Climateer Investing: Review: Blas & Farchy's "The World for Sale: Money, Power and the Traders Who Barter the Earth’s Resources"

Monday, May 30, 2022

Review: Blas & Farchy's "The World for Sale: Money, Power and the Traders Who Barter the Earth’s Resources"

I'm guessing that our readers have indeed heard of these companies and could list them in revenue order, but this is still a nice little overview of the book.

From The National Interest, April 24:

Who Really Owns the World? Meet the Merchants of Power You’ve Never Heard Of

Javier Blas and Jack Farchy’s The World for Sale: Money, Power and the Traders Who Barter the Earth’s Resources offers a probing look at one of the most overlooked sectors in modern global markets and geopolitics.

Javier Blas and Jack Farchy, The World for Sale: Money, Power and the Traders Who Barter the Earth’s Resources (Oxford: Oxford University Press). 416 pp., $29.95.

WHEN I was an undergraduate studying at Georgetown University, I used to listen to Al Jazeera English’s (AJE) coverage of global events—the Arab Spring was still in full swing at the time, and AJE’s reporting was second to none. On a May afternoon in 2011, one particular segment on Kamahl Santamaria’s show, Counting the Cost, stood out. Kamahl introduced a company that I had never heard of before: Glencore.

The company is a commodity trader—a business that focuses on the buying and selling of physical commodities, like grain, oil, copper, and so on. Most would dismiss this as relatively inconsequential; buying and selling commodities is one of the oldest kinds of trade in the world. What made Glencore stand out, Kamahl emphasized, was that “when one company has this much influence, through its size, and some say even its practices, then there is a concern.” He laid out the numbers: at the time, Glencore controlled 3 percent of the world’s oil market, 50 percent of the global copper market, 60 percent of zinc, and 9 percent of the world’s grain. “Think about the effect that would have on food prices,” Kamahl cautions, “the absolute basics for so many people around the world.” If controlling the food supply of entire nations isn’t a significant form of power, then what is?

Glencore, and other commodity traders like it, are the focus of The World for Sale: Money, Power and the Traders Who Barter the Earth’s Resources, a recent and rather instructional book by journalists Javier Blas and Jack Farchy. Blas and Farchy’s thesis is straightforward: far from being ordinary merchants, commodity traders are key players in the contemporary international economy—actors whose “control over the flow of the world’s strategic resources has also made them powerful political actors.” Yet despite wielding this immense wealth, influence, and structural power, this industry remains a relatively unknown force to most people—even fewer know its history, evolution, adaption to changing markets and technology, and modus operandi.

Drawing on over a hundred interviews with current and retired commodity traders, Blas and Farchy deliver an informed and eye-opening dive into the field of commodity trading—a world of swashbuckling merchant-adventurers, African dictators, Swiss bankers, and the suave yet ruthless empire-builders who may yet hold the future of global geopolitics in their hands.

THE WORLD for Sale opens up at the twilight of the Second World War, when an age of peace, combined with ruined cities and nations needing rebuilding, opened the door to a hitherto unprecedented bonanza for raw materials. The reader is introduced to the pioneers of the modern commodity trading business: the Hamburg-born Theodor Weisser, who crossed the Soviet border (despite having been a former Soviet war prisoner) seeking a deal to export Communist diesel and oil to the West; American John H. MacMillan, who went from learning the family grain business (Cargill) on the floor of the Minneapolis Chamber of Commerce to unleashing America’s grain upon the world, including to the Communist Bloc; and Ludwig Jesselson, who fled to America from Nazi Germany’s genocidal campaign against Jews and went from trading scrap in New York to being the veritable founding father of a dynasty of commodity trading companies—including Glencore—that exists to this day. These three men created the business model and professional culture that has guided the commodity traders over the past eighty-plus years.

The reader is taken on a whirlwind tour of significant events in the industry. For instance, the Great Grain Robbery—probably the first time that both governments and the public at large were exposed to the importance of the commodity trading business—is retold in delicious detail. Suffering from crop shortfalls in 1971–2, the USSR dispatched Nikolai Belousov—the head of the Soviet grain trading agency—to the West with a single mission: secure a food supply. Belousov met with John MacMillan’s successor at Cargill and negotiated an agreement to buy 2 million tons of grain over the next year. Blas and Farchy succinctly summarize the mood: “It seemed, at the time, like a good deal all round.”....

....MUCH MORE

For more on the Great Grain Robbery we have last November's "That Time The CIA Completely Missed A Soviet Crop Failure And Allowed The Sovs To Buy American Wheat On The Cheap." Which was referenced in March's "Did The CIA Foresee The Effect On Wheat Markets Of The Russia Invasion And The Effect Of Sanctions?."

And traders in general

I'm still trying to figure out why the ICE didn't get sued for bailing out Al Gore, Goldman Sachs and President Obama's pal Richard Sandor by way of their $604 million purchase of Climate Exchange, PLC..

Looking at the Sotheby's New York sales, mentioned a week ago, I actually thought, for a split-second, that this painting had something to do with Goldman Sachs:

Instead it is Lot 23, Picasso's Femme nue couchée, which was hammered down for 67,541,000 USD