Follow the money

But you did find some loans in Asia.

In Asia things were being built and I was able to find the shrimp farms that my Brooklyn shrimp importer was getting shrimp from, and the refinery that was going up, but there was just no limit to what was being built at all. [After the Asian crash] and Chase had $50 billion in risk, the IMF came in and the Thai government assumed the entire loan. The bank didn't lose one single penny. So why shouldn't they do it again? They got the money.

So what happens next?

The money is still piling up in fewer and fewer hands. We have to slow them down; we have to get stoplights and traffic signs [to slow down capital flows]. They can't stop themselves. In a sense they are crying out, "Stop me before I kill again."

They can't stop themselves. [In Malaysia] I spoke to some fishermen who couldn't fish the way they used to because my shrimp farms were polluting the coastlines ... It was impossible for fish to live closer than, like, maybe 15 or 16 miles off the coast. So these fisherman that I talked to now had to get motors for their boats to go 15, 16 miles out. They had to borrow the money to do that, so that brought them into the global economy.

They used to say, they fished until they had enough -- that's what they liked about it. Now they had to fish to pay back the loan on the boat. When I first heard that phrase "stop when you have enough," I knew it was a lovely phrase, but only afterward did I underline it and realize it was the most radical thing I've heard in my whole odyssey. Because my money can't stop when I have enough. There is no "enough"; the money cannot stop.

You wrote most of your book during a huge economic boom in the United States. What impact has the current downturn had on your own thinking?

I think it makes the book more comprehensible to people. My notion was that each new emerging market was a stopgap before we faced the real problem.

So we're facing the real problem now.

Yes. Now mind you, I'm not one of those people who think capitalism has to have its crises. I've always thought, sadly I might say, if they used all the Keynesian measures at their disposal they could keep an economy steady, not maybe nice, not maybe kind, but steady, from the point of view of not having financial crises. But I realize now, that that's only if people aren't too short-range greedy -- and it seems like my saying capitalism could be stable if the [money men] are not greedy is like saying socialism could be democratic if [socialist leaders] are not corrupt. [Laughs] If. If. If.

How did your own thinking change during the course of reporting your book?

I knew people were out for profit and out for money, but I thought it was all subtle. I thought it worked by the invisible hand. I didn't know it worked like a fist in the face. I expected my mutual fund manager, when he gets together with the head of a company, they talk about sports, they talk about mutual friends and then they say at the end, you know, by the way I'd like the stock to be doing a little better. I didn't know he walked in and said I own 5 percent of your shares and you are making 9 percent profit and I expect 17 percent profit and you will be out tomorrow if you don't get it to me by selling off these companies. I didn't know that "unlocking the value" -- which is what they keep saying; they buy the shares and then they "unlock the value" -- I didn't know that unlocking the value just really meant going up to the CEO and saying unlock the safe, and give me the money that's been saved for investment in the company. Just give me the money for my shareholders, or else you are out of a job tomorrow. I didn't know that that's what unlocking the value meant.

Does solving that problem mean people should accept that they don't have to have 20 percent returns on their investment. That they could be satisfied with 10 percent?

That could be part of it -- if you really want to put a limit on growth. The other way is to just recycle the money like Swedish socialism. Swedish socialism is capitalism. All the companies are private -- it's just that the profits are transferred in the way of many, many, many benefits -- they are transferred so the buying cycle can keep on going.

When you are tracking Chase loans or the investments that your mutual fund makes, you use the terms "we" and "my money" as if you are part of Chase or a major investment banker yourself. It comes off as a little jokey -- your small investment means that you are now underwriting the construction of an oil refinery in Thailand or about to restructure the Swedish economy. But it also seemed to have a deeper meaning, to suggest that we, the average American who has money in a 401K or IRA or college fund, are complicit in the global flows of money that suddenly put millions out of work in Thailand or Indonesia. Are "we" responsible?

I don't know about that. If everybody in the country had $29,500 in the bank and another $5,000 invested in a mutual fund like I did and they were all equal amounts of money like that, there would not be the same drive and dynamism to make 20 percent returns instead of 10 percent. It is because of the larger accumulations that the pressure is there.

Did the process of reporting this book make you any angrier?

I never really understood before why people could actually be poorer than before -- how it could be that the money swept in, the money swept out, and people in a country like Thailand that grew a lot of rice could suddenly have less rice to eat -- that was something I couldn't understand ... It took me a long time to get that.

Before I started, I thought these places are poor, these people are starving, and then these new opportunites came along with globalism, and there were some winners and some losers. Some people went to the city and other people had their land gobbled up by shrimp farms. But what I didn't realize is that after something like the Asian crash, when you have to pay back the money with baht that is worth half as much as it was before ... I didn't realize that the IMF comes in, and says to your government, "Yes, these are private loans to private companies from our private banks to your private banks, but the Thai government is going to have to assume the responsibility of having them paid back in dollars. And in order to get those dollars these are the things that you are going to do. There will be no more food subsidies. There will be taxes that double the price of food and that's the means by which you are going to sell less food inside the country and more is going to go out for export and by that means you are going to get good foreign currencies to pay us back with."

I thought that we were just knee-jerk; if "they're" doing it they must be bad. But I suddenly realized that without any kind of limitations or restrictions [on global capital flows] it really will be the ordinary people that pay the price every time.

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