Underground Empire: How America Weaponised the World Economy

The book Underground Empire, authored by Henry Farrell and Abraham Newman, is an in-depth account that sheds light on a hidden yet profound dimension of present-day geopolitics – American ability to exert control over and manipulate the global financial system. This book provides a timely yet intellectually stimulating analysis of how the US leverages international financial and technological networks to project geopolitical influence, resulting in critical and often unforeseen repercussions for the global order. Both Farrell and Newman are veteran scholars in the disciplines of international relations and political economy, which makes them exceptionally well-positioned to elucidate the inherent vulnerabilities of the international system, whereby interdependence serves a dual function: a pillar of stability as well as a means of control for states. Newman’s acquaintance with the political dimension of global networks, complemented by Farrell’s extensive scholarship on the strategic exercise of power within these systems, enhances the book’s overall analytical rigor.
At the heart of the book is the notion that, in today’s world, power is not solely determined by military strength. Instead, it hinges on strategic management and intentional control over global commerce and technological interlinkages, a strategy referred to as “weaponised interdependence”. This implies that the US has used complex interdependence as a means of political influence, mainly to secure its interests globally. This “war without smoke,” as the authors term it, is a clear example of how the underground empire influences the competitive landscape.
This standpoint is intriguing because it challenges the mainstream, optimistic perspective of globalisation, encapsulated by Thomas Friedman’s thesis of a “flat world” where all states can compete on equal footings. Farrell and Newman present an alternative perspective, asserting that the global economy is plagued by numerous “choke points” and “centralised nodes” that the US exploits to employ economic power in a way that could potentially undermine the very principles of globalisation, such as international trade and cooperation. Overall, they argue that US national security is bleeding into economic warfare.
In examining the US strategic shift in the aftermath of 9/11, the authors argue that America has moved away from conventional multilateralism to adopt a more assertive and unilateral approach. The book frames this strategy not as a mere response to the threat of terrorism, but as a broader recalibration of power dynamics within the international financial system. One of the book’s strengths is that it discusses numerous cases to substantiate the main argument.
For example, the Banco Delta Asia incident effectively showcases the wide-reaching implications of the US financial strategy. Due to its augmented authority under the US PATRIOT Act, America labelled this Macau-based bank as a “primary money laundering concern”, alleging that it had ties with illicit North Korean activities. What is noteworthy is that this move not only froze North Korean assets worth $25 million but also sent a strong message to banks worldwide that by solely targeting a single institution, the US can generate a ripple effect internationally, coercing other banks to adopt more stringent monitoring practices. The book effectively highlights the power asymmetries within the international system and raises ethical concerns about such dominance, particularly for states at the periphery of the global power structures.
Additionally, what is particularly compelling about this book is that it prompts an in-depth reflection on questions, such as whether or not such unilateral actions are sustainable and whether multilateral cooperation is eroding, heralding an era of interdependence with more fragile alliances. Even though the authors provide remarkable evidence of the extent of US influence, they also acknowledge potential limitations and unintentional consequences of American strategy. These include the ability of target countries to adapt and formulate innovative counterstrategies. For instance, Huawei’s launch of the Mate 60 Pro indicates China’s resolve to circumvent US sanctions and export controls. Therefore, the authors identify a key challenge to be that the US competitors may be prompted to pursue technological independence and self-reliance, which in turn could compromise American power and influence in the realm of international finance and commerce.
As opposed to numerous critiques of globalisation, the authors go beyond mere analysis and offer policy recommendations. They assert that the “underground empire” can be utilised as a force to promote collective good and address pressing challenges, such as environmental sustainability, human rights violation, and socio-economic inequality. For example, they suggest that sanctions be imposed on nations that cause pollution or on tax havens that shield the wealth of corporations and individuals. The idea is to establish a regulatory framework in which legitimacy and power align to foster accountability and the common good. However, some readers may find such recommendations overly idealistic and detached from current geopolitical and economic realities. The assumption that all nations might agree to and abide by such policies could make the proposed solutions feel disassociated from the practical problems facing the global governance system.
Underground Empire resonates with the current climate of economic nationalism and rising trade tensions, providing a timely lens through which to view geopolitical conflicts, particularly the US-China trade rivalry. However, some might argue that while the book is compelling, it may exaggerate the US hold control over the global network. With the unprecedented rise of China and other powers investing in alternative technologies and networks, the US dominance is not guaranteed in the long term.
There are numerous instances demonstrating that the US position is less inevitable than the book suggests. For example, China has formulated the Cross-Border Interbank Payment System (CIPS) as a substitute for the SWIFT banking system. Similarly, Russia has also leveraged energy as a means to exercise economic influence by weaponising energy exports. Moscow has leveraged its gas pipelines supplying natural gas to Europe to sway European political decisions, most notably exhibited by energy cuts during the Russia-Ukraine war.
In conclusion, the book offers a robust analysis of a critically important issue facing the global financial system, and is written in a lively and engaging tone. However, it is among the books that raise more questions than answers, especially in terms of how the world can avert the potentially self-destructive outcomes of weaponised interdependence.
Moreover, readers who do not have a background in international finance, economics, or international relations, may need help understanding certain sections due to the use of dense and specialised language. While a more accessible approach to these technical topics would have broadened the book’s appeal and reach, it is still a must-read for anyone interested in geoeconomics and geopolitics.