Commodities, technology, & the commanding heights

Technology leadership is not enough to control the commanding heights of the global economy; physical flows (energy, commodities, goods) are also central

Vladimir Putin once said that whoever controlled artificial intelligence would control the world.  Maybe so, but that won’t be Russia.  John McCain’s description of Russia is closer to the mark: ‘It is a gas station run by a mafia that is masquerading as a country’.  The direct global economic impact of Russia’s invasion of Ukraine is largely transmitted through energy and other commodities.

Technology is commonly thought to dominate the commanding heights of the global economy, such as the tech giants of the US and China (Amazon, Google, Alibaba, and many others).  And over the past two years, innovation on vaccines has been central to economic and health outcomes.  More broadly, some have argued we are in an intangibles economy where assets like brands, ideas, and relationships matter more than physical capital.

Technology indexes have soared over the past few decades, and economies that have strong technology capabilities have performed well – from Silicon Valley to Israel and Taiwan…