Atlas of Finance: Mapping the Global Story of Money by Dariusz Wojcik and co-authors is a visual exploration of global finance, blending history, geography, economics and politics across a diverse selection vignettes. Despite noting some political biases, James Herndon finds that its extensive research and innovative visualisation techniques make it a valuable resource for students, educators and seasoned scholars alike.
As the world’s supply of data continues to increase exponentially, demand for its visualisation likewise grows apace. Sites like Visual Capitalist, Our World in Data, and The Atlas of Economic Complexity all compete by offering novel interpretations of business and economic statistics. To that end, the European Research Council funded a team of researchers led by the economic geographer Dariusz Wójcik to research “Cities in Global Financial Networks.” This group has produced a torrent of peer-reviewed publications, along with a new work accessible to the general reader, Atlas of Finance.
While Wójcik and his team write at a level accessible to any fresher, almost every page offers some novel fact likely unknown to the erudite
This coffee table book surveys commerce, economics, and politics across eighty vignettes, each with a striking illustration and a brief introduction to its subject. And those pages cover, well, nearly everything: from Sumerian cuneiform to SPACs, from Potosi to Premier League, from cowry shells to cryptocurrency. While the book emphasises the UK in general and London in particular, it ranges as far afield as Cape Town and Vancouver. The timeline stretches from Bronze Age Mesopotamia to the present with subjects just as diverse: from the beneficent legacy of the common law, to pollution in the Baltic, to venture capital-funded satellites. It runs the gamut of financial acronyms, touching on M&As, the LME, MFIs and a dozen more, besides.
Educators tasked with imparting the grammar of graphics could build a syllabus from these pages: a chord diagram to reveal the distribution of securities underwriting, a Sankey plot to track the ill-gotten gains from a bank robbery, or a treemap for the geography of bitcoin mining. Lest students get carried away, traditional visualisations have their place: a simple heatmap matrix more than suffices to capture home country bias in investment. Pie charts, population pyramids, and candlestick plots all serve their purpose. Obviously this “atlas” makes ample use of Geographic Information Systems (GIS), but even the humble scatter plot has its moments.
Financial innovation enabled the effective allocation of cost from lost cargo under the Medici in the 17th century, and later the pooling of risk in France under the Sun King.
While Wójcik and his team write at a level accessible to any fresher, almost every page offers some novel fact likely unknown to the erudite: like the Roman origins of the adage that corruption always leaves a trail (“follow the money”, i.e., sequere pecuniam), the origin of world’s first sovereign wealth fund (founded by the state of Texas in 1854), or states with a surprising proclivity for levying international sanctions (Norway). Along the way the authors touch lightly on financial minutiae like the shortcomings of Value-at-Risk, the technology behind high-frequency trading, or the precarious state of defined-benefit pensions. The ample bibliography makes evident the work it took to unearth so many nuggets.
An introduction to short selling compares the practice to a magician’s trick, instead of, say, pointing out how it incentivises market participants to uncover fraud.
The book spotlights triumphs of the market, both historic and contemporary, throughout. Europe’s Age of Discovery relied on more than superior shipbuilding and weapons. Financial innovation enabled the effective allocation of cost from lost cargo under the Medici in the 17th century, and later the pooling of risk in France under the Sun King. Travelling for work still matters today: one section charting the flow of remittances makes clear the mutually beneficial results of migrant labour for all countries involved, but especially the very poorest like Haiti and South Sudan. Further up the development ladder, the denizens of Bengaluru have enriched themselves by providing outsourcing services to firms the world over.
Despite these success stories, the book often downplays the private sector. At one point the authors state that “investors have much to learn from academics, and certainly not just from economists.” True, but academics writing about finance might benefit just as much by considering the views of professionals working the field. An introduction to short selling compares the practice to a magician’s trick, instead of, say, pointing out how it incentivises market participants to uncover fraud. Their explanation of initial public offering (IPO) pre-placements deems the practice “a crony way to run capital markets” where they could have explained how the practice reflects underlying incentives and uncertainties. Regarding the Troika’s bailout of Greece in 2010, the authors contrast funds that repay creditors with those going to the “real economy,” as though a nation defaulting on its obligations would have a benign effect on its economy, “real” or otherwise.
Banks enable the safety and liquidity of personal savings, capital crosses oceans to fund entrepreneurs attacking entrenched incumbents, and joint-stock companies enable voluntary collective action and wealth creation on a scale unimaginable to our ancestors.
Any book of such breadth will omit and simplify more than it can include and explain. However, many of the authors’ choices reflect political leanings. A map of FICO scores by US county highlights concentrations of subprime borrowers among Native American tribes, but a paean for money transfer services in Kenya make no such distinction between, say, Kikuyu and Maasai. When considering how credit rating agencies from developed countries appraise sovereign bonds in the Global South, they note that “being judged from afar is a disadvantage.” An accurate statement, but one that gives no hint as to why those firms might prefer to locate in Dubai or Singapore instead of Maputo or Caracas. A discussion of inequality similarly omits the bigger picture. The authors lament that “global wealth has grown at a highly unequal rate since 1995,” but they do not mention that extreme poverty plummeted at the same time.
Instead the authors make their stance clear on the book’s very first page, musing that “Indigenous Australians used a bartering network that spanned a whole continent, prospering without money and finance for 50,000 years or so until the plunderous West showed up…” No doubt many people in pre-modern societies enjoyed lives suffuse with kindness and fulfilment. But everyone reading Atlas of Finance will do so in a world undergirded by the institutions and practices collectively labelled “finance.” Banks enable the safety and liquidity of personal savings, capital crosses oceans to fund entrepreneurs attacking entrenched incumbents, and joint-stock companies enable voluntary collective action and wealth creation on a scale unimaginable to our ancestors. All of which makes it strange to read a book that approaches this subject with such ambivalence.
None of the forgoing implies that Wójcik and his team failed to produce a valuable primer. All writing, including this review, reflects the limited purview and concerns of the author. But if Atlas of Finance succeeds on its own terms by introducing the subject to financial novices, many of them will finish this book ready and eager to learn more.
Note: This review gives the views of the author, not the position of the LSE Review of Books blog, or of the London School of Economics and Political Science.
Main image: Kollawat Somsri on Shutterstock.
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