How America Weaponized the World Economy
* Book: Underground Empire: How America Weaponized the World Economy. Henry Farrell and Abraham Newman, Allen Lane, 2023
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Review
Neil Sharing:
"The story of how the US came to dominate the financial and technological networks that connect the world – and how they are now being weaponized – is told in an important new book by Henry Farrell and Abraham Newman, two US academics. There are several reasons to read their book: it is accessible, it is engaging and it is refreshingly concise. But most of all, they get to the heart of how power really works in a globalized economy.
The core of Farell and Newman’s argument is that US influence stems from its control over the plumbing for the global economy, the ‘underground empire’ of the book’s title. This is part financial and part technological. Almost 90 per cent of transactions in the foreign exchange market take place in dollars. At the same time, American tech supremacy means that communication flows between countries tend to be routed through infrastructure that sits on US soil.
Farrell and Newman argue, correctly in my view, that America did not intentionally seek to create a global system that it could control. Rather, it just happened that the US was the world’s dominant economy in the 1990s and 2000s when globalization and technology combined to fuel an explosion in cross-border flows of trade, capital and information. Nonetheless, it is a position that is being increasingly exploited by policymakers in Washington."