Ed Conway on the Hidden Supply Chains That Run the World

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2:41Ed Conway: Part of the point here is to say, beneath the surface of everyday objects, and this time, you know, I'm looking at everyday objects, cars, bread, and clothes, Beneath the surface, beneath the label, there is this story that is far more fascinating, sometimes disturbing, sometimes bonkers about where stuff actually came from.

3:11Welcome back to Meryn Talks Money, the podcast in which people who know the market explain the markets. I am Meryn Somerset-Webb, and this week I am speaking with Ed Conway, economics and data editor at Sky News, columnist for The Times and Sunday Times, and author of The Best-Selling Material World. He joins me to discuss his new book, Trade World, a sweeping history of the global networks that connect us and the forces now threatening to pull them apart. We talk about how trade in everyday goods from bread and clothing to cars has shaped economies, politics and human history. Why today's supply chains are far more complex than they appear.

3:47And what happens when the system we've come to depend on starts to fracture. Ed, welcome to Merin Talks Money.

3:54Ed Conway: Thank you for having me back. Right, Ed, this is a story about trade. And we start, we start, you go through three different things. You go through bread, you go through cloth and you go through cars. effectively give us a really well-considered history of trade throughout the ages. But I'm afraid I'm going to hope that the reader will go and take care of a lot of that early stuff themselves. And I want us to really look at where we are now. And in your last chapter on cars is where you really talk about modern day trade a lot. And you talk about the fact that we've moved from a world where everything is made locally to a world where we think that we have free trade, to a world now in which basically the entire world is a giant supply chain.

4:44And you compare it to the fungal network beneath us, the, how do you say it?

4:51Ed Conway: Yes, the mycorrhizal network. The mycorrhizal network, thank you, which is beneath us all the time. And we don't see it and we don't think about it until it suddenly pops up around us. yeah and we don't and in a way we don't we're still trying to fathom it um it's only kind of now a biologist starting to realize what i know this is not a podcast about fungi but uh only now are kind of biologists trying to try and trying to understand the extent to which a tree depends on the fungus beneath the ground and all of these tiny little kind of fungal roots that are that are connecting with other trees and all that stuff all of which is to say um this is kind of a book about supply chains like it's not that that's not in the title because i guess i guess the publishers didn't think that was kind of sexy enough but basically this is about why supply chains are extraordinary and why our understanding of how they actually function um is relatively primitive and why generally speaking and this is in this sense it kind of it does it's a companion piece to material world why generally speaking we tend to realize how the world around us is structured mostly when something goes wrong.

5:57Ed Conway: So when there's like a fire in a factory or you have the Strait of Hormuz being blocked off or whatever it might be, or a ship kind of blocking the Suez Canal. And the reason why I've kind of gone back and looked at this is obviously, you know, where are we today? We're in this moment where this is being tested. The global economy is being tested in various different ways and where geography is returning. I mean, geography never went away. And we've talked about this quite a bit, Maren, haven't we? Geography never went away. geology never went away but we're now in this at this point where everyone's kind of realizing oh hold on this stuff actually matters and you know to your point i mean in a way one of the starting points for the book was a few years ago i went to this factory where they it is a place in birmingham where they make little metal parts that go into the car supply chain uh and the car supply chain is an extraordinary kind of structure an extraordinary creation um you can you know you've got 30 ,000 if not more parts within a car many most of them being sourced from other companies and they all get assembled at the car plant at the end but one of these little parts that I saw being made in this tiny little factory just on the outskirts of Birmingham was a tiny little electrode and this electrode they said goes into the rearview mirror of your car and stops helps it do the auto dimming function so if someone flashes their headlights behind you you don't get blinded in your mirror so it's a tiny little electrode but without it you don't get that functionality.

7:20Ed Conway: And I said to the guys at the factory, how many of these are you making? And they said, we're producing 55 or more percent of the global supply of this part. And to some extent, the point of this book was to ask the question, how is it that we've got to the point where we have concentrated so much production for something in a single place? And what happens to the world when you start to take that mycorrhizal network apart? and things go wrong. And, you know, to some extent, it seems immensely dysfunctional. But to some extent, you know, that you've got so much production concentrated in a single place.

8:00Ed Conway: Well, the other example I like to give is when you buy, you know, we in the UK like our fish fingers or fish sticks, as I believe they call them in America. When you order up some fish fingers, perhaps the fish was caught just off the coast of Scotland. But a lot of the time, that fish having been gutted in the boat that catches it it gets flash frozen sent to china to be processed 15 000 miles and then sent back to here for the final stage of production to be you know put into a box and go into the supermarket and most people when they buy the the fish fingers they look at the label and the label says it was caught in the north sea and packaged in the uk and you would have no conception about this extraordinary journey that has gone on and so part of the point here is to say beneath the surface of everyday objects and this time you know i'm looking at everyday objects cars uh bread and clothes beneath the surface beneath the label there is this story that is far more fascinating sometimes disturbing sometimes bonkers about where stuff actually came from and that backstory then gives you this i think a richer sense of the world we inhabit when you're then starting to think okay we've got this trade war at the moment we've got what's happening in hormones how does this kind of impact everything else and the answer is it impacts it in so many different ways some of which are kind of scary but some of which actually have a surprising resilience that you might not have appreciated until you look at the world from the other you know from from bottom up rather than top down so that's the idea and it's been one of the most fascinating kind of journeys sets of rabbit holes I've ever gone down.

9:36Ed Conway: And yeah, I've learned quite a lot through the process. I bet. I bet. One of the things that, let me pick you up straight away on what you said about resilience. Does this make, or does this underground network make things more resilient or less brilliant? It's very taken by chart. Page 340, for those of you who haven't got it yet. Page 340, wonderful chart here. You've got a carmaker, and then you look at the suppliers to said carmaker and they've got their tier one suppliers and then they've got tier two suppliers. And then underneath that, you've written lots of tier three suppliers. And this is a great chart because what it does, it plays into exactly what - I drew it originally.

10:13Ed Conway: I drew it and it was so messy that the publisher actually did a slightly tidied up version of it in the book. We have AI for that stuff. We have AI for that stuff for making your charts. But it's just interesting because you've got your three tier ones and then the way you've drawn the chart, there are six tier twos. Maybe there are loads more than that. It's a pyramid. But this whole idea that at the bottom, making these little parts, as you say, for mirrors or for lights or a tiny bit of a chip for this or a casing for a chip for that, whatever it is, you've got maybe hundreds of tier three suppliers.

10:46Because what did you say is being 30 ,000 parts per car? And you look at that and you think, well, hang on, when we think about supply chains branching out around the world and we think of being able to get parts made everywhere in our heads, but like investing, you think, well, that's diversification. So we've diversified supply chains and that's a good thing. But actually, it brings in a new element of concentration, which is kind of worrying.

11:09Ed Conway: Yeah, because that part that goes into the rear view mirror, most of them are made in a single factory. and if that factory goes down then you've got a problem um during the the tsunami in in 2011 in japan terrible event obviously fukushima happened and all of this awful stuff but alongside that um there were various car parts supply factories which no one had ever heard of making little electrodes and making obscure types of paint which were affected by it and all of a sudden, Toyota and everyone else realized, oh, hang on, this actuator we're using to make our electrical windows go up and down, the majority of the world's supply comes from a single place, and that single place has just gone down.

11:55Ed Conway: And the point behind this, which I don't think has been as well studied as it could be, is that one of the logical forces behind globalization and behind the effort over the past few decades to make stuff as cheap as possible, which is, you know, that's ultimately the story of the economy in the past 50 years or so, post Berlin Wall, has been not just to disperse production and to make it so that if you're assembling a car here in the UK, many of your parts will come from China, and they increasingly do. But to make it so they increasingly come from a single factory in China, or indeed in Birmingham and more somewhere else.

12:35Ed Conway: And that is a concentration which is unnerving. But I'll tell you what the most, for me, the most striking thing about that story of the tsunami, and there's a whole kind of, you know, I go into it in depth, it's an interesting natural experiment, isn't it, in when things go wrong. And I think if there was like a takeaway from the last book I wrote, in this book as well, it's to say, gosh, we tend only to learn when these things go wrong, when you know or we tend only to learn the structure of a supply chain when something goes terribly wrong so a fertilizer plant is shut down all of a sudden you realize oh hold on that's where our carbon dioxide is coming from so all of a sudden you can't slaughter pigs and you can't you know have fizzy drinks all becomes some random fertilizer plant has been shut down um or you know the in the tsunami a lot of these plants went down and all of a sudden people couldn't get the shades of paint they wanted or they couldn't have all of the gps system that they wanted in their cars, you realise this is the way the world works.

13:31Ed Conway: Wouldn't it be nice to know about that stuff ex ante rather than ex post or just to have some sniff of it? And that kind of understanding of the world's economy as a sort of map rather than this kind of chain as a web of different dependencies. I wonder if that's one of the useful future areas of study for economics, as well as the fact, back to your point, that globalization hasn't dispersed. It has concentrated. It's just concentrated lots of individual parts in particular places. Big companies have effectively outsourced everything along the way. They've outsourced their stockpiling. They've outsourced inventory control.

14:10They've outsourced all these mini manufacturing bits. And with that, by doing that, they've outsourced responsibility at the same time, outsource control and outsource knowledge of their supply lines, because no CEO of a big car company can understand 30 ,000 separate suppliers.

14:29Ed Conway: Exactly. Yeah. You know, it's back to the kind of the crazy mycorrhizal network, the most complicated biological system in the world. No one can begin to fathom it. So we don't try. And in the case of kind of cars, you just hope that the person supplying the things to you is actually going to get them to you. And then they, in turn you know the person who's making the the module that goes on your dashboard they in turn keep an eye on the next person down in the chain but you know talk to someone an oem uh car maker whose badge goes on the front although i would say isn't really the maker of the car i mean that's that's the the interesting thing to me um talk to them and you know they won't necessarily know the mind that things are coming from even though there's been lots of work that's been supposedly be done on this in practice no one really knows their supply chain in depth and whether that's reassuring or not you know i don't know but i'm starting to understand that stuff is is pretty important and i think there's some more of it we could we could kind of begin you know we could begin to kind of delve beneath the surface so that if something goes wrong in the future we'd have a better sense of it um but more than anything else it's just kind of it's interesting and we you know this is the way the world works.

15:39And think about the, you mentioned that, you know, things have

15:43Ed Conway: become increasingly kind of outsourced over the course of the past kind of half century. I would say, like, if you were choosing, you know, the top 10 most important trends in the global economy in the last kind of 50 years, the fact that things have been outsourced and increasingly offshored, so the production of something has moved to another country, I would say that is one of the most consequential economic trends we've seen in the last kind of half century. Because if nothing else, that's what's contributed to the China shock. It's what's contributed to the rise of Donald Trump. It contributed to Brexit, the sense that all of these areas of our industrial heartland have been hollowed out and we're not making stuff anymore.

16:19Ed Conway: That is really important. And yet, no one has really written the story, the history of how that actually happened. And so one of the things I've kind of done here is I've gone back to the very first people who began to invent offshoring and went out to Hong Kong. This is garment manufacturers went out to Hong Kong and said, okay, the stuff that we're currently making in South Carolina, can you do it here in Hong Kong? And we, in this case, Americans and to some extent European clothing manufacturers, went out there to Hong Kong. They went out there to Asia. They taught the people making clothes out there how to do it at a standard that was good enough that they could then buy stuff for cheaper and bring it back to America.

17:00Ed Conway: That was the beginning of something that then led to the offshoring of technology. So, you know, high-tech stuff, offshoring of toys, offshoring of car production. And here we are in 2026 talking about the car industry in, to some extent, America, but even more in Europe, facing the single biggest existential crisis it ever has because there is this wave, this tidal wave of cheap cars coming from China. And the truth is, it's not just that they're able to make cars cheaper than we can. And it's not just that they have a kind of, you know, almost all of the battery supply chain for EVs. It's that they are also better at making tiny little components that go inside them than we are.

17:39Ed Conway: They are better at making the car from the bottom up than we are. And that is, I think, one of the biggest stories that is going to hit us. It's not just the job cuts of the car makers. It's the fact that those car makers support a massive industrial base that stretches across all of those countries of good, pretty well-paying jobs. If the car companies go, basically most of your manufacturing sector is gone as well. And I think that is going to be absolutely enormous in the coming years. And we're just only beginning, really, to see the impact of it now. Yeah, because it is one of the things that you talk about in the book is how surprised you were to find that crisscrossed in the UK, there are lots of small, medium and small companies making tiny little parts for the car industry and for other industries as well, of course.

18:26but they're still there making precise little things that go in cars all over the place.

18:32Ed Conway: Yeah, and they make the car. And that's the point is the car maker. Everyone thinks of, you know, the OEMs, they think of the badge that goes on the front of the car. They think of the seats that go inside them. You know, this is a distinctive Porsche seat, or this is a distinctive Volvo seat. The seats aren't made by Volvo. They're made by one of three companies for the most part. There's this kind of triopoly of companies that control the manufacture of car seats all around the world. And so, again, what looks on the surface, you know, what the label is saying is one thing, what the reality is, is very different.

19:03Ed Conway: And that is both interesting and tells you something about the structure of the economy around us, but also tells you something more about the kind of the vulnerabilities and the opportunities in the coming years.

19:25This is the Bloomberg Tech Minute brought to you by ChachiPT. I'm Carol Masser. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Businessweek's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs, and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw, innate intelligence.

20:03A spokesperson for SpaceX didn't respond to a request for comment on its recruiting and hiring practices, but according to recruiters, advisors, and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company, and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates, quote, must be willing to work extended hours and weekends as needed. One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time.

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22:31And one of the things that you talk about in the early part of the book is the early discussions around trade, free trade. Should you have free trade? Shouldn't you have free trade? How does it work? the development of the theory of comparative advantage, the arguments in Adam Smith's time about all this. And we're slightly beginning to get to the bit where you look around and you say, well, okay, in manufacturing at least, where is the comparative advantage for the West? Which brings us back to one of my favourite Adam Smith quotes that you use at the beginning, defences of more importance than opulence.

23:06It's more important to have a secure nation than it is to have the little luxuries that come from abroad. Because, of course, in Smith's time, of course, it was the luxuries that came from abroad, because we'll come on to this in a minute. But when the cost of transport is very high, it's only super luxuries that come in from abroad. So in his day, you were talking about if you were having free trade, what it meant that you were importing luxuries as opposed to grain. We're in a slightly different world now, obviously. But the point remains, if you lose your manufacturing base, then you also effectively lose an awful lot of things.

23:41You lose your tax base. You lose your ability to do what, of course, we did in World War II, which was convert every car manufacturing factory into a weapons factory. You lose all sorts of things when you lose your manufacturing base. Have we got to a point when it is irrevocably lost and it's hard to find anything in the maker world that the West might have a comparative advantage in? Super dangerous.

24:05Ed Conway: It's a really good question. I mean, I think the UK is at the vanguard, for better or for worse, of this, because we have de-industrialised faster than anyone else and continue to. Since I wrote Material World a few years ago, many of the plants I went to are gone. Many of them have been shut down. They're not there anymore. Fertiliser plants, steel plants, a lot of them are gone. And a lot of that is down to high energy prices, which again is choice-related, policy-related. But it is also a long curve of deindustrialization that goes back many years in the UK. And well, I mean, so back to your point about Adam Smith, you know, a lot of the debate that was being had back in the kind of early 19th century about the corn laws.

24:52Ed Conway: So Corn Laws, in a sense, it was the kind of Brexit of its day. It was this moment where the UK was having to decide between, are we going to have domestic production of our wheat or are we going to buy them from overseas and it's going to be cheaper? And it's an amazing moment, really. And actually, a lot of people look back at that period and call that the moment, the birth of free trade. um but that debate actually in some ways it's it's still surprisingly vital because precisely as you say it was about whether security trumped economics you know and what are we living through at the moment if not exactly the same debate um we've got all of these economic principles about wanting basically to have cheap stuff and you know it's consumer raise the consumer surplus ensure that even if it means kind of having our fish fingers processed in china that is the logical way to make stuff cheaper and people like cheap stuff and if they have cheap stuff they can therefore have this kind of surplus and go off and spend it um is that what matters the most or is there some residual uh reason to basically ignore that in favor of having some form of resilience and that's kind of what adam smith you know in the case of you know the corn lords it was all about, are we growing enough wheat to feed ourselves?

26:09Do we have food security in the event of difficulties?

26:13Ed Conway: Yeah. And are we going to have enough bread to feed everyone? These days, it may be about other things. It may be more about defence. It may be more about weapons. But nonetheless, it's the same principle. And we're seeing it kind of litigated right now in the UK and in the US. This question, this balancing act between something where if you were being an absolute kind of economic fundamentalist, you would say, it makes no sense to be mining tungsten in the UK, even though there's a perfectly good mine down in Devon. It's the second biggest resource of tungsten in the world. It has been out of action for years and years and years because it is just cheaper to buy tungsten from China.

26:55Ed Conway: But tungsten is really important when it comes to making weaponry and tools and all the stuff you kind of need if you're going to have an industrial economy or indeed a response to war. And so then you run into this other kind of question, okay, maybe it doesn't make sense to get all of this stuff in China in case things go in the wrong direction in the coming years. So maybe we should have our own tungsten. But that means more expensive tungsten. And it means more expensive everything that you want to produce here. It means more expensive fish fingers if you're going to get them processed here.

27:27Ed Conway: And having that conversation about, you know, the fact that things will be more expensive, that we have benefited from decades and decades of disinflation, which has led us into this slightly bonkers world we inhabit right now, where we send fish fingers to the other side of the world, where we order up bread from other countries, where geography seems not to matter. It does mean turning away from that. A lot of people would say that it's been this great period of free trade and globalization and the building up of these supply chains that has also given us a period of flat real wages in the UK.

28:03And so there'll come a point when you can't afford to buy the cheap stuff, which of course is a very Fordian way to look at it. You have to pay people good wages if you want them to be able to afford to buy anything. And if you're not manufacturing in the UK, where does the income come from? And obviously we have wonderful business in services in the city, whatever you throw at it just keeps rolling, financial services, building businesses, our legal businesses, etc. But in the end, solid economies really need to make stuff.

28:30Ed Conway: I think that matters. And I think it's a really unfashionable argument. And I think it's been quite a lonely argument to have for the last kind of, you know, five years or so. But I think it's an argument that people are seeing the logic of now. But then look at the history of the wars in the 20th century and the fact that, well, you know, if Britain hadn't had tariffs in the early 20th century, we probably would never have had a car industry because America would have just continued, which it did at the start, to just ship in, kind of knocked down Fords and sell them to us. And so we wouldn't really have had the car factories.

29:08Ed Conway: You wouldn't have had Longbridge. You wouldn't have had Trafford Park, all these places. If we didn't have those car factories in World War I and World War II, we probably wouldn't have had the wherewithal to very quickly build the planes and the artillery that we needed and the tanks that we needed to fight a war. And one hopes that we're not going to have to go through the same process all over again. But if you're going to fight a war these days, it kind of depends on your ability to produce artillery. Still, even old-fashioned stuff, it depends on your ability to make drones, which is a supply chain, which is kind of a brand new supply chain that China still has extraordinary dominance and depends on your ability to make relatively light batteries that can go into those drones.

29:48Ed Conway: On all of these fronts, it's not like Europe and America don't have the expertise because actually a lot of the patents for many of these different developments, the original patents, like the patent for the LFP batteries, lithium ferrophosphate batteries that China is so dominant in, those patents, the stuff was invented in the US. The patents were owned up until recently by Johnson Mathey, of all companies. They own the patent for LFP batteries, which is the battery that goes into pretty much every Chinese electric car these days. So it's not like we don't necessarily have the expertise in theory.

30:26Ed Conway: What we don't necessarily have is industrial scale. And I think that having that expertise in the same way that you know you've got these seed banks in norway that are collecting all of the seeds of how you know if there is some apocalypse here's here's the stuff that we might need to grow in the future i wonder if we ought to be kind of thinking consciously about the same thing for for innovations of you know that have a security uh focus and but we just don't think in those terms particularly in the uk and the reason why a lot of i've kind of rooted some of this book in the UK story. And I think the reason the UK is interesting internationally is because, as I say, if there's any country in the world that has gone gangbusters for both free trade and de-industrialisation and let's just focus on cheap things, it is Britain.

31:17Listen, there's an important question around this whole free trade and globalisation business. And I think it is the cost of transport. We talked earlier about how it really was the falling ease and falling price of transporting stuff around the world that makes geography not matter. I mean, there's politics and abolishing tariffs and GATT and most favoured nation, all these kind of things that you write about in the book that are very important to the development of globalised free trade. But it wouldn't work if transport wasn't so cheap. You open the book, for example, talking about aeroplanes landing in obscure little airports in the UK jammed with pre-addressed packets from Sheen and Temu and that kind of company to people in the UK.

32:03So cheap to fly stuff around the world that you can now fly a£5 dress from China to the UK and have it delivered. Insane, right? But as we move into our new world of geopolitics, where possibly the oil price will can maybe rise, maybe not. Who knows? It hasn't gotten up nearly as much as people thought it would, but nonetheless, it's hovering a little higher than it was pre-geopolitical difficulties. And at the same time, you have free passage across the seas begins to be impacted or has been for the last couple of years when these things begin to kick in and you find that the price of global transport goes up.

32:41That becomes a bit of a headwind to our underground network, doesn't it?

32:46Ed Conway: I mean, if that happens, that is an enormous deal. In the same way that the slow, mostly invisible reduction in the cost of getting something from this side of the planet to the other is arguably an even greater kind of contributive factor to the world we live in today than the stuff that most people talk about, like tariffs going down and innovation and all the rest of it. It's like the containerisation, bigger ships, freedom of navigation. These are the foundation stones for the modern world and help explain why we think we send stuff routinely off to China to be processed. You know, like all the wool in the world basically goes to China to be processed.

33:27Ed Conway: So if you're shearing wool here in the UK... Oh, God, well, that's been a shock. I have to interrupt you. I had absolutely no idea about the plastic coating on my jumpers. Oh, gosh. I mean I'm sorry listeners this is going to shock you when you get into the textile bit and you find out that your 100 % wool jumper is not 100 % wool. yeah i'm sorry to break that to you i was i it's changed my it's changed my appetite for merino wool jumpers definitely washable merino wool jumpers uh when you're when you are brushing your finger along the surface of your washable 100 supposedly merino wool jumper you are actually touching plastic um and that's because they they're coated with plastic in order to make them machine washable and it's in and you only ever kind of realize these things when you go down into the sausage factory of how, you know, how things are actually made, which is what I've tried to do.

34:20Ed Conway: And that's the case with wool. It's the case with certain types of cotton. Non-iron cotton is actually kind of suffused with formaldehyde. But because, you know, the point of this is to say, the label on your clothing, the label on your packet of fish fingers, the label on your car, it tells you very little about the real story of where those things come from, what was done to them you know on their way to you um and when it comes to clothing then all the label has to say is a where was the final stage of production so where was it cut and sewn maybe that was bangladesh but actually doesn't tell you where the cotton was picked it doesn't tell you where it was spun it doesn't tell you where it was ginned uh which which most of the time is other countries entirely um and then it and then they have to kind of tell you you know uh what it's made of and in the case of wool they can say it's 100 % wool because the fiber is wool and no extra fibers have been added but there is about two percent coating of polymer on top of those follicles of wool that means like I say when you have a machine washable wool jumper or indeed any other item I'm wearing one right now you're making me touch it yeah well it's smoother though Maren It feels great.

35:36Ed Conway: It's got a nice sheen, and that's partly because of the plastic. It's the polymer. Sorry. Sorry to ruin it for you. Ed, what hope? Give me the optimistic version of the next 20 years. There's a lot of hope. For the West, for the UK and Europe in terms of manufacturing and supply chains. Well, I mean, there's a lot of it. I think the thing that I'm struck by, and maybe it's hopeful in a kind of slightly perverse way, but I'm struck when you look at the reality of how trade works. by the resilience of this network of middlemen, I call them, people who want to connect supply and demand. And I went out to the border of Russia and Georgia a while back because I was trying to work out where the sanctions were working.

36:20Ed Conway: And one of the sanctions was to try to stop nice European cars like Porsches and BMWs and Lamborghinis and things to stop even going into Russia. And the statistics basically said, well, they're not going to Russia anymore because the sanctions are there. and all the politicians were like, this is great, sanctions are working, they're so good. But the cars were going into Azerbaijan and to Georgia and to Kyrgyzstan and to all of these other places. And it seemed like that was the end of the story. In reality, of course, as anyone who's got any sense would see from that story, they're going into Russia, it's just they're going in on the sly.

36:54Ed Conway: And so we went and we watched the process of how Land Rovers and Mercedes G-Wagons and all of these different cars, how they are transported across. And there was this quite Byzantine process of getting the car up to the border. One person did that, another person put the plates on it, the transit plates on it, and another person took it across the border into Russia. Another person then picked it up from another place in Russia. And what's been created there is thousands of jobs in this grey market whose entire existence is about this primal force in humankind to try to connect supply on one side of the world with demand on the other.

37:33Ed Conway: And obviously, in this case, we don't like it because it's going against the grain of sanctions. But it is primal. And I think that that doesn't go away. And I think that the fungal network of trade, or whatever you want to call it, the extent to which we are all interwoven with each other, means the stakes are much, much, much greater than in any other point in history. You know, there isn't really a precedent for having a world economy arranged in this way. There's lots of history in this book, but there's no precedent for this. So one hopes that, you know, as people like Donald Trump or indeed other people try and throw trade barriers into the system and realize that they're not working that well, that there's some cognizance that actually that's because the system is far more resilient than you might have thought.

38:22Ed Conway: and that new strands, new webs kind of grow up and sprout up when you try and sunder another one. Well, back to Adam Smith, it's one of the things that makes us human, our constant need to barter and trade, right? And as long as we need to do it, we'll just keep finding a way to do it. Exactly. And I think, yeah, that's really important. Ed, last question. Did any of this, all these trips, all the traveling you've done, the many companies that you've visited, this is great news, by the way, for the world's small cap investors. the more we talk about this kind of thing the more excited they'll be they can go and dig out these small companies and invest in them um did it give you any sense of what your children should study at university golly um well i'm kind of thinking about that like like everyone else because ai is is is the big thing i think you know like there's a lot of people right now making a lot of money through uh crafting beautiful bits of patisserie uh and selling and selling it covered covered in sugar you really enjoyed the bakery chapter in your book didn't you i think it was your favorite i went to paris it was very important for me marion to go to paris to try baguettes all of the delights um so i i i think that having some sort of a skill that is artisan is actually and human and is immediate is probably going to be a safer bet than than most other most other careers at the moment it's it's it's a kind of enlivening time i think right now because i think we're all naturally scratching our chins and asking questions about what we do and i think that's a good thing um because obviously everyone's scared about the ai and then they've got the kind of threats but um i think we we are attuned to to interact and to come up with new crazy ideas and products to sell each other.

40:12Ed Conway: And long may it continue because there won't be a shortage of that in the future. Brilliant. Ed, thank you. Thank you.

40:39John on Twitter or X. I'm at MerinessW and John is John underscore Depec. This episode was hosted by me, Merin Summerset-Webb. It was produced by Samasadi and Moses Andam, sound design by Blake Maples. And special thanks to Ed Conway.

41:09and third as global leaders across business, finance and policy examine the defining trade-offs shaping the future of AI. Thank you to our presenting sponsor, Salesforce, and supporting sponsors, IDA Ireland and Schneider Electric. Learn more at bloomberglive.com slash techlondon.