Weekly Selection 2 August 2019

Adam Tooze, Why Central Banks Need to Step Up on Global Warming

(Foreign Policy, July 20)

The leading economic historian explains why climate change could cause another global crash. Three types of risks could strike the financial system (losses in the insurance system, climate change liability, and the problem of stranded assets) and the argument runs like this: roughly 1/3 of equity and fixed income assets issued in global financial markets belong to the natural resource and extraction sectors, as well as carbon-intensive power utilities, chemicals, construction, and industrial goods firms. A climate emergency could create a situation in which they face the possibility of a sudden regulatory shock that would then inflict major losses (reads in 15 min+).

Chandran Nair, China’s Rise Is Not a Gift of the West

(Berggruen Institute, July 31, 2019)

The founder and CEO of the Global Institute for Tomorrow explains why the position of those who argue that it was a mistake to allow China to rise at all is a step too far. In his view, this argument from many China watchers has a colonial stench to it. This is an important article to understand that behind the trade war and the economic and geopolitical rhetoric, there is a deep cultural misalignment (reads in 6-7 min).

John Lanchester, The Invention of Money

(The New Yorker, August 5, 2019)

This is a great article to understand how, in three centuries, the heresies of two bankers became the basis of our modern economy. It explains in particular how people become willing to adopt new forms of money. At a time of Libra and crypto-currencies, this is a must read! (10 min+).

Eduardo Gomez, Let Them Eat Junk

(Foreign Affairs, July 31, 2019)

Since the late 1990s, junk food sales have precipitously declined in the US and Europe, but they’ve burgeoned in emerging markets where soda and snack food companies have now turned their attention, doing everything they can to keep their new markets pliable. In particular, they are building political and social alliances that can help them deflect political opposition, duck public scrutiny, and avoid stiff regulations on the sale of their products (reads in 7-8 min).

Steven Petrow, Change Your Perspective to Change Your Life

(The New York Times, July 31, 2019)

Changing our perspective to change our life is a metaphor that helps us deal with the dramatic events that turn our life upside down (whether it’s a cancer diagnosis, a divorce, or getting fired). This article focuses on the Visible Ink program at Memorial Sloan Kettering Cancer Center that gives patients and caregivers a way to explore life after cancer through writing (reads in 6-7 min).