The Spider’s Web- a documentary

“The Spider’s Web: Britain’s Second Empire” is a documentary produced for 4,000 pounds, which traces how the City of London manages tens of trillions of dollars. The City of London itself is a bizarre structure, separate from the London with which we are all familiar. This strange subset of the city has its own governmental structure, which is largely dominated by financial interests. This well-researched and engrossing documentary explains how -after Britain’s empire collapsed in the 1960s- financial corporations based in the City of London created a series of secrecy areas or tax havens in U.K. territories from the Cayman Islands to Jersey. The result was a neo-colonial system, in which vast sums of money flowed by illicit means to the City. …

The Great Recession

New York Magazine has an outstanding article, “Ten Years after the Crash, we are still reliving in the world it brutally remade.” The article consists of a series of brief statements by economists, activists and academics, which underlines the centrality of this event to our modern social, political and economic systems. If you want to understand the rise of populism, the fall of fertility in the developed world, or why the pension crisis is so severe, this piece provides a succinct and easy to understand analysis. As I write these words, the Turkish lira is falling in a manner that reminds many economists of the Asian Financial Crisis, and housing prices in the United States have risen to dramatic highs in West Coast markets. Many market watchers are nervous. …

Global Debt

The website Visual Capitalist has a chart that shows how much of the world’s debt is owned by individual countries. The image is a giant circle. What immediately strikes one when looking at it is that half of the worlds debt is held by only two nations, the United States (31.8%) and Japan (18.8%). Some nations on the list are surprising. Is it really possible that Italy’s debt (3.9%) is roughly twice that of Spain’s?

The debts are color-coded, so that the nations with the highest debt to GDP ratios are in yellow. With this approach Japan is the clear standout, a giant block of yellow on a mostly mauve chart, with the lone exception of Greece. According to this chart, Japan’s debt to GDP ratio is currently 239.3%, the highest of any major nation. On the opposite end of the spectrum, Russia is only responsible for .3% of the world’s debt, which places it in a similar category as oil powers such as Saudi Arabia, the UAE and Nigeria. One often hears that Russia is suffering because of low oil prices. It’s also important to have the context that Russia has the lowest debt of any major power. Of course, with $20 trillion dollars in debt, the U.S. is by far the largest global debtor. …

Innovation and hope in Europe

Europe is currently facing myriad challenges, including a wave of migration from the Middle East and Europe, bank debt in Italy, the enduring financial problems of Greece, as well as Brexit. Still, at the heart of many of these challenges has been the deep economic inequalities between Europe’s north and south. A better understanding of these differences can be gained from these maps of “Innovation in Europe” in the Washington Post. What I like is that these maps not only break down innovation to the regional level, to show that the differences within countries are as profound as those between them, but also that it shows how the level of innovation has changed (and declined) in the recent past.
Shawn Smallman, 2017

Maps of U.S. Trade

I recently came across this great blog post by Yuka Kato, which has beautiful maps illustrating U.S. trade with different regions of the world. This would be a great tool in classes that address international political economy, including an Introduction to International and Global Studies class. You can also find other great maps for an introductory classroom on the blog.

Shawn Smallman, 2016

The Lights in the Tunnel

Ford’s book, The Lights in the Tunnel, is a bleak look at the future of global economies given an accelerating pace of automation. The book’s key idea is both clear and frightening: “The central thesis of this book is that, as technology accelerates, machine automation may ultimately penetrate the economy to the extent that wages no longer provide the bulk of consumers with adequate discretionary income and confidence in the future” (237). As a result, Ford suggests, governments will have to plan for radical rethink of the free market. …

Humans need not apply: the Robot revolution

This quarter I am teaching an online class on Digital Globalization, and this week we are talking about the economy: Uber, AirBnB, 3-D printers, etc. The discussion has focused a great deal on how the sharing economy has impacted students’ communities, particularly AirBnB’s impact on housing. In general, most students are optimistic about the future of the sharing economy, and don’t want government to heavily regulate emerging technologies. Still, the students do have some particular concerns. One student recommended a video called Humans need not apply, which talks about how robots are impacting the labor market. This 15 minute video concisely and thoughtfully details the danger robotics and technology pose for white collar employment. As the video points out, even the Stock Market is now heavily run by “bots.” The action of the market is now largely out of direct human control. Now other markets -in particular the legal industry- are changing, as discovery and other tasks are being automated. Could bots eventually take over the role of doctors for diagnosis or drug prescription? My favorite point in the video (spoiler alert) is when the speaker points out that the background music for the video was created by a robot. Overall, the video is deeply pessimistic, as its key argument is that new jobs will not replace those that are lost. My question is, if this trend is truly happening, why is unemployment in the United States currently around 5%? Shouldn’t we already see some signs of this happening? One of the commentators of the video was struck by how thoughtful the comments were, and asked if this could possibly be Youtube? I think that this comment speaks to the video’s strengths.

Another student in the class pointed to an article in the Atlantic titled “A world without work.” It’s also worth your time, to think about the long term trends that may be at least as important as recent news about the Chinese stock market.

Shawn Smallman, 2016

The Greatest Fraud Ever? Artur Virgilio Alves dos Reis and the Portuguese Bank Note Affair

"Grunge Flag Of Portugal" by domdeen, courtesy of
“Grunge Flag Of Portugal” by domdeen, courtesy of

In the aftermath of scandals involving Enron, Bernie Madoff and Countrywide Financial, the current period might seem to be uniquely plagued by financial wrong doing. But in sheer scale, it would be difficult to exceed the audacity of Artur Virgilio Alves dos Reis (1898-1955). After dropping out of an engineering program, he traveled to Angola, and used a fake diploma from Oxford to find work. After returning to Portugal, he was soon imprisoned for check fraud, which gave him the time to plan a larger crime. After his release from prison, his background did not stop him from engineering a financial fraud that was so ambitious that it contributed to the collapse of the Portuguese Republic in 1926, which led to the fascist regime of Salazar. In an age in which people doubt if the financial system is adequately regulated, Alves dos Reis perhaps represents a worse-case example. …

Nicaragua Dreams of a New Canal

Photo of the Panama Canal at Night by David Castillo
Photo of the Panama Canal at Night by David Castillo

In an earlier post, I talked about the United States’ declining influence in the Americas. I think that nothing may symbolize this as much as Nicaragua’s vote this week to grant a Chinese company a 50 year concession to build a canal across this country. The idea of a canal across Nicaragua dates back at least to the early nineteenth century. As David McCullough described in his magnificent book, The Path Between the Seas, Nicaragua was favored because it was closer to the United States, and Lake Nicaragua seemed to make the task of building the canal easier. After the Civil War, U.S. President Grant sent five expeditions to Central America to explore a route for a canal, most of which went do Nicaragua. But since it was the French who began the project -reflecting Europe’s influence in the hemisphere- proximity to the U.S. did not shape their choice, and they began work on the Panamanian isthmus. Although the project was headed by the French hero de Lesseps, the man who had built the Suez canal, his decision to build a sea level canal likely doomed the project from the start.   …

European Migration to Africa

Photo of Giraffe courtesy of Satit Srihin at
Photo of Giraffe courtesy of Satit Srihin at

It’s been hard to watch the financial crisis unfold in Europe, and to hear about how unemployment is affecting younger people though-out the continent. One of the powerful trends that has emerged from the crisis has been an unexpected form of migration, in which Europeans are traveling to developing countries for employment. One of the strongest examples of this has been in Portugal, which has deep historical ties to Africa and Brazil. The Angolan government has been welcoming skilled, young Portuguese immigrants with open arms. But other countries, such as Mozambique, are also seeing large numbers of Portuguese immigrants. As this video report from Al Jazeera makes clear, this is a powerful trend in Europe today. With the bad news out of Portugal this week, as the government scrambles to find new cuts, this trend will probably continue for the near future.

Shawn Smallman, Portland State University

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