The World For Sale book review

Recently, I heard a podcast on Planet Money about commodity traders and their role in world economics. The podcast interviewed the authors of “The World for Sale: Money, Power, and the traders who barter the earth’s resources.” It was an eye-opener for me, so I decided to read the book.

 The commodity trading business has historically been driven by just a few major players, with deals done in person and traders jetting all over the globe. Marc Rich was the only name familiar to me. Rich was one of the pioneers of commodity trading. Major commodity trading houses include familiar names like Cargill, Archer-Daniels-Midland and Bunge. When China opened up after Mao’s death, commodity traders were there to exploit the new markets for energy (coal, gas, oil), metals (zinc, copper, aluminum, cobalt) and food (grain, rice, sugar). When the Soviet Union collapsed, commodity traders partnered with oligarchs to sell Russian oil and gas to the west, paving Putin’s path to power.

“For many years, the traders had lived by Marc Rich’s maxim of walking on the edge of the knife—going as close as possible to the line of what was legal, using every loophole they could find. If they didn’t break the letter of the law, they made a mockery of its spirit. Vitol, for example, used its subsidiary in Bahrain to skirt European sanction on Iran in 2012.

“It was a similar story regarding corruption. Cultivating cosy relationships with powerful officials had long been at the heart of the business of commodity trading, and in many countries in Africa, the former Soviet Union and the Middle East, that meant finding ways to pay them off.”

This book makes clear how these often opaque, privately held companies made millions, and later billions, by taking on risky contracts with often unsavory governments, sometimes in the midst of war. They facilitated a secret Iran-Israel oil pipeline to get around trade sanctions after the Ayatollah took power, later also used to move oil past sanctions against Iraq. They made trade deals with Cuba and with various unsavory and despotic African regimes. Since most of the companies were privately held, there were no shareholders to answer to and the accountability and reporting required of publicly traded companies didn’t apply. 

“In some cases, such as the war in Libya, when Vitol shipped more than $1 billion of fuel to the rebels, they were clearly pulling in the same direction as the foreign ministries of their home governments. In some cases, such as in Kazakhstan, Western governments were more or less indifferent to their activities.

“But in other cases their deals went squarely in the face of Western policy. The traders’ money helped spur a Kurdish independence referendum in the face of strong opposition from the US, which argued it could jeopardise the fight against ISIS. In Chad, Glencore’s money helped bankroll Idriss Deby’s government even as Western-led institutions, such as the World Bank and IMF, were trying to impose strict conditions on him. In Russia, the traders’ cash very directly flew in the face of Western policy, by helping Rosneft and Putin weather the impact of US and EU sanctions against them.”

For the most part, the book paints the commodity traders as amoral and apolitical. For them, everything was about money. Bribes were not only commonplace, in Switzerland they were tax-deductible as business expenses. I found myself wincing at how much fossil fuel consumption, and thus how much global warming, was enabled by commodity trading that might have been slowed if more conventional trade mechanisms were used. 

If you want to know how the world of international commerce actually works and has worked for the better part of the past century, this is a good tutorial. The writing is peppy, and even when it gets a bit in the weeds on some transactions, the narrative is brisk and chock-a-block with fascinating characters and engaging anecdotes. I’m glad I read this book and I recommend it.