An Excellent Primer
What happens to a business whose product is misused by their home nation's geopolitical rival? This issue is tackled with the nuance and the necessary context to illustrate the importance that political risk plays in volatile markets. Without taking the time to invest in the proper insurance, the investors in Ingersoll Rand would have been left to incur much more significant damage then they ultimately had to. (2009, 56)
Anyone who reads Bremmer's blog on ForeignPolicy.com (http://eurasia.foreignpolicy.com/ ) realizes that even the most mundane political occurrences have effects that ripple across markets. Bremmer's J-Curve (also recommended) detailed how different societies go through democratization and how these transformations and the differences in regimes represent different levels of stability. I was excited to see he produced a book more focused on the economic ramifications of political unpredictability. My bias for Geopolitics is coming through b/c another example comes from his excellent chapter on the subject in regards to the "Iran Premium." (2009, 59) After it became clear Iran was stalling for a time and the evasive language President Bush used to not withdraw the right to use military force it seemed like a diplomatic problem was going to transform into an armed one. Of course the Strait of Hormuz only magnified the problem that a second OPEC nation might become involved in a military conflict with the United States. This anecdote shows the importance that political risk and instability plays in global markets and how understanding these nuances can assist investing. As is detailed later on in the book even if one knows when a détente is reached using that information profitably is another matter, but without the first part of that equation the second is compounded even more.
His summary of the main schools of IR is excellent, coming from a former student who has had to expand on them in seemingly every IR course he took. For anyone interested in his discussion about the Great Game here's the link to his Davos event: http://gaia.world-television.com/wef/worldeconomicforum_annualmeeting2009/default.aspx?sn=7003?=en. Also, I would suggest a book Bremmer edited with Ray Taras, "Nations and Politics in the Soviet Successor States."
One characteristic of good books (at least in IR, not so much in fiction) is copious citations from respected journals and other literature in the field. At 42 pages the Notes section includes journals such as International Organization, Financial History Review, International Security, and Niall Ferguson's seminal history about the Rothschild Banking House. (His "Ascent of Money," "Pity of War," and "Empire," are also all excellent) Heavy use of Taleb's "The Black Swan" has prompted me to purchase that book, as well. My only complaint is that the endnotes weren't footnotes, but no one else seems to care about this but me. (Long live Chicago Style!) Good thing Border's gives out two receipts with every purchase!
Another reviewer suggested that the book posited a defense of the Bush Doctrine (so famously summarized by Sarah Palin). Hardly. The book offers two examples of preemption, one of which was successful, Israel in 1967, and one of which is more ambivalent, US involvement in Iraq. These occurrences show that quick judgments of political activities are often vacuous and can lead to disastrous results for investors.
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