day, what you’re left with is basically a travel memoir, for some moderately smart but out of touch dude who travels to destabilized regions of the world. But also, like, he’s not gonna go to a really bad places because they might be dangerous you know? They don’t have hotels and cab drivers to further your narrative? Right. Who wants to go to the Congo? Or Indonesia. And risk they might not fit the contrived story you’re painting? I think not.

[Jamele (BookswithJams) · Rating 2 out of 5]

I thought this started strong with some fascinating theories of how the commodities markets work and their power to cause global chaos. However, as these types of books can sometimes do, this drug on a bit and lost my interest and never quite got it back.

Thank you to Doubleday Books for the free copy to review.

[Mohamed E · Rating 2 out of 5]

If you’re not concerned with fact checking, controlling for confounding effects nor a clear understanding of the history of economic thought, then you’ll love this book.

[Anubha · Rating 4 out of 5]

This was an incredibly informative book to read about the commodities market, how they are priced and who controls them. The author compares the disturbance in the commodities market as the butterfly effect where a small perturbation gets amplified within the system leading to big effects.

He looks at the wheat market, oil market and several crisis that have occurred in various countries and claims that in 2008-2010 there was a glut of food supply and yet Arab spring occurred not for the shortage of food but because of the high prices of food which were out of reach for citizens. He makes similar case for the oil crisis, copper etc. All of these markets are manipulated by speculators and hedge funds.

I found it an informative read and could not put it down. I am taking off one star because some f the economic reasoning falls short of expectations and diverges from the macroeconomic I know and understand.

[Alex Tippett · Rating 2 out of 5]

Really disappointing. Would not suggest this if you’re looking to get a detailed look at commodity markets and their impacts.

It draws grand conclusions from fairly limited evidence, does little to actually unpack the intricacies of modern commodity markets and the impact of deregulation, overly reliant on a handful of sources, and contains some factual errors and oversights. (Japanese housing values actually work differently than in the US/Europe; China didn’t actually seize a Sri Lankan port—there wasn’t even ever a default, etc.) Far too much of the book is also a travelogue, with several chapters largely consisting of the author recounting his trip to a particular country. Or they were peppered with digressions unrelated to commodity trading recycled from other/better books.

There are better ways to spend your time/money.

[Hadrian · Rating 2 out of 5]

Tends to miss the forest for the trees. Russell rightly notes the importance of commodity prices in social and political crises, most notably the 2007-8 food crisis and the 2012-2013 Arab Spring. While the author only briefly notes the role of proximal causes for commodity crises - to give some examples - climate change, feckless or corrupt political institutions, export restrictions, blockades, etc., the author primarily goes after the price mechanism itself as a "weapon" (83) and assigns blame to a nebulous group of "speculators" (7, 35, 43, 49, 63, 230, etc.), and as a result he tends to understate factors that impact prices and cause economic or social turmoil.

In the last chapters, the author derides policy responses to inflation (232) which is itself indicated by changes in commodity prices. Inflation itself is "no longer a threat" (235).

[Nik · Rating 3 out of 5]

tl;dr: raises good points, don't always agree with the conclusions.

It starts a valuable discussion on how international financial markets affect prices around the world which can have real world catastrophic consequences for the most vulnerable. This will get worse with more systemic chaos from climate sources.

I would take only the major idea as a discussion point though as the book was light and selective on the academic proof behind some of the assumptions. The personal experiences (visits by the author to areas of crisis) give it a good narrative and illustrate the problems faced by many, I'm just not sure all the global conclusions that the author makes from these, can hold up.

I would still recommend to read the book, even if you just want to disagree with it.

[David Steele · Rating 5 out of 5]

I can’t remember the last time I highlighted so many passages, made so many notes, or went back to read so many facts again.
A fascinating look at the hidden forces of economics that are driving - and being driven by - feedback loops of our own making, why the price of commodities no longer has nothing to do with their availability, and how the green revolution could lead to the collapse of the whole house of cards.
The crash of 2008, Covid / furlough, Brexit, China’s belt & road, Putin’s disinformation strategy, little green men in Ukraine, the collapse of Venezuela, the ‘curse of resources’, it’s all in here, mapping the links between Jurassic Park, cargo cults and the boom and bust of bubbles. This book is bang up to date and provides a detailed glimpse behind the curtain.
If you liked Freakonomics: A Rogue Economist Explores the Hidden Side of Everything, you’ll love this.

[Nick · Rating 4 out of 5]

A polemic against finance capitalism. Often books like this can be loose with the facts and overstate some events, understate others if it suits their argument. I didn't have time, or the inclination, to fact-check the author's claims. But a lengthy Notes section at the end suggests that the book has been well-researched.

I also liked the section where the author takes us to dangerous hotspots like Iraq, Kenya and Ukraine's Donetsk region for a first-hand account of the direct and indirect effects of finance capitalism.

[Dalton Erickson · Rating 5 out of 5]

Price Wars is a great contemporary examination of the commodity markets and its real world effects on everyday people. Russell writes in an easy to understand and personified style that turns out of touch macroeconomics into reality. While it analyzes the market it does not prescribe a solution per se which lends itself to being a good recommendation to anyone.

[Lydia Fung · Rating 5 out of 5]

今年最值得推薦的書，作者是哈佛大學社會學博士，是一名作家兼導演。他為了解世界不同地方混亂的原因而親自去到那些危險的地區和國家如戰爭地區的伊拉克、烏克蘭、索馬利亞以及希臘難民營、經濟崩潰的委內瑞拉等等作實地考察，光是這點已令我十分佩服。他除了分享在這些地方聽到的故事和經歷，藉以讓我們得知世界上正有不少人深陷難以想像的痛苦生活，而這些慘況原來都能追溯到因為發達國家的投機者透過在金融市場對那些原材料價格和衍生性金融工具的不斷炒賣而賺取暴利，所以令到在世界另一端的落後國家因為原材料價格的暴升暴跌而引發革命、衝突、戰爭、經濟破產等等。
看畢這書我明白到這些瘋狂的金融基金期貨炒賣原來可以令真實世界中某些國家帶來災難性的影響，令世界各地數以百萬計的人民正因而活在水深火熱之中。「人們創造出不合理的價格系統，是為了合理賺取利益」，對於人類的自私，確實令我感到很震撼但又很無奈。

[Les · Rating 5 out of 5]

An absolutely fascinating look at how finance and economic thinking has diverged from the concept of a broadly functioning society. If you want to know how we got here and how the pandemic, the 2008 recession, climate change and many other real or potential catastrophic events are related, read this book.

[Patrick · Rating 3 out of 5]

This book is hard to review. It has some fabulous information about how the deregulation of the commodities market and ensuing profit-motivated market manipulation by financial actors in large countries, principally the US and UK, has destabilized entire countries and cause real suffering to millions of poor people whose lose access to food and shelter. The examples of people affected on the ground are relevant and frequently heart-wrenching.

But he also spends a long-winded prologue explaining how he came up with a thesis and went looking for evidence to prove it with the principal motivation to write a book. He doesn't provide counter-examples, but the publication in 2022 with a partial thesis that government spending does not stimulate inflation looks a little silly right now. The chapter on the conflict in Ukraine and its breakaway "republics" sponsored by Russia (observed and written well before the current war started) seemed like it would be relevant, but ended up explaining nothing. He toured a dangerous place and tried to make a few very tenuous connections to his argument. The author also repeats his ideas in a repetitive, formulaic way at the beginning and end of every chapter that talks down to the reader.

So I loved learning much of the information while being thrown off with some slanted or irritating choices of presentation. I was glad to discuss the scenarios with my high schooler who also read it.

[Jill Bossert · Rating 5 out of 5]

In clear, graceful prose, Russell explains how we got to this chaotic juncture in history. The book is accessible to anyone, especially to those of us who have been confused and upset by recent historical upheavals. “Chaos” is not random, but that at the heart of disruption is the price of global commodities. “Let them eat bread” is a trope that did not end with lopping off of a French Queen’s head, but continues to rock the world to this day. The narrative follows Russell’s journey into some hair-raising places - from Iraq to Ukraine to Somalia - and is written with the page-turning pace of a thriller. Deeply researched and compellingly argued, Price Wars helped me to understand the process that got us here.

[Luciano · Rating 2 out of 5]

I don't know whether the documentary or the book came first; in any case, the book is quite annoying - the tone of the pseudonaïve filmmaker unearthing "truths" about markets and evil speculators is always there, and Russell's standard of causality is feeble, to say the least. In a few pages it concludes that commodity trading liberalization is the root of all evil, and, voila, behind every economic disaster of the past few decades there is an amoral trading desk making money (they never lose) of the have-nots' disgraces. I can enjoy Adam Curtis' crazy interconnections; perhaps a book is not the best main for such style, but having started with it in this case, I have no wish to watch anything by Russell.

[Matt H · Rating 2 out of 5]

Interesting, and bettered my understanding of global speculation. But ultimately not that insightful, and awfully reductive. And unfortunately, the recent jump in inflation pokes some big holes in the last couple chapters.

[Bookoholiccafe · Rating 4 out of 5]

review to come

[Timothy Dymond · Rating 4 out of 5]

‘Hedge funds and al-Shabaab did not just share similar tactics, they were working together to create one of the worst human catastrophes of the century. The hedge funds were operating at a global scale by driving up the price of food everywhere.’

This quote from Rupert Russell’s ‘Price Wars: How Chaotic Markets Are Creating a Chaotic World’ is typical of his approach: tying together two features of the contemporary world that seem as distant from each other as possible (Hedge funds and al-Shabaab), through the mechanism of prices for a fundamental commodity - in this case food. Earlier in the book Russell appears to adopt a version of Hayek and Friedman’s view that prices are co-ordination mechanisms for ‘spontaneous order’ in the economy and society. However he concludes with the ‘discovery’ (this sort of book is always written with a tone of breathless revelation) that the promised spontaneous order is actually world threatening chaos. But ‘we’ in the West don’t necessarily experience this as chaos because it plays out in poorer, more vulnerable nations in the global south. Says Russell

‘The prospect of apocalypse hangs over Western popular culture as a question of when. But it should be a question of where.’

‘Where’ is often oil producing countries, which Russell argues ‘are twice as likely to have outbreaks of civil war’. He also draws on political scientist Cullen Hendrix’s research that as oil prices increase, oil exporters are more likely to engage in military adventurism. Russell focusses a great deal on the Russia-Ukraine conflict - presciently as it turns out, given ‘Price Wars’ was published just as Russia (further) invaded Ukraine. In Russia’s case it is not just oil, but also gas. Unlike oil (easily transportable over sea), most of the world’s gas is piped over land and lacks easy substitutes. ‘Petrostates’ (which can describe commodity exporting states generally) get both windfall dollars to spend on their military, and foreign-exchange reserves that insulate them from sanctions.

‘Chaos’ is not just a throwaway term for Russell. He spends a great deal of time (probably too much) explaining chaos theory and the ‘butterfly effect’ (small differences in an earlier state lead to big differences later) as a transmission mechanism for how prices lead to events such as wars. More usefully, he also explains how many of the prices that are paid for commodities and other items have become detached from mere ‘supply and demand’ of the type set out in economic textbooks. Since the 2000s, world food prices have largely been set by futures contracts and derivatives trading. While derivatives are meant to be a form of financial security for traders (to hedge a position against future adverse price changes), they have become a source of tremendous insecurity when it comes to prices paid by consumers when buying food to live. Russell makes a convincing case that events such as the Arab Spring were sparked essentially by food price rises, not actual food supply - which was continuing to increase at the time. The price of food increased because of derivatives trading - and as per the butterfly effect, superficially small changes led to big political and economic consequences. Russell emphasises the role of high frequency algorithmic trading, and has an amusing aside where he relates that, because of overly sensitive algorithms, any news concerning the actress Anne Hathaway can lead to the trading firm Berkshire Hathaway enjoying gains or suffering losses.

‘Price Wars’ is an attempt to combine a journalist’s account of the world’s trouble spots (with travels to Tunisia, Iraq, Venezuela, Ukraine, East Africa and Central America) with an overarching theory linking all these troubles together (the movement of commodity prices). As always with such books, it is vulnerable to the criticism of ‘reductionism’ (surely other factors are at play e.g. Putin’s longstanding ‘great power’ ambitions for Russia). It also has the ‘last chapter problem’ - in which any book diagnosing a major social and economic issue disappoints over what to actually do about it. Russell doesn’t propose doing away with the price mechanism, rather we should revive the approach that markets should be closely regulated. This would certainly make life better in some places in the world, but it is hard to see how it could address the massive scale of problems that he sets out in the rest of the book.

[Ajay · Rating 5 out of 5]

The single best book that I've read so far this year.

At first glance, Russell perfectly represents modern American liberals' both in popular misunderstandings of the world and general naiveté. And his grand theory to explain the chaos of the 2010s felt overreaching and reductive in it's attempt to pin blame so heavily upon commodity price speculators.

However, along our journey with him (on a worldwide investigation that travels across to Tunisia, Iraq, Venezuela, Ukraine, East Africa, and Central America ), we upend these myths and see reality with a clarity that is often missing in American discourse. I found myself increasingly seeing the truth in his narrative - unrest in these places was triggered by dramatic swings in the price of essential commodities, and other explanations miss the mark. Russell's ability to bring the reader along the journey of intellectual change makes this an insightful must read - generalizations & naiveté are tools to help readers find familiar starting foundations before their worldviews are changed.

I think his deep dive into Venezuela is one of his best works - because it cuts through politicized myths on both sides to get to essential truths.

I'd highly recommend this book to anyone interested in current events, politics, economics, or otherwise trying to make sense and improve the world around them. Heartfelt & deeply underrated.

[Nat · Rating 4 out of 5]

Not quite a 4 star, more of a 3.5 star for me. The author is a non believer in inflation or at least does attempt to address the topic when discussing fed actions. Rather, Russell takes it as a given that inflation hasn’t been an issue for the past couple of decades and thus is a non issue going forward. While not a key point of discussion in the book, I conjecture Russel is a Believer in MMT.

Going back to the rest of the book, some topics are interesting. You can definitely tell this is written by a story teller who is more journalist than an pure academic. Not a fault though but readers should appreciate that you will get a easy to understand version of the story than the academic discussion. I’d say this is a plus for the general public. Finding cause/effect in some of the phenomenon is indeed difficult when there are easily talked about rhetorics and stories. The illegal immigration from Columbia to the U.S. driven by coffee commodity pricing and climate change is an interesting example. And overarching theme of two forces affecting commodity pricing (financial market versus supply/demand) and the subsequent effects on geopolitics is one key concept the general public ought to know.

Overall, worth a read before you dive further into the realm of global finances and the implication on geopolitics. But if you are expecting deep understanding of key mechanisms, this book might leave you wanting for more.

[Daniel · Rating 5 out of 5]

Prices are supposed to tell us where supply and demand meet. However with financialisation, they just become betting casinos. Financiers bet on the futures by buying and shorting.

1. The fundamentals matter much less, knowing what others think the price will go matters more, especially with algorithmic trading. That’s why milliseconds matter. This causes prices to swing like supercharged madness of crowds. Until the bubble bursts.

2. The fluctuation in prices destroys livelihoods. So farmers in Central America lose their livelihoods and migrate to America illegally.

3. When prices of oil is high, oil producers flex their military muscles.

4. Almost all major shocks do not cause a real problem. Oil wells are never destroyed by armies because that’s the cash cow. Russian natural gas sanction did not cause a severe European winter because alternatives arrive.

5. Central banks’ mandates are price stability. They were always talking about bond vigilantes and how austerity was necessary for developing countries whenever they suffered a financial crisis. Enormous financial pain was inflicted on normal people. However, when it was the financiers who were suffering from a financial crisis, central bankers just printed money to rescue them. So the rules are different for financiers. They could take no pain!


A very solid book!

[Tony Dúbravec · Rating 4 out of 5]

Bol som pripravený dať 5*. Väčšinou si vždy ale pozriem najskôr niekoľko ďalších recenzií. Nezmenia síce radikálne môj názor, ale občas prinesú nový pohľad na knihu a informácie v nej. Niečo ako zrýchlený mini knižný klub, kde si podebatujete o knihe. Nakoniec dávam férové štyri hviezdičky.

Česká obálka od Audiolibrix vyvoláva úplne iné očakávania, než agresívnejší originál, takže som bol od začiatku veľmi milo prekvapený celým konceptom, v ktorom autor vysvetľuje efekt motýlich krídel a aký môže mať dopad na globálne dianie. Machinácie na komoditných trhoch v Amerike alebo Británii, ktoré sa zdajú ako neviditeľné, dokážu spôsobiť obrovské krízy, hladomor, nepokoje, migračné vlny.

Autor sa vydal na rôzne krízove miesta plné vojnových nepokojov, do utečeneckých táborov, na stredoamerické hranice, takže kniha má trošku aj cestopisný charakter.

V čom musím dať za pravdu iným, kritickejším recenzentom, je to, že autor v knihe bez nejakej extrémnej potreby niečo dokazovať, vyskladal v podstate konšpiračnú teóriu o tom, ako bankári a obchodníci vedome destabilizujú svet. A vám, ako nezaujatému čitateľovi, to prirodzene celkom dáva zmysel.

Takže knihu síce s čistým svedomím odporúčam, ale pripomínam, že čítajte/počúvajte so zapojením kritického myslenia.

[Karen M Spence · Rating 4 out of 5]

This book was….weird? On one hand he makes several points that are correct: deregulation (and impotent macro fiscal institutions) is a recipe for chaos, price and supply decoupling can lead to an increase in prices and thus food insecurity, uprisings are a response to the inability for a population to obtain basic needs.

On the other hand, he travels to nations in distress like a sort of poverty bon vivant, interacts with locals in a way that doesn’t necessarily prove his point and essentially says: “See these people? Dirt poor. Why? Commodities traders in the USA and UK.” A lot of attention is given to the Butterfly Effect and I think this was the point of his multiple excursions, adding in the human element. I guess? It does make for a unique concept.

At times the book had a conspiratorial and breathless tone. It had a bit of an unhinged “Deep State” Republican vibe to it, but for educated people with an IQ over 80. Instead of blaming the game, he directly blames the traders, specifically traders in the USA or UK.

I liked how he explained how commodity prices are affected by completely different commodities prices. He didn’t use the technical vocabulary but in fairness this book wasn’t written for financial engineers.

At the heart of it, financial systems run on similar algorithms as predator-prey ecosystems and the places/situations he travels to and describes reflect that. He didn't put it that way but that is the reality of it.

In the end, he doesn’t really offer any solutions but I can appreciate the effort in reducing a very complex subject into something a bit more understandable.

[Natasha Cabiltes · Rating 3 out of 5]

Given current events and the field I am in, I wanted to learn more about the nature surrounding price shocks and how these economic movements are caused by unfolding political or historical events. The book started out strong, as the author was able to introduce us to the history of commodity markets and provide solid arguments on how novel financial instruments were able to artificially induce the greatest financial busts we have ever seen. The author attempted to further explain how different political events in the Middle East (where most of the commodities are found) caused these volatile price movements. However, instead of being able to give us a clearer depiction of how this affects the commodity markets, it came off as a narration of his on-the-ground experience rather than directly answering the rationale of this book and providing counterarguments and evidence to support his broad speculations of the market. Overall, an underwhelming read.

[Julia Schowalter · Rating 4 out of 5]

“A war against this kind of corruption is as pointless as the war on drugs: remove Maduro or Saddam and you simply replace them with another petro-politician who will be facing the same incentive, the same temptations, the same threats from foreign powers. The curse makes chaos, and this chaos is built out of numbers, out of weapons and out of lives,” (Russell 152).

More of a sociological exploration of the commodities market and the effects of financial instability than a discussion of the commodities market itself. Russell’s portrayal of macroeconomic factors seemed a bit simplistic and I would have appreciated more description of how his all-powerful speculators exercise their power. That said, the book was quite well-written and did a great job pinpointing in lay terms how economic incentives fuel conflict. Certainly worth a read, but not a book for those looking to learn about the commodities market.

[Jamie Pastore · Rating 2 out of 5]

A young reporter’s heartfelt attempt at chronicling the geopolitical and economic chaos around him without any solid foundations. The author clearly cares for the people that he meets and wants to understand what lead to the upheaval they are going through, but his lack of basic understanding of economics, finance, and domestic political drivers results in a jumbled mess. The extraneous information is more cohesively laid out in other material that doesn’t lend itself to the gonzo-style regurgitation to which the book often veers. That high commodity prices cause chaos in countries dependent on commodity imports is known to even cursory readers and the lack of discussion of balance of payments or internal political power struggles make this book a rambling diatribe masquerading as a homemade gumbo. Skip it.

[Adam Sturgeon · Rating 1 out of 5]

The author believes he has had some sort of revolutionary brainwave. He hasn't. There's nothing new presented, only very tedious links on a macro level. There's also a lack of self-awareness at times, to the point I strongly believe the general thesis and conclusion were preordained. The poor evidential basis is also not helped by poor writing and presentation of his theory, there was often large logical leaps and I wasn't taken on a journey- something he acknowledges is important in this sphere but apparently has no interest on deploying himself.

As bad as the financial analysis was, the upside and strong point of the book the "disaster zone" journalism. I felt this was a compelling insight into each area he visited and were more worthy of 300 pages. Given the authors background as a PhD in sociology, none of this is surprising.

[Chris Aylott · Rating 4 out of 5]

A depressingly well-argued book that has been all but confirmed by the events of the last few months. Russell draws links between the price of bread and the destabilization of civil societies as well as the price of oil and the aggression of petro-states. That's bad enough, but the killer argument comes from his exploration of how financialization of commodities has driven ever greater price swings as speculators follow and profit from (often spurious) trends.

All of which boils to "humanity is its own worst enemy." The rot is at the very heart of the capitalistic rent-seeking investment system, and all the economic incentives are lined up in favor of things getting a lot worse.

[Gianluca · Rating 5 out of 5]

Incredibly insightful and provocative analysis on the key role that prices play in all the socio-economic dynamics that lead to conflicts, injustices and inequalities.

Just a short excerpt from the chapter dedicated to climate change:

“The housing crisis is not caused by a lack of an absolute resource. […] Problem is that homeless people - and many others - simply cannot afford it. If we wanted to put homeless people in the empty homes we could, but as a society we have chosen not to. We allocate homes using “the price system”. The housing crisis doesn’t come from an absolute “lack” of physical structures but from the rules of a social game. The same is true for food and famines.”