Nilesh Jasani's Reviews > The World for Sale: Money, Power and the Traders Who Barter the Earth’s Resources

The highly informative book on an essential and less-addressed market/economic sector has everything right except the tone.

The stories that start from a small group of traders in the seventies and lead to the activities of the current giants are disjointed and yet compelling. Most of them are not well known, like the stories of famous bond or equity investors. The authors are right to claim that these working-in0the-shadows individuals and firms have had a larger impact on global affairs than their celebrated public market contemporaries who dominate the financial journals.

The authors do a good job throwing light on the many murky activities of these entities as they amassed staggering wealth. The authors rightfully claim that commodity traders alter the course of the lives of many millions globally and the political and geopolitical history of many nations.

Nevertheless, the book lacks balance. Perhaps, it is enormously difficult to provide balance while discussing this field of goods essential to human lives and with actors and practices that have been downright abominable from the time immemorial.

Let's start with a few undisputed facts. We all need resources - from food to energy to metals and others - to lead a decent life. What we need is not evenly distributed around the planet. Monopolists of all types have tried to corner the production of these resources from the era of the feudal lords to the miners and energy barons using unsavory means. It was easy for all these producers to recognize the power of the larger size (or the ownership of a higher amount of whatever resource they were in) in their quests to control the market. This led to power grabs, corruption, and exploitative production practices of all kinds by the most powerful producers, with some joining politics and others moving into commodities after they got their political powers.

Our history and literary books are filled with the events caused by commodity-control methods even to this present day. We all wish we could banish all these producers out of regular modern circles and still continue with a good economic life. The utopian fantasy - reflected in the book - is that politicians from a group of large, rich, democratic nations would come together to clean up the commodity production space. In this dream world, all the much-needed resources are within democracies, produced in the most sustainable and moderately profitable ways without any exploitative labor practices and ideally without monopolies.

It is important to keep striving for such a world, but it is equally important to understand that we are not in such a utopia. Some idealists' overzealous bans, sanctions, or price/trade controls could inflict more miseries on the consumers and users. Practically, intermediaries - like those discussed in the book - will provide those layers between producers that nobody wants to be seen dealing with and the users who need resources for their daily life.

Ever since the advent of modern trading intermediaries and financialization started by them, the world has seen fewer shortages of commodities than ever before. Debatably, prices have also been less volatile, with global consumers allowed to have a higher proportion of income left for non-commodity expenses. The trading companies have somewhat counterbalanced producer monopolies across commodities. As high as their absolute gains look, as reported in the book, we need more studies to show whether intermediary profit margins are up or down on a long trend and whether consumer surplus is growing or shrinking versus the producers because of these trading companies' activities.

One should not condone many acts of the trading companies. Those who violate laws should pay for their acts. The book is right about these. It is not right - at least in its tone - where it fails to discuss the important, practical role played by these intermediaries in our world. Commodity companies will continue to exist in the coming decades. They may have different names, with most players going through the inevitable personal boom-bust cycles despite the aggregate profits on an uptrend. In a world geopolitically divided, their roles will become even more critical to provide the veneer of political acceptance to sanction- and countersanctions imposing classes. They will also come under far more scrutiny because of political divisions, ESG/climate reasons, and the return of the resource price inflation.