Haven't read the book, but I came across this article about it. I admire the author's honest conclusions, especially her statement that we live in the most exciting time in history. Surely it is turning into one of the most difficult times. Though this article doesn't highlight it, the author seems to have a grasp of the fact that problems are also opportunities.
Economic rogues run amok in the world
democracy spread through the world in the 1990s, it was accompanied by
a dramatic increase in slavery, according to the author of a new book.
“The correlation between democracy and slavery is one of the
consequences of rogue economics, a recurrent phenomenon in history,
often linked to rapid and unexpected great transformations,” Loretta
Napoleoni writes in Rogue Economics: Capitalism’s New Reality (Seven Stories Press, $27.50). “In the midst of profound changes,
politics can lose control of economics, which becomes a rogue force in
the hands of new entrepreneurs.”
In an April 8 interview in
Vancouver, Napoleoni told the Georgia Straight that she thinks other
analysts of world economic trends, such as the irredeemably optimistic
Thomas Friedman of the New York Times and Columbia University’s more
cautionary professor Joseph Stiglitz, wrote books about globalization
before it was clear what was taking place. “You can’t analyze such an
amazing change at the beginning,” Napoleoni said. “You have to sit
there and watch how things are changing. We are living in perhaps the
most exciting time in history because everything is changing.”
book explains how the transition from communism to globalization in the
1990s unleashed a brutal and corrupt form of capitalism that cannot be
tamed by national governments. Rogue Economics shows how Russian
oligarchs stripped the country of its resources, depositing their
profits in safe banking havens. Entrepreneurs in China and other
countries unleashed counterfeit medicines on the world, causing untold
harm to human health. The Bulgarian Mafia recruited former athletes to
act as enforcers, and sex slaves were exported from Eastern Europe.
Criminal gangs control urban areas in Africa and the South American
“The epicentre of the economic and financial
world is moving eastward, which means the political epicentre will move
eastward as well,” she said.
Napoleoni, an economist and
former banker, suggested that the current U.S. subprime-mortgage market
problems are another manifestation of rogue economics. She said that
new opportunities arose through the use of derivatives, which are
complex financial products that can be used as a hedge against risk.
Investment bankers used derivatives to convert bad real-estate loans
into products that could be sold to unsuspecting investors. When the
borrowers—U.S. homeowners who probably shouldn’t have been in the
market in the first place—couldn’t repay those mortgages, it triggered
a financial crisis, battering the U.S. dollar.
could not predict this outcome,” Napoleoni said. “You may say that’s
immoral for a bank to do that, but it’s not illegal.”
emphasized that rogue economics flourishes in countries like China,
where citizens don’t have the political power to rein in the behaviour
of outlaw entrepreneurs. In the meantime, she predicted that the U.S.
dollar will continue falling against other currencies because the
country is less competitive in a world in which rogue economics
thrives. Western corporations create goods in places like China. Those
goods are often counterfeited, and she suggests in her book that this
will harm the corporations’ futures.
Napoleoni said that
the U.S. economy is currently experiencing “stagflation”, a combination
of rising prices and no economic growth. “I think unemployment is going
to skyrocket,” she said. “I think there is going to be
also expects Chinese entrepreneurs to work more closely with the Muslim
world, which is already occurring in Sudan. In the end, she anticipates
that a new Islamic monetary system will emerge and that the dinar,
pegged to the price of gold, will become the reserve currency of the