Book Review: ‘$uperHubs’
The World Economic Forum (WEF) lasts only a few days in January, when the international elite jet into Davos, Switzerland, give talks, network, make deals, and fly out again. These are billionaires like George Soros and Ray Dalio, as well as officials like Chinese regime leader Xi Jinping and the International Monetary Fund (IMF) managing director Christine Lagarde.
The people who meet for a few days at conferences like the WEF shape public policy and markets, and therefore a big part of our lives. Who are these people, and how much do we know about them? The carefully planned public appearances at conferences like the WEF or in the media merely scratch the surface of a network of rich and influential people who tend to stick to their kind and whose dealings are often shrouded in secrecy.
Fortunately for us, Sandra Navidi, CEO of the consultancy BeyondGlobal and herself an insider at the highest level, has written a book decoding the ways of the financial elite and their networks. In “$uperHubs: How the Financial Elite & Their Networks Rule the World,” Navidi not only provides examples of the financial world’s biggest players, the titular “superhubs,” but also analyzes the network as a system—and its potential danger to society.
“We learn how the superhubs’ alpha personalities, inexorable quest for power, and desire to leave a legacy propel them to top network positions that come with access to unprecedented opportunities,” writes Navidi.
Who comes to mind when you think about the thirst for power and money? Maybe someone like George Soros, a regular attendee at the WEF. So he made a lot of money as a hedge fund investor, but how did he rise to such prominence?
“Soros first built a reputation as an extraordinarily successful investor. However, in a world where countless people make a lot of money, financial success alone did not sufficiently distinguish him from others in finance,” writes Navidi.
She goes on to say that Soros then became a thought leader (he developed the financial theory of reflexivity) and a philanthropist. And he now has access to pretty much anyone on the planet—access he uses to make more money and shape the world according to his views.
However, Soros is just one part of a powerful network of powerful people, which Navidi analyzes with the framework of network science, a field whose theories are used in biology and information technology, among others.
“All networks, whether natural or man-made, behave in the same manner. According to the law of ‘preferential attachment,’ all nodes prefer to attach to other nodes with the most connections, because a greater number of connections increases the chances of individual survival,” writes Navidi.
She uses this natural process to explain socioeconomic phenomena, such as income inequality. “Those executives who are the best connected attract the newest contacts of the highest quality, and they all stick together. Their financial expertise optimally positions them to maximize preexisting wealth, which then makes them even more desirable links. Wealth, in turn, creates a vacuum of exclusivity and privilege that homogenizes the world’s richest and most powerful financiers even more.”
So Navidi, who knows most of the people she writes about in person and has studied network science to analyze the financial elite, confirms what the rest of us already suspected—that elites are using the system to their advantage, either consciously or unconsciously.
Good $uperHub, Bad System?
Navidi’s book is peculiar in being quite critical in some cases but avoiding giving specific criticism in others. On the one hand, Navidi comes down hard on the financial system and the elite networks that she describes as amoral, devoid of feedback, and lopsided.
“Their collective actions have led to a crisis of capitalism, revolt, and risk of system failure,” she writes.
On the other hand, she avoids direct criticism of individuals like George Soros or Jamie Dimon, or institutions like the Federal Reserve and the IMF. She does, however, include the negative stories of publicly disgraced superhubs, like former IMF head Dominique Strauss-Kahn and former Lehman Brothers CEO Dick Fuld to show how poor choices can lead to expulsion from the network.
But then again, Navidi says right off the bat that “this book, while being critical and raising controversial issues, is not a ‘bank bashing’ book.”
And she does raise and explain many of the controversial issues plaguing our times—from regulatory capture, to the “old-boy” network, to globalization and the financialization of the economy.
“Systems with unchecked reinforcing loops, however, ultimately destroy themselves. Through feedback loops and power-laws, superhubs and their networks have significantly contributed to skewing the system. Potentially corrective shocks like the financial crisis have failed to rebalance it because the overly influential superhub networks have blocked fundamental changes to protect their vested interests.”
Although “$uperHubs” avoids directly criticizing the banks and individuals currently “in power,” it describes in great detail the people who shape our society and introduces network theory as a way to explain this complex system of individual relationships working within all institutions.
So how do we fix the system? Navidi thinks the superhubs have the biggest responsibility to recalibrate the system as they wield the most power. But she also calls on all of us to take responsibility within our network.
“Since we are all nodes who drive the system with our individual actions and the resulting cause-and-effect feedback loops, we must all actively contribute to change. Hopefully, in a concerted effort, we will succeed in changing the monopolistic structure of networks to create a more diverse, equitable, and sustainable system that benefits all.”