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  • Viking Economies

    Writer: Teddy Kuser

    Editor: Yubeen Hyun

     

    The year is 793 A.D. Monks at Lindisfarne slip into their familiar routine, bending over parchment to print and paint the Latin Vulgate Bible by hand. It’s a quiet, ordered life—one of prayer, labor, and silence, which they believe lies under God’s protection. The morning haze clears as monastery bells ring across the waves to welcome a hundred Norsemen, none of whom recognize this God, nor fear him. The Vikings approach on sleek, low-slung vessels, the likes of which have never graced the British Isles. Lindisfarne, known as the “Holy Island”, is rich in relics, plates, and pilgrims’ donations, all dedicated to the glory of God—to Viking raiders, all ripe for the taking. Monastic prayers and chants give way to cries as steel meets flesh. Before sunup, the monastery has been stripped of its wealth. The Vikings have their first taste of British blood and riches, and it won’t be their last.

    The familiar image of the Viking is hard to shake: murderous raiders and restless explorers who lined their pockets with stolen silver, bought and sold slaves, and sacked great cities, venturing farther than any Europeans of their age. Their horned helmets may be a myth, but the rest is largely true.

     In Old Norse, viking is the act of raiding or voyaging, while vikingr named those whose job it was to raid (fara í víkingu). But raids were not acts of random savagery; they were calculated. Monasteries and churches dotted the coasts, packed with relics, poorly defended, and easily accessible from sea. Our fearless raiders were also practiced extortionists who preferred profit over bloodshed, often accepting Danegelds and Frankish tributes. 

    A firm that burns and pillages usually burns through its options quickly. So, how did they sustain maritime prowess and continue to expand their global network for over three centuries?

     

    The Pillars of the Viking Economy: 

    Three distinct pillars supported the Viking* economy: hardware, in the form of longships; social software, the “gift economy” used to build credit in a world without banks; and fuel, the silver (dirhams and tribute) that kept the system running.

     

    The Viking Longship: 

    Most nations targeted by Vikings could not fathom a ship versatile enough to cross the North Sea, then row upstream toward cities and towns. The element of surprise was inherent. Vikings designed their ships with long, narrow, clinker-built hulls, sails for open water, and rows for fjords and rivers. At full sail, top speeds reached 10–12 knots and up to 6 under oar. The Vikings’ signature grab-and-go tactic was made possible by longship symmetry, allowing them to sail up and down a river without changing their ship’s direction. Longboats enabled raids from Northumbria (England) to Ireland, down the Seine to Paris, and deep into Slavic river systems, reaching the Volga and Dnieper. Vikings (the Norse, to be exact) are also recognized as the first Europeans to set foot in North America; they established a colony at L’Anse aux Meadows, modern-day Newfoundland, in 1021 CE.

    Building a fleet of longships to transport a Great Heathen Army was no small feat. It is estimated that each 30-meter vessel would have demanded 40,000 hours of labor. From the felling and shaping of timber to the weaving of wool for sails, the Longboat was a community effort, even with an influx of Christian slave labor. Crews, allied clans, and local farmers all had skin in the game, expecting their fair share of future profits. 

     

    The Social Software:

    In early Germanic societies and in poems like Beowulf, the ideal king is a “ring giver,” a ruler whose generosity knows no bounds. In the same vein, silver hoards and troves of relics symbolized a Viking leader’s capacity to reward loyalty. The local economies in most Viking cities were in constant flux—any wealth plundered from the spring or autumn raids was gifted at feasts and assemblies. The Saga of Sweyn Asleifsson perfectly encapsulates the Viking cycle of wealth accumulation and redistribution. Sweyn, a 12th-century Orkney chieftain, observes the sowing of his field each spring before embarking on a raid. In the warmer months, he returns to monitor the harvest before swiftly embarking on a late-summer expedition. Sweyn arrives home in time for the autumn harvest and, with his accumulated riches, prepares for a winter of feasts and song. Joining him in the festivities is the retinue of 80 soldiers he housed in the largest drinking hall on Gairsay, Orkney. Come spring, he exhausts his hoard of silver and is ready to journey west again. 

    The “gift-giving economy” placed enormous weight on social contracts. In one Icelandic saga, Gunnar Hammundarson, a chieftain of renown, and his Norse colony face a devastating famine. Having shown generosity to his neighbors, Gunnar’s own supply is depleted. Desperate, he offers local farmer Otkel Skarfsson coin to buy his stock. Otkel refuses, so Gunnar requests the hay as a gift and offers something far more valuable than silver in return: friendship with a powerful chieftain. Allas, Otkel refused again. Resentment from the encounter festered, and a cycle of feuds ensued that culminated in Otkel’s death. Gunnar’s struggle highlights the tension between an emerging trade economy and the traditional warrior economy, in which exchange served to build prestige. 

    Raiding was speculative, and crewmen risked death for uncertain returns. As a military leader, silver, feasts, and ale were the binding force. However, as Gunnar’s story illustrates, refusing to share one’s wealth breaks the social contract and is met with harsh retribution. So, a raiding expedition was a public good. Behavioral economics proposes the “zero-contribution thesis,” which argues that, in the context of a public good, the Nash equilibrium—the optimal decision for a self-interested, rational decision-maker—is to contribute nothing. Vikings clearly broke this expectation, a tradition that modern Scandinavians have adopted. Norway, Sweden, and Denmark lead the Western world in terms of tax rates and social welfare programs. In this context, the “gift giving” is a commitment to collective success and security, the foundation for some of the strongest economies in the world. Modern Scandinavian countries rank among the highest in quality of life, GDP per capita, and the Human Development Index (HDI). Ancient traditions of wealth redistribution through feasts and silver are mirrored by modern progressive income tax and social welfare programs. 

     

    Raiding Season: 

    Many legends are told of Ragnar Lodbrok. Some claim he led the original raid on Lindisfarne in A.D. 793; to others, he is memorialized for his raids and eventual conquest of the British kingdoms of East Anglia and Northumbria. His greatest exploit by far was the Siege of Paris in A.D. 845. Lodbrok and his sons sailed 120 ships up the Seine, defeated the armies of Charles the Bald, and sacked the ancient city. They walked away with 5,000 pounds of silver Livres. Danegelds came as close as Vikings got to a steady income. Standard economic models, such as those used to calculate GDP, factor in consumption spending, government investment, private investment, and net exports. Oddly enough, ransom is unaccounted for. The Vikings had a unique economic model that relied heavily on biannual capital injections to accommodate their nonexistent savings rate. In a gift economy, if a chieftain cannot spend, loyalty is lost, and the social hierarchy collapses. 

    Viking presence rarely lingered in conquered nations for more than a few decades; another reason the Frankish conquest is considered the Vikings’ greatest. When the Norse departed Paris, Rollo the Walker kept the Viking presence. On his own accord, Rollo negotiated the Treaty of Saint-Clair-sur-Epte. Charles the Simple granted him the lands around Rouen and the lower Seine (now Normandy) in exchange for his loyalty and defense against other Vikings. Here lies the great irony of the Viking era. Although their presence in England was extinguished at last by Edgar the Peaceful around 965, it was the Norse Viking Rollo’s descendant, William the Conqueror, who eventually united the larger part of England under a single banner. 

    The Decline:

    In addition to western raids, the Vikings, particularly the Swedes, often ventured east along the Volga and Dnieper toward the Abbasid and Samanid domains. Ibn Fadlan’s 10th-century travelogue describes encounters with Rus traders on the Volga: tall, heavily armed Northerners who traded slaves and furs and performed ship-burial rituals. An estimated 125 million Samanid dirhams flowed through Viking domains during the 10th century. In these lands, potential victims anticipated an invasion, so Vikings formed a new identity as traders. Furs, ambers, and slaves were all in high demand in Muslim and Byzantine markets. 

    It’s no mystery why this unstable economy eventually collapsed. Still, the particular circumstances are quite revealing of the weaknesses inherent in an economy that lacks self-sufficiency. Vikings became increasingly reliant on the constant influx of Samanid silver, which, in the early 10th century, produced millions of Dirhams. The Vikings met their fate when the relative intensity of mint production plummeted in the mid-10th century. In a numismatic and archaeological study from 2002, Roman K. Kovalev found that, while an average of 318 surviving Samanid coins represent each year of Ahmad ibn Isma’il’s reign (907–914), that number dropped to just 13 per year by the reign of Nuh II (976–997). These figures are of surviving coins. Samanids produced an estimated 1.25 million coins per year at peak production, and by 954, 92.26% of all dirhams ever issued had been struck. The crash floored the Viking economy, particularly that of the Swedes, who collected 62% of all Northern European dirhams during the period.

     

    Mint output of Samarqand per year on average for each Samanid Amir (Kovalev, 2002)

     

    In addition to the economic shock of a declining silver supply from the East, Western kingdoms fortified their defenses to preempt future raids. Bridges and towers rose along the Seine in Francia, while tribute payments from British kings became less frequent owing to Alfred the Great’s military legacy. As the marginal cost of raiding rose and its marginal returns diminished, the “gift economy” just stopped giving. Lacking a well-developed domestic base in agriculture, mining, furs, or timber, the Vikings soon found themselves at the mercy of Christian monarchs.

     

    The Last Stand:

    The defining and fatal moment arrived in 1066, at the famed Battle of Stamford Bridge. In January, the English king, Edward the Confessor, died without an heir, leaving his lands and titles to Harold Godwinson, the powerful Earl of Wessex. Even before Edward’s death, Harold’s relationship with his estranged brother, Tostig, was poisoned by rivalry and resentment. Their feud reached its boiling point when Tostig, seeking revenge for the loss of his Earldom in Northumbria the previous year, forged an alliance with the formidable Norse king Harald Sigurdsson—better known to history as Harald Hardrada, “the hard ruler.” Together, they launched the last great Viking invasion of England.

    In late September, an armada of 300 sleek, low-slung vessels crossed the North Sea. Hadrada and Tostig arrived not as raiders, but as conquerors. The crazed Viking madman, his vengeful English ally, and their 10,000-strong army secured victory at the Battle of Fulford over the allied armies of the new Earl of Northumbria and the Earl of Mercia; they advanced to York and sacked the city. News of Fulford raced south. In London, Harold Godwinson understood the stakes at once: if he hesitated, the North would be lost; if he miscalculated, it would be his crown. In a feat unprecedented in medieval history, Harald forced his army through a grueling four-day, 190-mile march from London to Yorkshire. Men fell from exhaustion, but the column pressed on. 

    Harold’s forces quickly secured York before advancing to the River Derwent. The script flipped, and for once, he had the element of surprise. His exhausted but determined soldiers assembled, staring down a mass of Viking warriors. The speed of Harold’s march left Tostig and Hardrada’s army dumbfounded and unarmored. Aside from the valiant effort of a famed Viking berserker, said to have axed forty Saxon men at the bridge while the rest of Hardrada’s army formed, there was little valor in the slaughter that ensued. Hardrada was struck in the neck by a stray Saxon arrow, and with his death, Viking morale collapsed. The Norse lines broke, and Harold’s men quickly overwhelmed them. What began with a sudden, terrifying massacre at Lindisfarne now reached its violent, decisive end in September 1066, closing the book on centuries of Viking dominance… or so they say. William the Conqueror may not have been a Viking, but Rollo’s blood flowed through his veins, and he and his Great Norman Army were soon on their way. 

     

    *Vikings might have been Danes, Norsemen, Swedes, Icelanders, or members of any number of smaller factions in Scandinavia. For the purposes of this article, I will refer to the Vikings as a collective people.

     

    Featured Image by Steinar Engeland on Unsplash

  • Terms and Conditions: When They Matter and When They Don’t

    Writer: Timothy Jin

    Editor: Bryan Xiao

     

    In a deluge of subheadings and elongated print, every service is now governed by terms and conditions. While paper copies once limited the spread of the tiny text, a pop-up now accompanies every search, website, and purchase. Under the constant bombardment of text, it’s hard for consumers to tell what truly matters. 

     

    Terms and Conditions, also known as Terms of Use and Terms of Service, are legally binding rules, stipulations, and requirements that define the relationship, rights, and obligations between a service provider and user. 

     

    While they are most prominent on the Internet, their origins trace back to the beginning of civilization itself. In Mesopotamia around 2300 B.C., clay tablets represented the earliest written agreements—detailing sales, loans, and employment. Plato recognized the basic categories for cancelling agreements, laborers during the bubonic plague unionized under contract, and the Rock stipulated that he couldn’t lose a fight on-screen. Simply, written agreements have followed the progression of human society. 

     

    However, most everyday interactions with contracts don’t reach the same heights. Most people face a ‘battle of the forms’ while signing up for the latest subscription service or visiting a new website. The constant stream of terms has made it difficult to discern which terms and conditions are truly consequential. 

     

    The truth is—for the most part—very few legal disagreements go to trial: Over 90% to 95% of civil cases, including personal injury and divorce, are resolved out of court through settlements, mediation, or dismissal. In federal criminal cases, roughly 98% end in plea bargains rather than trials. Thus, the majority of terms are never evoked, and most agreements are lost to metadata. 

     

    But hidden amongst all the jargon and loopholes, one clause has real standing. Exculpatory clauses relieve one party from liability for injuries, damages, or negligence caused to the other party during the agreement. In layman’s terms, the clause is a get-out-of-jail card. 

     

    Most commonly found in any strenuous activity, the long forms preluding every roller coaster ride, bungee jump, and CrossFit gym are now a part of everyday life. The tiny text on the back of the parking ticket and the sped-up voice at the end of every ad all seek the same end. 

     

    It’s easy to let the forms blitz by without second thought. After all, what are the chances of flying a roller-coaster? But, taking a step back, it’s important to ask—do the forms really matter, or are they just an easy chance for attorneys to score? 

     

    Tipping the Scale 

    The scary language, more often than not, is just that—scary language. When accidents happen, companies hope that the big notices will convince their customers to assume liability, while the small text does the dirty work of making it harder and harder to resist. In fact, many simply take firms’ word as law. 

     

    Doesn’t sound fair, does it? The short answer is that it isn’t. Because most seek separate avenues to remedy their injuries, firms bank on just that. Courts often refuse to enforce clauses that involve essential services (medical care, housing, or public utilities), gross negligence (reckless or intentional misconduct), and even simply for unclear language and meaning.

     

    For example, the Supreme Court of California addressed the issue in a case close to home. In Tunkl v. Regents of the University of California, the court developed a six-factor test that governs cases related to the public interest—the legal term for essential services. 

     

    The facts were as follows: The University of California at Los Angeles Medical Center admitted Hugo Tunkl as a patient. The center was adjacent to a research program and focused on education in the field of medicine. Unlike a normal hospital, patients were selected and admitted if and only if the study and treatment of their condition would achieve their goals. 

     

    Upon his entry to the hospital, Tunkl signed a document setting forth certain “Conditions of Admission.” Amongst pages of legal text, the crucial sixth condition read: “Release: The hospital is a nonprofit, charitable institution. In consideration of the hospital and allied services to be rendered and the rates charged therefor, the patient or his legal representative agrees to and hereby releases The Regents of the University of California, and the hospital from any and all liability for the negligent or wrongful acts or omissions of its employees, if the hospital has used due care in selecting its employees.” 

     

    In short, the Regents sought to release themselves from any and all legal obligations. Even if the doctors killed Hugo Tunkl themselves, the plain language of the contract would have exempted them from legal repercussions. 

     

    Faced with the absurd nature of the situation, the Supreme Court of California handed a ruling laced in legal prose: “We cannot lightly accept a sought immunity from careless failure…Even if the hospital’s doors are open only to those in a specialized category, the hospital cannot claim isolated immunity.” While the hospital had argued that its unique status as a research facility should afford it additional protections, the court held firm. In short, their ruling affirmed that all hospitals and essential medical services can never be exempt from liability. 

     

    On separate grounds, the court went on to note that “..at the time of signing the release was in great pain, under sedation, and probably unable to read.” Ouch… 

     

    Modern-Day Dilemma 

    While it may be a relief that consumers will never have to understand the terms and conditions in forms at the hospital, the digital age introduces a new frontier. In addition to the abundant agreements for every internet service, the proliferation of mega-corporations introduces a new wrinkle in the complex world of contracts. 

     

    Typically, each form and agreement is limited to its physical parameters. Even in the case of online terms, the language-specific platform is in question. Agreeing to the terms of Amazon shouldn’t waive all rights when shopping at Whole Foods. Or does it? 

     

    A second clause with equally terrifying power is the “mandatory arbitration” clause. Simply, it is a promise that in the event there’s a dispute with the company, the signee agrees in advance to surrender the right to sue and to submit to a neutral third-party decision.

     

    With the lengthy and costly nature of litigation, firms have been quick to adopt the practice. Arbitration case volumes vary based on the provider and industry, but the total number of forced arbitration cases skyrocketed 467% in 2022, and over 280,000 individual cases of mass arbitration were filed with the American Arbitration Association in 2024 alone. 

     

    While having a neutral third-party arbiter sounds like a win for the consumer, the shift to arbitration has major consequences. Win rates for consumers plummeted to just 0.7% in 2022, and mandatory arbitration is, as the name suggests, mandatory. This means that (1) there is no alternative, victims are unable to pursue alternative means such as litigation, and (2) the decisions are without appeal and final, meaning no second chances. 

     

    Moreover, these decisions are private and without the transparency and scrutiny of the courts. While courts heed the “Public Policy Doctrine” (a legal principle allowing courts to invalidate for the public good and morality) and are open to public hearings, arbitration is quieter and without much coverage. 

     

    Testing the Limits 

    With a 99% win rate in arbitration cases, companies have become bolder over time. Kanokporn Tangsuan, a doctor at NYU, suffered a fatal allergic reaction at a Disney World restaurant in 2023. However, the situation was far from blameless. The Walt Disney Company had advertised that the specific restaurant accommodated people with food allergies. The couple had chosen the restaurant specifically for this reason, receiving multiple reassurances from the waiting staff. 

     

    In response, Tangsuan’s husband, Jeffery Piccolo, filed suit against the restaurant and Walt Disney Parks and Resorts. Although the case seemed like a clear-cut example of negligence, Disney swiftly moved to remove the case from court on an arbitration clause. The catch? The couple had signed up for Disney+ nearly four years prior, in 2019. 

     

    In the thousands of words in the user agreement hid a single line: “You,…and Disney+ and/or ESPN+,…agree to resolve, by binding individual arbitration, all Disputes.” Like a nesting doll—in parentheses—hid the phrase “including any related disputes involving The Walt Disney Company or its affiliates.” Meaning a movie night would bind the couple from proper recourse, years after their cancellation. For reference, the current agreement is just short of 10,000 words. 

     

    While Disney ultimately retracted their motion due to negative backlash, the incident raised a host of questions. Is there ever an end to the agreements? Just how much can each company mandate? And, where does one company start and another end? 

     

    Dubbed “Infinite Arbitration,” both state and national legislatures have yet to fully grapple with the new era of online contracts and interconnection. Unlike the classic case of arbitration, these overly broad contractual provisions exist in perpetuity. Some even go as far as to include unrelated future interactions with a company or its affiliates.

     

    However, the sudden shift is not all impending doom, as of January 1, 2026, Californians are now exempt. Senate Bill 82 limited the scope of infinite arbitration. In fact, eight other states have taken other approaches against infinite arbitration, including a creative application of a statute of limitations to arbitration clauses. 

     

    The bill aims to turn back the clock and return arbitration to its historical roots. “For example, a consumer agrees to arbitration when joining a gym. If the gym’s van later hits the consumer in a grocery store parking lot, SB 82 may prevent the gym from using the membership agreement to force the personal injury claim into arbitration.” Simply, arbitration is tied to the interaction, not the person. 

     

    Yet, the problem remains on the federal level. The Federal Arbitration Act, the main act governing arbitration in the United States, makes no mention of infinite arbitration nor its legality, leaving the question for individual states to solve, leaving millions in a coverage gap. 

     

    If there is a lesson in the fine print, it’s a modest one. While most of the terms and conditions are moot, a few matter a great deal.

     

    Graphic by: Narayani Agarwal

     

    Featured Image by Scott Graham on Unsplash

  • The Rise and Fall of the YA Dystopia Genre

    Writer: Saniya Pendharkar

    Editor: Claire Fitzgerald

     

    Introduction 

    For a brief moment, YA dystopia ruled the cultural landscape. It began with a spark: a teenage girl volunteering to die on national television, and suddenly, a generation of readers couldn’t get enough. Rebellion was glamorous and romantic, survival was thrilling and heroic. Teenagers lined up for books and movies with heart-pounding anticipation, they made fan art and theories that flooded forums, and turned casual reading into a full-fledged social community. 

     

    By the 2000s, these stories had evolved into something bigger, more intense, and impossible to ignore. From The Hunger Games to Divergent, a formula of rebellious teens in oppressive societies experiencing forbidden romance captivated millions of adolescents. But beneath the glittering success lay a fragile structure: franchises were overproduced, plots recycled, and audiences—once ravenous—began to fade. For a fleeting era, YA dystopia burned bright, inspiring generations before quietly fizzling, leaving behind a blueprint for both cultural triumph and inevitable decline.

     

    YA dystopia was not by any means a new genre in the 2000s. In fact, works like Lord of the Flies by William Golding and The Giver by Lois Lowry were published before the turn of the century and were considered groundbreaking pieces of literature in the 80s and 90s (despite the former being published in 1954). They remain a staple in English classrooms today. However, the YA dystopia of the 2000s focused more on intense world-building and was incredibly action-driven, with the same formulaic arcs of rebellion and romance. Yet, it was these defining characteristics that contributed to the enormous popularity of the “modern” YA dystopia genre for nearly fifteen years. 

     

    From Page to Platform: The Boom of the Dystopia 

    The rise of the YA dystopian genre was more than just misunderstood teenagers captivated by immersive storytelling, but rather, a perfectly timed demand surge. As Millennials reached adolescence in the 2000s, publishers had just begun to offer scalable series designed for franchise expansion. When these series were striking movie deals across Hollywood in the 2010s, Gen Z was just entering its teenage years and remained captivated by the rebellious plots, boosting the popularity further. 

     

    Teenage girls and young women were the primary consumers of this “modern” YA dystopia genre. They quickly proved to be a demand base that was incredibly reliable from a commercial standpoint and extremely emotionally invested in the character arcs. It wasn’t just a youth market that ignited the modern YA dystopian boom, but a loyal cross-generation female readership. While young male audiences often gravitate towards standalone genre fiction and platform-based media, young women purchase a disproportionate amount of fiction and tend to have a stronger commitment to serialized narratives and recurring characters. This pattern of sustained engagement cemented the trilogy as the infallible structure characterizing modern dystopian YA. 

     

    The trilogy quickly became the dominant economic unit of this era. Multi-book arcs increased lifetime customer value, and from a publishing perspective, they reduced market uncertainty. Since readers are more likely to emotionally invest in the first book, a trilogy creates three purchasing opportunities for the consumer. Once readers emotionally invest in the first book, the next books benefit from locked-in demand. As a result, weaker sequels still performed well commercially, even when consumers openly recognized that books two and three were not as strong as the first. It’s no wonder there’s a trend of readers feeling that the first book in a series was the best. This model meant that per-customer revenue multiplied, leading to higher expected returns per reader and reducing the need to find new consumers, justifying larger marketing budgets. However, it wasn’t just the dedicated female audience and the trilogy structure that propelled YA dystopia to its height. Together, they fueled modern YA’s secret weapon: the fandom.

     

    Time gaps between the release of consecutive installments in a series fueled massive amounts of online discourse. Between 2012 and 2017, roughly fifteen popular YA books had been turned into major motion pictures, flooding the media with dystopian narratives and reintroducing older novels to Gen Z’ers just entering their teens. But it wasn’t just large-scale marketing campaigns and attractive actors that fueled demand; this surge in film adaptations occurred at precisely the same time Tumblr (peaking 2012-2014), Pinterest (2011-2012), and Reddit (explosive growth from 2010-2012) reached the height of their cultural influence. Every cliffhanger sent fans online to speculate plot twists, discuss characters, and turn waiting into a mutual anticipation. These digital platforms were basically marketing engines where fans did most of the promotional work themselves. Fan art, GIFs, trailer analysis, rumors, and so much more were circulating at a pace no studio advertising budget could replicate. The fandom culture had essentially intensified the genre’s network and created a bandwagon effect that strengthened them. 

     

    The Imitation Spiral 

    The first domino to fall was none other than Suzanne Collins’ The Hunger Games. The plot follows sixteen-year-old Katniss Everdeen, a teenager who volunteers to take her sister’s place in a brutal televised fight to the death, defying the oppressive Capitol’s control. Within the first 18 months of its release, The Hunger Games had sold more than 800,000 copies. By the time of the film’s release in 2012, over 26 million copies of the entire trilogy were in print, and to date, over 100 million copies of the entire series have been sold worldwide. The success was not limited to the book, however. The first film, The Hunger Games (2012), grossed almost $700 million despite its $78 million budget. In the following year, the sequel, Catching Fire (2013), grossed just over $900 million worldwide on a $130 million budget and became the fifth highest-grossing film of 2013. Currently, the entire film franchise has grossed just over $3 billion, cementing itself as one of the highest-grossing YA film franchises of all time. The Hunger Games quickly became a teenage phenomenon, and in its success, studios saw a replicable formula: a teenage hero, an oppressive government, a stratified society, and a passionate romance threaded through it all. What followed next was not an organic growth, but an industry-wide imitation spiral where studios rushed to copy the template and reproduce its massive success. 

     

    In the film frenzy following The Hunger Games, studios scoured the YA shelves looking for the next big hit. Film rights to series like The Maze Runner, Divergent, The Giver, and Ender’s Game were quickly acquired and fast-tracked into production. Expecting the same success as The Hunger Games, studios greenlit sequels before the first movies were even released, and approved enormous marketing budgets before actually observing concrete success. However, despite the large number of narratives picked up, the formula behind each of these storylines remained the same. Rather than crafting original plots and characters, studios resorted to an industrialized storytelling model that relied on predicted engagement.

     

    Practically every new movie had the same old plot: a teenager who doesn’t conform (yawn), an evil government system (again?), a romantic sidequest (seriously?), all followed by a rebellion where your favorite supporting character dies (lame!). It was fresh when Katniss Everdeen did it. After all, The Hunger Games generated over 3 million unique discussions on online forums in 2012, and Katniss was the #1 Halloween costume for girls and young women that same year. In late 2013 and 2014, Hollywood tried to broaden the genre’s audience by slightly altering the formula and bringing classic male protagonists to the big screen. The film Ender’s Game (2013), based on Orson Scott Card’s 1983 novel, followed child-prodigy Ender as he trains to defend Earth from an alien enemy. The film incorporated more typical science fiction themes, such as galactic battles and alien armadas, while notably avoiding any romantic arcs. In 2014, The Giver, written in 1993 by Lois Lowry, followed Jonas, a teenager chosen to learn the truths of the past in an emotionless society. The story is much slower,  more philosophical, and involves a much more subtle and tender theme of attraction. Despite the popularity of the novels, both of these films were box office blunders and encouraged studios to stick with action-driven rebellion narratives and heavy romantic subplots. 

     

    The Fall of a Franchise 

    Aside from The Hunger Games, Divergent and The Maze Runner are considered the heaviest-hitters when discussing the YA dystopia genre boom. Even so, these two franchises were not able to keep the genre afloat. In The Maze Runner, written by James Dashner in 2009, teenager Thomas leads a group of boys through a deadly maze controlled by a secret organization. The first two movies, released in 2014 and 2015, were considered successful, grossing just under $700 million globally. However, the second film earned less than the first despite having nearly double the budget. The total trilogy grossed almost $1 billion, but the third installment was delayed due to the lead actor being severely injured. It was not released until 2018—well after the end of the dystopian era. The Divergent Series was the third, but weakest pillar of the genre, and it was the collapse of this pillar that brought the entire genre crashing down. 

     

    The first book in the series was written by Veronica Roth in 2011 and hit theaters in 2014—an incredibly fast book-to-screen transition. The story presented an oppressive society divided into personality-based  “factions” and centered on Tris Prior, a teenager who doesn’t fit into just one. The first film, Divergent (2014), grossed about $280 million on an $85 million budget, classifying it as a profitable venture and a strong launch for the franchise. However, of the three major franchises, Divergent had the highest budget, but grossed the least. The second film, Insurgent (2015), became the highest-grossing film in the series but was hammered by critics and audiences for completely abandoning the plots from the original books and pursuing unoriginal storytelling. Additionally, the high production costs meant that the studio just barely broke even. Even still, it was the third movie, Allegiant (2016), that was the final nail in the coffin. Grossing less than $180 million on a $110-$130 budget (before market costs), it was a total failure.  

     

    Allegiant (2016), by all accounts, sucked. Original characters were sacked and replaced with flat ones, entire storylines were deleted, and the romantic arcs were overly central and incredibly frustrating. On top of that, the studio tried to mimic The Hunger Games’ strategy of splitting the final book into two films—but instead of building anticipation, it left what little plot there was feeling incomplete. The film was such a disappointment that the studio officially canceled the planned fourth film, and the entire franchise was left unfinished. Franchises had been cancelled before. The limited success of Ender’s Game (2013) saw the studio erase any plans for a sequel, but Divergent was different. Divergent was a heavily invested franchise with sequels and spin-offs planned from the start, and when it failed, it didn’t just cancel a film; it revealed that the genre could no longer reliably convert book popularity into sustained film demand, effectively delivering the final blow to YA dystopia.

     

    2016 marks the official end of YA dystopia as the wild, unstoppable craze that once obsessed generations of teens. Trying to peel away from the YA dystopia genre while still maintaining their teenage audience, studios jumped into teen sci-fi, but it came too soon. The popular The 5th Wave franchise, written by Rick Yancy in 2013, hit screens in 2016. It didn’t have a special teenager in an oppressive government, nor a central love trope, but rather a very straightforward alien invasion. Regardless, it seemed like audiences wanted nothing more to do with teenage heroes, and the movie flopped. Similarly, the YA sci-fi fantasy series, Maximum Ride, made its on-screen debut in August 2016 and was once again slammed for being something “You’ve seen…before, and done a lot better.” Hollywood and audiences alike were done with the teenage-led YA dystopia and anything remotely related, and thus, the genre of YA dystopia ended not with a crash, but a whimper. 

     

    Conclusion

    The YA dystopia genre burned bright and burned fast, fueled by fandom, franchises, and a single formula; it seemed unstoppable. The Hunger Games showed what was possible, and for a while, every studio was chasing the same success. But nothing lasts forever, and with sequels losing money, critics blasting unoriginal plots, and Alligiant’s disastrous performance, the message was clear: the once gripping era of teenage rebellion had come to an end.    

     

    As that era faded, Hollywood began testing the waters beyond teen-targeted dystopia. Movies like Ready Player One (2018)—also based on a popular teen book—showed that moving away from the “YA teen” marketing label and emphasizing adventurous, visually spectacular storytelling can be successful in the post-YA dystopia age. Economically, it’s a shift from front-loaded hype and formulaic replication to a focus on sustainable engagement across demographics. The age of the YA dystopian juggernaut was over, and no formula, no matter how explosive, could survive the weight of its own popularity. Fandom alone could no longer sustain interest, and overproduction revealed just how fragile the genre’s foundations had become. While the craze may have fizzled, the lessons remain: demand can soar quickly, but without innovation and care, even the most explosive trends are destined to fade.

     

    Featured Image by Tom Hermans on Unsplash

  • Communicating Climate Change

    Writer: Richard Li

    Editor: David Han

     

    Once again, the tides have undeniably turned against climate change action. Take, for example, the dissolution of the Net-Zero Banking Alliance, the rise of private-sector “greenhushing,” the United States’ withdrawal from the Paris Climate Accords, or Canada’s repeal of the consumer carbon tax. While some point fingers at President Trump and the role of conservative legislators in the undoing of pro-climate institutions and initiatives, Stanford University-led research cites a “global movement opposing climate policies,” that has emerged since the past three decades in response to pro-environmental government policies. This focus on “reactionary cultural dynamics” differs from arguments concerning think tanks and corporate actors from the fossil fuel industry that support a “counter climate change” movement aiming to infiltrate public opinion. 

     

    The Paris Agreement, often revered as the pinnacle of international climate cooperation, focuses on the “ends” rather than the “means.” In other words, it states the desired outcome of reducing global warming to 2ºC (preferably 1.5ºC) above pre-industrial levels by the end of the century, while leaving it up to governments to set their “nationally determined contributions.” The lack of a standardized means to achieve this goal exemplifies the weak agreements some view as a consequence of consensus diplomacy. 

     

    This lack of guidance, though understandable, is problematic in two clear ways. First, with few apples-to-apples comparisons between countries’ efforts, it is difficult to hold parties accountable. For example, countries have used different baseline years and attached custom conditions, such as “excluding international aviation,” to their targets. Second, public perception fixates on highly abstracted golden numbers, namely “1.5” and “2.0” degrees Celsius. A perfectly reasonable question, like “Where does this come from?”, leads to a trove of articles designed for the lay audience that, while accessible, are unconvincing. They contain appeals to authority, including mentions of how Greta Thunberg, Leonardo DiCaprio, and United Nations Secretary General António Guterres have advocated for the 1.5ºC target. They leave the justification of 1.5ºC to phrases like “climate scientists agree,” framing the target as scientific dogma and relying on the reader’s faith in a distant authority. In particular, more in-depth explainers disclose the continuous nature of climate targets: the idea that, similar to the rationales for speed limits or COVID-19’s six-feet apart rule, “keeping at 1.4 is better than 1.5, and 1.3 is better than 1.4, and so on.” Other valuable categories of articles and reports reveal more specific real-world consequences, such as that “2ºC of warming equates to the loss of 99% of coral reefs down the line,” or that meeting 1.5ºC could “halve the sea level rise from melting land ice” by 2100.

     

    However, this information is not reaching its target audience. Instead, people hear about the $1.4 trillion of economic damage caused by natural disasters in 2024, or other numbers too large to trigger emotional reactions. This apathy is compounded by the abstract nature of climate targets in general. A global increase of 1.5 or 2.0 degrees Celsius sounds negligible compared to the double-digit temperature swings within a single afternoon. Because these figures don’t elicit a sense of urgency, combined with the most severe consequences of climate inaction appearing distant, standard scientific messaging typically emphasizes these higher-magnitude, long-term threats and neglects the opportunity to communicate tangible, short-term harms. 

     

    Graphic By: Juwariyah Qazi

     

    In a recent study published by the National Bureau of Economic Research, researchers ​​Kimberly Clausing, Christopher Knittel, and Catherine Wolfram aimed to subvert these norms of climate communication by focusing on immediate household-level impacts. Their research reveals that American households are already paying an annual expense of $400 to $900 for climate change, , not driven by average temperatures creeping up, but by extreme weather events inflating insurance premiums, medical bills, and taxpayer-funded disaster repair. 

     

    Furthermore, these costs are regressive, as insurance and medical costs make up a larger proportion of lower-income household expenses. This burden is largest in disaster-prone regions, where annual costs can exceed $1,300 per household—not even accounting for the mounting cases of insurance non-renewals and underinsurance. While the authors acknowledge that “the chief concerns about climate change lie in the future,” their findings demonstrate that inaction already forms a major economic grievance, albeit perhaps a less visible one. 

     

    Yale University’s Program on Climate Change Communication published that 87% of Americans don’t deny that global warming is happening. That being said, only 44% of Americans believe people in the U.S. are being harmed “right now” by global warming. This lack of urgency makes it convenient to pit personal financial hardship against a costly and seemingly altruistic endeavor like the carbon tax. 

     

    For instance, in 2024, 47% of Canadians surveyed agreed that the price on pollution was a big reason why costs had risen so much. Without studies such as Clausing and colleagues’, household-level costs are difficult to attribute to climate change. With its focus on existing household-level costs, the tangible numbers produced by this study may be a powerful antidote to climate apathy. Rather than hammering the gargantuan and distant future costs of climate change, a more effective method of swaying public opinion could be to demonstrate how it is already draining household finances, reframing climate action from an issue of altruism into one of personal economic importance. 

     

    Featured Image by Saira on Unsplash

  • From Cigarettes to Screens: The Economics of Addiction 

    Writer: Mallory Rettig

    Editor: Calista Peta

     

    Cigarette addiction is a seemingly old-fashioned danger. The infamous rise and fall of the cigarette industry is burned into many minds, yet its reign feels like the distant past. Restrictions and regulations are in place to protect the public from multi-billion dollar addiction-profiting companies like the tobacco industry—but what if an entire industry managed to slip through the cracks? The rising social media industry is replicating the past cigarette industry’s framework, profiting from addiction by blaming overuse on consumers and marketing to children. 

     

    The Rational Addiction Theory, developed by economists Gary Becker and Kevin Murphy (1988), describes the idea that addicts are in control of their substance abuse because they must have considered the future consequences and regardless still elect to use. It frames addiction as a process—one in which the addict essentially consents to their addiction. Unsurprisingly, this theory was great for the cigarette industry. If their customers knew of the consequences and could stop at any time, what basis did the government have to intervene? 

     

    Camel, the first major commercial cigarette brand, was started in 1913. From that point on, advertisements were strategically created to target the largest possible audience, using doctor and celebrity endorsements for credibility and even marketing to children to ensure lasting customers. However, this lucrative industry built on addiction began to crumble. It all started with the 1928 study by Herbert L. Lombard and Carl R. Doerring, two Massachusetts State Department of Health researchers who found associations between heavy smoking and mouth cancer. From then on, the cigarette industry faced one of the most powerful exposés of all time; study after study proved the danger of inhaling the exact products that big cigarette companies engineered to increase revenue.  As a last attempt to curb government intervention, in 1994, executives of the most powerful U.S. tobacco companies swore in a legal testimony that nicotine was not addictive and denied increasing nicotine levels in cigarettes. In 2009, the Family Smoking Prevention and Tobacco Control Act was passed, allowing the FDA to place regulations on the manufacture, distribution, and marketing of tobacco products. The Tobacco Control Act shaped the standards around cigarettes that are commonly accepted today, such as no underage consumption, free giveaways, or sponsorship of sports or other cultural events. And, eventually, the cigarette industry went from being seemingly innocent to government-regulated. 

     

    Graphic By: Narayani Agarwal

     

    Now, a similar phenomenon has entered the world of addiction: social media. The framing of social media overuse as a lack of discipline and thus completely voluntary, as is consistent with the Rational Addiction Theory, encourages a new generation of young adults and children to form a new addiction at its own cost. From Instagram Reels to YouTube Shorts, social media is free to use. Yet there is still a price to pay, one that might even be considered more valuable than money: time. And as a result, the dependence that an entire generation of teens and young children is developing has somehow gone unnoticed. The monetary aspect of social media is not in the sale of a product, but rather equated to the amount of time that a platform can compel users to spend on their site. Free from taxes and largely unregulated, this has become a race to addiction: which company can get people to spend most of their lives on its app? In the cycle of exposing and regulating addictive products (demonstrated here by cigarettes), the understanding of addiction gets lost. Social media has long been characterized as addictive, but since it is a behavior and not a chemical substance, its effects are often not taken seriously. This is worrisome: how can people consent to an addiction if they aren’t aware that what they are engaging with is addictive? 

     

    Even more concerning, the optimal target demographic for social media companies is members of society whose brains have not yet fully developed: children. A concept first recognized by cigarette companies when they discovered that if they could get young people addicted to their product, there was more revenue to be made over time. As a result, cigarette advertisements began to target young people. This is also important to social media companies; however, brain plasticity is an even bigger factor. Brain plasticity allows children to learn and adapt more quickly, making them more vulnerable to developing addictive habits. The brain can take in new information and change itself at unparalleled speed. If social media companies can get their audience adapted and reliant on their product (essentially creating addictions), it would mean engagement patterns that may persist for years. And that is exactly what has been accomplished. 

     

    The difference between the cycle of cigarette abuse and social media addiction is in the regulations. In 1998, once the government recognized how damaging inhaling nicotine was to a person’s health, advertisements targeting children and teens were deemed immoral and ultimately banned by the Master Settlement Agreement (MSA). But what about the negative cognitive effects of social media? There are no true restrictions on social media for young children, which leaves a whole generation dealing with an addiction masked under the guise of the Rational Addiction Theory.

     

    For cigarettes, the negative externalities eventually became clear. Secondhand smoke, discomfort in enclosed spaces, and public health risks were enough to change policy inside most establishments and beyond. The government placed more taxes on cigarette companies and looked for other ways to decrease the demand of the product and optimize the marginal social cost curve. But for social media, the negative externalities are not as clear. There is a decline in productivity and motivation in younger generations that, if unaddressed, will certainly not be in society’s best interest. Studies show that the average teenager spends 7 hours and 22 minutes on their phones a day, not including time spent on productive work. This amounts to roughly 112 days a year, and roughly 24 years throughout an average lifetime (78.4 in the U.S.) spent on content that rarely contributes to the growth of society, even marginally. There is also intense political polarization and misinformation intentionally engineered to draw in engagement. Instagram doesn’t care about your political views; it cares about the time you spend scrolling and the money you make for their company, which are both increased when there is shocking and often disagreeable content. It does not matter to big companies that misinformation is dangerous and is currently causing a chaotic political climate, so long as it makes a sizable profit.

     

    They’re doing it again. Big companies are once more profiting from addiction—it’s just that this time, people don’t realize it, and the government has no real way of regulating it without breaching privacy laws. Society has faced this dilemma once before with cigarettes, and only after decades did meaningful regulations emerge. Will social media follow the same path? And if it does, how long until policymakers demand action?

     

    Featured Image by Andres Siimon on Unsplash

  • The “Humanistic” Ideal: Antiquity in Capitalism

    Writer: Jason Shin

    Editor: Andre Zaretskiy

     

    “I presume, without my telling you, you know that Homer, being the wisest of mankind, has touched upon nearly every human topic in his poems. Whosoever among you, therefore, would fain be skilled in economy, or oratory, or strategy; whose ambition it is to be like Achilles, or Ajax, Nestor, or Odysseus—one and all pay court to me, for I have all this knowledge at my fingers’ ends.”

    – Niceratus, Xenophon’s Symposium 4.5

     

    From Ancient Greece to Nike: An Introduction

    A glance at UC Berkeley’s Wheeler Hall reveals what appears to be a tribute to Ancient Greek architecture. Tall Ionic columns surround the building, while next to the sculpture of Benjamin Ide Wheeler, a large stone epitaph inscribed in ancient Greek text describes his accomplishments and legacies. Similarly, visible from the front entrance of UC Berkeley’s Doe Library or Dwinelle Hall are sculptures of Homer and Hermes, friezes from the Parthenon, and more aspects of ancient Greek culture. 

    It doesn’t take much to notice a tendency to romanticize the ancients. 

    In fact, out of modern media’s many historical inspirations, ancient Greece and Rome often sit at the forefront of our minds when we think of discipline, elegance, or themes regarding fundamentalism. This isn’t limited to social media, either. Top corporations such as Starbucks, Versace, Pandora, Nike, Hermes, and Maserati owe their entire design to Greek and Roman themes, while Burberry, Coca-Cola, and Geico have incorporated these influences in their marketing. 

    However, there is nothing fundamentally wrong with romanticizing the ancients. After all, the Greeks were the basis for most of Western civilization, if not all of Western intellectual thought. Our understanding of philosophy, math, and education could not be where it is today without ancient Greek thinkers. Our founding fathers drafted the Constitution and the Declaration of Independence with direct inspiration from ancient Athens and the Roman Republic. 

    It is understandable then that such views, when conveyed in advertisements and marketing, tend to transmit similar ideas of credibility, strength, and aesthetics. Even this article begins with a quote from one of the few surviving dialogues with Socrates, where a man named Niceratus claims that Homer has touched upon nearly every human topic possible and proudly asserts that he always relies on his works for guidance on anything from economics and virtue to even how one should drink wine. Clearly, the ancient Greeks were also romanticized by the ancient Greeks. 

    But to what extent is our romanticization of the ancient Greeks and Romans as the “perfect ideal” legitimate? How much of our marketing and perception of the ancients, as reflections of our culture, actually determines the choices we make as consumers? Would Niceratus be more inclined to pay for tablets and lessons on Homer, just as the Romans in Pompeii spent fortunes decorating their houses with mosaics of Greek myths, and much like how we, as products of our history, are prone to subscribe to motivational content online  because of its austere “Roman” background? More broadly, how is antiquity generally represented in our society, and what does it do to us as consumers? 

     

    Classical Reception in Modern Branding  

    Classical reception in modern branding often relies on the assumption of a few psychological truths; most notably, the powers of archetypes, iconography, and nostalgia marketing. Archetypes in this article are referred to as general themes stemming from the stories of mythology. These can be innately fundamental, such as love (stories of Aphrodite or Cupid, for instance), or strength (think Zeus or Hercules), but they can also be hyper-specific, such as themes of pleasure (Dionysus, etc). Understanding that such themes are broadly recognized by the general public, marketers often utilize such themes in advertisements to align their general message. 

    Iconography refers to our tendency to worship cultural “icons,” while nostalgia marketing is a technique used to evoke admiration from the consumer through the appeal of the past. These themes often overlap, but can sometimes be distinct in their particular message.

     

    I. Versace as a Case Study: The Gaze of Medusa

    Versace is a prime example of archetypal use. A direct inspiration from the myth of Medusa, Versace’s logo actually reveals a lot about the changing perceptions of the famed Gorgon in both archaeology and mythology. Originally, Medusa was a hideous creature who turned people to stone upon sight. Our earliest portrayals draw her as terrifying and almost beast-like. As time passed, however, she became a figure of dangerous enticement, a creature whose beauty fatally tempts the eyes of any passerby.  Founder Gianni Versace claims to have built his fashion empire upon that particular sentiment: a familiar sense of dangerous enticement for his products. 


    This trend is reflected in all of Versace’s products. Its brand designs are consistently bold and glamorous, while drawings of the “Greek Key” (the famous meander pattern in many ancient Greek artworks) are used as a decorative motif that keeps the brand philosophy alive. In this case, classical themes are utilized to aid brand image. Economically speaking, brands such as Versace have proven to be successful not only because of Medusa’s existing popular appeal, but also because of its clear narrative execution: everybody knows about the myth of Medusa. 

     

     

    II. Nike as a Case Study: Victory Embodied

    Nike can be seen both as an example of archetypes and iconography. Its “Greek” presence remains minor, except for in name, which was inspired by Nike, the Greek goddess of victory. Here, though the archetypal narrative may convey a concept of victory and competition, its historical iconography stands out more. In Greek mythology, Nike is the goddess of victory, specifically victory in athletic competition. She represents speed and strength, being a divine charioteer and a companion to the other Gods. The brand’s “swoosh” logo is an ingenious abstraction of the goddess’s famous wings, which in turn, can represent a simple design that conveys motion and speed. 

    A prime example of strategic storytelling in marketing, Nike distinguishes itself from Versace in that it elaborates upon a pre-existing myth to create its brand, whereas Versace is built upon a myth as a foundation rather than using it as a tool for creative interpretation. 

     

    Graphic By: Meredith Whitcher

     

    Conclusion 

    In summary, Greek and Roman mythology are most notably seen in marketing two ways:  a foundation for an entire market and brand identity, or a source of creative abstractions. Both directions, as seen from Versace and Nike, have extremely different outcomes. Nike focuses more on integration than Versace, and therefore may benefit from adding their own creative interpretations to their products. Whereas Versace, as a luxury brand, prioritizes maintaining an ideal of opulence and “myth,” rather than finding ways to break into more colloquial markets. 

     

    Featured Image by Hans Reniers from Unsplash

  • The Passive Paradox: Market Impacts of Structural Vulnerability to Common Ownership

    Writer: Aditya Gupta

    Editor: Hwan Choi

     

    The Free Rider Problem

    For the past fifty years, financial markets have relied upon a hidden engine called “price discovery.” In economics, prices are a public good, meaning they are costly to develop (in terms of research, analysis, and discussion), but anyone can utilize them. This public good has historically been supported by active managers—the hedge funds and stock-pickers who pay the costs of figuring out what a particular company is really worth.

    Passive investors function as free riders in this model. Since passive investors believe the current market price is the true value, they will purchase all the available stocks within a particular basket, receiving the benefits of the market, without having to support the research that generated those prices. So long as the number of passive investors remains a minority of the total participants in the markets, the system functions properly. However, as passive investors represent an increasing share of market participation, the incentive structure underlying information production weakens. The Grossman-Stiglitz Paradox suggests that if markets were perfectly informationally efficient, investors would have little incentive to gather costly information, implying that prices may fail to fully reflect underlying fundamentals. We are currently testing the limits of this paradox in real time.

    The data in Figure 1 illustrates a historic crossroads that occurred in early 2024. For the first time in history, passive assets under management (AUM) in the U.S. mutual fund industry exceeded active AUM. This historical milestone represents a significant turning point in the way that the incentive structure of the markets operates. Although the golden age of active management included many average stock pickers, their cumulative efforts produced the friction needed to maintain prices consistent with a company’s intrinsic value. Now that the passengers have taken control of the wheel from the drivers, the engine of price discovery is starting to sputter.

     

    (Figure 1, Source: Morningstar Direct, 2024)

     

    The Oligopoly: The Illusion of Competition

    The transition to passive investing has resulted in a radical transformation in the industrial organization of the American economy. The “Big Three” institutional asset managers—BlackRock, Vanguard, and State Street—are now the single largest shareholders in nearly 90 percent of the S&P 500 companies. This high degree of concentration results in a unique distortion in how these firms compete. In a typical market, competing firms are like rival sports teams. Each team aggressively reduces prices and increases capacity to win market share from other teams. However, this competitive dynamic depends upon the assumption that each team has different owners. That assumption is no longer valid today.
    An excellent example of this concept is the airline industry. The Big Three asset managers collectively own 20–22% of United, Delta, and American Airlines.

     

     

    Under such conditions, a price war becomes economically irrational. For instance, if United Airlines reduces ticket prices to take business away from Delta and/or American Airlines, it may slightly increase the value of United’s shares. However, reducing ticket prices would severely damage the profit margins of both Delta and American—shares that also sit within the portfolios of the Big Three asset managers. For a common owner, reducing ticket prices would be equivalent to moving money from one pocket into another, while paying the costs associated with a price war to accomplish that transfer.

    As such, the management teams of airlines operate in a world where their largest shareholders have a preference for maintaining stable profits across sectors rather than engaging in aggressive competition. While this does not require back-room deals, collusions, etc., it creates an environment where the dominant strategy of competing firms is “soft competition”—maintaining higher prices and limiting capacity growth in order to avoid a fight among owners. Antitrust regulators are just beginning to understand this new reality. Recently, the U.S. Department of Justice raised concerns about the common ownership structures established by these large asset managers as potential antitrust violations.

     

    The Death of Price Discovery: Signal Decay

    Instead of making investment decisions based on the quality of a company’s fundamentals, investors make them based on predetermined rules that do not consider the quality of the company. For example, an index fund will automatically purchase the top stocks of an index regardless of whether those companies are fundamentally good investments. When capital flows into a stock due to index inclusion, price movements may reflect mechanical demand rather than firm-specific fundamentals. The index fund buying the stock creates noise in the market that masks the true value of the stock. 

    The inclusion of Tesla into the S&P 500 in December 2020 offers a clear example of this distortion.

     

    (Source: Macrotrends)

     

    Tesla’s stock price (as illustrated in the first graph above) rose sharply compared to the company’s actual earnings performance. Tesla’s Price-to-Earnings (P/E) ratio increased to over 1000 times the earnings per share (as illustrated in the third graph above). 

    While Tesla’s growth story has been fueling the company’s stock price appreciation, its inclusion in the S&P 500 index greatly amplified its demand. Trillions of dollars in passive funds were forced to buy the stock immediately to minimize tracking error. When large, price-insensitive buyers enter the market, demand increases, as the market ceases to weigh the firm and instead simply weighs the money being used to purchase the stock.

     

    Liquidity Mismatch: The “Burry” Warning

    Beyond price distortion, this shift creates a structural vulnerability in liquidity transformation. ETFs provide investors with the ability to get in and out of positions instantly, while providing liquidity throughout the day. The problem is that the underlying securities that back these ETFs are often illiquid. This means that if investors were to synchronize their redemption of securities, there would not be enough buyers to purchase them.

    This structure creates a dangerous illusion. As investors like Michael Burry have warned, the mechanism that keeps ETF prices accurate relies entirely on a functioning underlying market. Active managers have historically acted as a shock-absorbing function for passive investors, by purchasing underpriced assets and holding them until the price returned to equilibrium with the rest of the market. However, as active capital continues to decline, this stabilizing force will continue to disappear.

    While this does not mean that a collapse is inevitable, it does mean that the market is vulnerable to state-contingent fragility. When everyone wants to sell at the same time, the “exit door” of the ETF is typically much larger than the “exit door” of the underlying stocks. If the two cannot meet, a liquidity vacuum forms and a violent re-pricing of risk occurs.

     

    The Tragedy of the Commons

    Indexing still makes sense for the individual investor. It remains a low-cost, efficient way to invest, and generally provides better results than most active investment strategies. However, when it comes to the entire system, this mass migration of capital to passively managed accounts represents a classic tragedy of the commons. What is individually rational for each investor is collectively irrational. We have experienced 40 years of a bull market that has been sustained by the efficiency of active price discovery—a public good that we have consumed without contributing to its preservation. As we enter a new era characterized by passive flows, this efficiency will begin to break down. Centralized governance is becoming more common among a concentration of firms, and prices will increasingly reflect the flows of liquidity rather than the intrinsic values of the underlying securities. 

    This results in the major question facing economists in the coming decade: Will a market capable of sending accurate price discovery signals exist when the majority of its participants are structurally unresponsive to price?

     

    Featured Image by Nicholas Cappello on Unsplash

  • Guyana’s Gilded Cage

    Writer: Aditya Gupta

    Editor: Philip Wegerhoff

     

    A historic oil boom has catapulted Guyana into a political storm about a one-sided contract and an economic crisis caused by a large influx of new oil wealth.

     

    At the start of 2015, Guyana was one of the poorest countries in South America. Today, it is the world’s fastest-growing economy. The dramatic turnaround in fortune for Guyana is the result of the Stabroek Block, a 6.6 million-acre area of ocean bottom located off the coast of Guyana that holds approximately 11 billion barrels of high-quality crude oil. However, this once-in-a-generation opportunity for Guyana is currently being controlled by a 2016 Production Sharing Agreement (PSA) with terms so beneficial to foreign oil companies as to create two different worlds: a goldmine for investors and a possible gilded cage for the nation.

     

    Confirmation of Value

    Chevron’s purchase of Hess Corporation for $53 Billion in July 2025 confirmed the corporate value of the 2016 PSA. As well as acquiring Hess’s 30% interest in the Stabroek project, the purchase also reaffirmed the two major problems facing Guyana: the level of public discontent regarding the terms of the previous agreement, and the rapid and substantial amount of money that would soon flood the economy of Guyana.

     

    For the next few years, the Guyanese government will have to balance public discontent with respect to the previous contract with the economic shock wave that is coming.

     

    The Corporate Windfall

    The terms of the 2016 PSA created such a unique investment opportunity that it altered market behavior. Hess, the junior partner, became the primary vehicle for “the Guyana Premium.” Hess’s stock (HES) far surpassed both the S&P 500 and ExxonMobil (XOM), Hess’s senior partner, whose large global portfolio diluted the effect of the project.

     

    This was not a bubble. It was driven by the very strong financial returns from the Stabroek Block’s low production costs of  $25-$35 per barrel. In 2024, Hess’s net income rose nearly 100 percent to $2.77 billion, compared to $1.38 billion in 2023. Its return on capital employed (ROCE) from its Guyana operations was almost 69%. The Guyana premium was generated solely by the favorable terms of the contract and the expansion of the asset itself, and not by changes in oil prices alone: even when Brent crude prices were low, HES stock increased in value.

     

    Anatomy of a One-Sided Deal

    Both the corporate windfall and Guyana’s political problems are directly traceable to the 2016 PSA. This contract, entered into by a caretaker government prior to the full extent of the discovery being realized, deviates considerably from international norms through the inclusion of several problematic terms: a meager 2% royalty rate; a cost recovery cap of 75%; and a tax provision that forces the Guyanese government to pay the income taxes of the oil consortium from its own share of the profits.

     

    Perhaps most importantly, the PSA does not include a “ring fencing” provision, which allows the consortium to use profits from the highest producing fields to cover exploration and development costs throughout the entire basin. Therefore, the “cost bank” that must be repaid by the Guyanese government before it can earn a meaningful profit share is constantly expanding.

     

    The waterfall chart below illustrates the revenue produced from each barrel of oil sold at $82. While the final “profit” bars appear to represent a fair 50/50 split, they do not. The consortium takes the greatest share, $60.30, for cost recovery. In addition to the cost recovery, the consortium takes its profit share, for a total of $70.31. The remaining amount available to the Government of Guyana, a 2% royalty and profit share, totals only $11.69.

     

    The Political Consequences of Inequitable Contract Terms

    The unfair terms of the 2016 PSA have caused a serious political problem. The fact that the public knows about the PSA is largely due to criticism by chartered accountants such as Christopher Ram, who have made the fiscal terms of the agreement major news items. The local press and opposition parties have labeled the 2016 PSA as a “Heist of Guyana.” As a result, the Guyanese government finds itself in a difficult situation. The government is constrained by a very strong, binding stability clause in the PSA and therefore cannot easily renegotiate the terms of the agreement without facing serious potential penalties under international law. At the same time, the government cannot simply ignore the national outcry of the public.

     

    In order to address this challenge, the government has employed a two-pronged strategy: first, to continue to uphold the legally binding terms of the 2016 PSA, and second, to begin working towards securing more equitable terms of the agreement for Guyana’s future. The government has accomplished this through legal reform, including passing the 2021 Local Content Act that requires all contractors to hire an increasing percentage of Guyanese workers, and by creating a new model PSA that provides higher royalties and taxes to the Guyanese government. The government’s ability to address this issue pragmatically was further evidenced by their re-election in 2025 with a significant margin, indicating that voters were supportive of focusing on new opportunities instead of continuing to debate past decisions.

     

    The Risk of a Resource Curse

    However, the challenge remains enormous. Stabroek’s large size ensures that, regardless of whether or not the terms of the PSA are weak, a large amount of money will be transferred to Guyana as a result of oil production, and this could lead to the resource curse, i.e., the phenomenon where a rapid increase in natural resources can ultimately harm a nation’s long-term prosperity.

     

    The biggest threat to Guyana is the massive influx of foreign exchange that will occur as a result of oil sales. If left unchecked, this influx of foreign exchange could cause “Dutch Disease,” the strengthening of the local currency, which makes Guyana’s traditional agricultural products less competitive, and could potentially cause runaway inflation. The government’s best defense against this threat is the Natural Resource Fund (NRF), a sovereign wealth fund, which was designed to hold the excess foreign currency earned from oil sales outside of Guyana’s economy so that it does not contribute to Dutch Disease and lead to other negative impacts on the local economy.

     

    Graphic By: Noam Tal

     

    Using data from Hess’ investor filings and price forecasts from the United States Energy Information Administration (U.S.E.I.A.), a forward-looking financial model of Guyana’s Natural Resource Fund (NRF) indicates that the fund’s balance will exceed $50 billion within ten years. To put this into context, Guyana’s entire Gross Domestic Product (GDP) in 2019 was approximately $5 billion. A windfall of this magnitude would present a substantial challenge to any developing nation. Although the government has specifically created the NRF to mitigate the negative impacts of such a large inflow of foreign exchange, the speed of the windfall still creates the classic problem of how to absorb large amounts of wealth in a short period of time without succumbing to the negative impacts associated with that wealth.

     

    Unlocking the Gilded Cage

    Guyana stands at a crossroads. For the oil companies involved in the Stabroek development, the Stabroek bet has clearly been a financially rewarding gamble. However, for the people of Guyana, the real work of creating a prosperous future for themselves and their children is just beginning. The oil companies have acquired their golden ticket; now Guyana must discover the key to unlocking its own gilded cage.

     

    Featured Image by Zbynek Burival on Unsplash

  • The Olympics: Big Dreams, Bigger Bills

    Writer: Jason Luo

    Editor: David Han

     

    Billions in cash; arenas springing up seemingly everywhere; the global spotlight shining for weeks on end. To many cities, snagging the Olympics feels like winning life’s lottery. Olympic supporters rave about paychecks and visitors flocking in, and leaders pose with oversized scissors, ready to cut tape—folks at home hear promises that their city will never be forgotten. But the trouble is, once runners leave and smoke clears from flares, one thought lingers: was it worth it?

     

    The City as the Client: Expectations VS Reality

    The way cities go after the Olympics is like chasing a big contract, hoping to attract tourists, create jobs, or get noticed worldwide. Even if the benefits seem nice, officials mostly care about what they can actually measure, not just wishful talk. Sometimes, cities have landed the Games by tossing out cheerful, if stretched, figures on cash flow and employment. Think Salt Lake in 2002 or London twelve years later. Lowball cost guesses and big job promises mattered more for votes than accuracy. But once plans roll out, spending tends to blow up fast, showing how steep the real tab is.

     

    The Price Tag Nobody Wants to Talk About

    Since 1960, every single Olympics has exceeded projected costs. In fact, no Olympics have stayed within budget. The average cost overrun is about 172%. It’s not a small amount; it’s a financial sinkhole. When cities bid to be an Olympic host city, they’re usually looking at building a shiny new stadium. However, when the bidding process is complete, the city is left to deal with the bill for decades of debt payments. For example, Montreal did not pay off its 1976 Olympics until 2006, and that was after paying debt for 30 years for just two weeks of the Olympics. In a recent study on the cost of holding Olympic Games conducted by researchers at Oxford, they concluded that there is such a consistent pattern of cost overruns that the overruns become part of the DNA of the Games. 

     

    The amount of money spent above budget on the Olympics is enormous. The 2008 Olympics held in Beijing had an estimated cost overrun of over $40 Billion. Due to the COVID-19 pandemic, the 2020 Olympics were delayed to 2021 and still had a cost overrun of approximately 128%, with associated expenses adding billions to the already existing costs for the city. The costs that are normally included in the overall cost of the Olympics (such as the large amounts of money that will need to be spent to upgrade the city’s transportation system, and/or urban renewal, and/or provide new security systems) can range from $5 billion to over $50 billion. Even if cities implement all of the proposed reforms and build sustainable venues and/or temporary venues and/or reduce the size of the budget and/or implement other cost-saving measures, the trend does not appear to be changing.

     

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    Short Sugar Highs: The Crowding-Out Effect

    Indeed, there is much hype around the Games. Research suggests that each year an Olympics is hosted, regional GDP slightly increases, along with other regional economic indicators, by a couple of percent. For example, hotel rooms are filled, contractors are hired to build venues, and then people come in to watch the events. However, how do these events translate into long-term economic gains?

     

    Typically, post-Games analysis indicates that the projected wage hikes and tourism increases do not occur consistently. The economic boom seen immediately before the games is usually offset, or “crowded out” by the high cost of attending, the large numbers of visitors, and the disruptions caused by increased security measures at airports, etc. In essence, the Olympic Games replace one type of visitor (the high-spending, long-stay tourist) with another (the low-spending, short-stay Olympic fan), resulting in little to no positive impact on local tourism. Additionally, although temporary construction jobs are created, research has indicated, i.e., a study concerning the 2002 Olympic Games in Salt Lake City, that the number of new permanent jobs created is typically only a small fraction of those projected, and many of the temporary positions are given to already employed workers instead of unemployed ones. Thus, after the games have concluded and the torch has been extinguished, the host city is left with the financial burden of hosting the games, and the promised sustainable economic benefits have evaporated; the “sugar rush” has passed.

     

    Image Source (y-axis: total number of international tourists (millions); positive = more visitors than expected; negative = fewer visitors than expected)

     

    The Legacy Mirage: Outliers and Social Cost

    There is generally significant hype surrounding “legacy” from Cities during the bidding process for the Olympics. New Parks! Affordable Housing! Improved Public Transportation! There is no question that sometimes legacy is just a nice way to say white elephant. It has been nearly two decades since the Athens 2004 Summer Olympics, and yet the city still has some old, rusted venues. Similarly, many of the stadiums built in Rio de Janeiro remain empty. The Bird’s Nest Stadium in Beijing costs approximately $10 million per year to maintain, with little to no use.

     

    While the construction process of the Olympics is short-lived, the maintenance is forever. While there may be instances where cities are able to successfully repurpose or reuse the existing infrastructure, the social costs of hosting the Olympics are almost always extreme and irreversible. Historically, the Games have been used by governments to further gentrify and displace people. Before the 1988 Seoul Olympics, an estimated 720,000 people were displaced from their homes. Recently, Rio de Janeiro saw thousands of families displaced from favelas to make room for new roads and Olympic-related infrastructure. These cases illustrate how often the Olympics benefit the wealthy developers and construction companies rather than the vulnerable population of the city. 

     

    While there are exceptions, such as the revitalization of the East End area in London from the 2012 Olympics and Los Angeles’ relatively inexpensive 1984 Olympics (which utilized college dormitories as the Olympic Village), these are rare cases rather than the norm. Los Angeles was able to succeed in 1984 because they reused existing infrastructure, a practice that is rarely done when the Olympic Games are hosted today.

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    Who Actually Wins?

    There are a few major issues with how the Olympics cost cities money. Even when the Olympics are losing money for the city, someone has to be making money. Host cities paid large amounts to construction companies that built the venues. Then there are the developers who are paid huge sums of money for land they owned before the Olympics arrived. Plus, all the media outlets and all the sponsors—the Olympics are a cash cow for them.

     

    The International Olympic Committee (IOC) also makes billions of dollars from broadcasting the Olympics. They keep most of those millions and give some of them back to countries around the world so they can help fund other sports projects, but none of the money goes to the city that hosted the Olympics to help cover the cost of building everything. Cities have to use their own tax dollars to build the venues, provide security, and create an efficient transportation system for the Olympics, while the IOC gets rich off of advertising. In a scenario where revenues for the 2016 Rio Games totaled less than $9 billion, a substantial portion was kept by the IOC, leaving Rio to shoulder its billions in debt.

     

    It seems like, usually, the people who lose are the citizens of the city that hosted the Olympics, either through years of higher taxes, or the government taking over their neighborhoods with “Olympic Zones,” or gentrification as they are priced out of their own communities. Ultimately, the problem is that Olympic development, and the way cities plan for the Olympics, are primarily driven by a city wanting to gain prestige and a short-term economic stimulus caused by the construction process, rather than being based on long-term market viability.

     

    Graphic By: Meredith Whitcher

     

    So… Should a City Host?

    Unless you’re able to build the majority of your city’s needed infrastructure, put in place tight, ironclad financial control systems, and can present a detailed, legally binding plan that protects residents from displacement as a result of hosting an Olympics, the chances of achieving some level of economic success for your city are low. The burden of proof needs to be reversed; rather than having the cities that wish to host the Olympic movement prove they are financially prudent and socially responsible, we should be requiring them to do so.

     

    It’s possible. Los Angeles, with its 2028 bid, has proposed a “no new stadiums, no new debt” model as part of its bid, directly mimicking what made its 1984 success work. If Los Angeles’ model works, it could also create a shift in how bidding committees approach costs, focusing on operational costs instead of capital costs.

     

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    But for now, history is clear: hosting the Olympics is usually a bad investment for the local community. So the next time a mayor boasts about bringing the Games home, instead of taking in the sugar surge, maybe one should ask: who’s really winning here? The answer is rarely the local taxpayer.

     

    Featured Image by Julio Hernández on Unsplash

  • When Nations Bet the House

    Writer: Varun Venkatesh

    Editor: Sean Lu

     

    Casinos are havens of chance and greed—but in Southeast Asia, they have transformed into tools of governance. “Casino diplomacy” is an emerging practice of using gambling economies as mechanisms of geopolitical posturing. Conceptually, foreign funds and influence travel in and out of countries through casino zones, creating cycles of dependency between nations and the providers of their capital. Indeed, this theory has found itself manifesting in Cambodia, Laos, and the Philippines, whose economic futures rely on the profitability of gambling zones and the hope of external investment and tourism. Unfortunately, behind the glow of neon lights lies a significantly darker reality: a fragile market and weak institutions dependent on vice and foreign leverage. 

     

    In 2024, the gambling industry across Southeast Asian countries reached a market valuation of $3.48 billion. Analysts projected its expansion at a compound annual growth rate (CAGR) of 5.24% through 2033. However, regardless of the growth of casino revenues, government decisions and legal oversight on the casino markets have nearly come to a standstill. As such, it is reasonable to argue that the expansion of casino zones is a shared regional pattern. Countries are betting on an industry, one with maximum risk and uncertain returns.

     

    Cambodia, Laos, and the Philippines are playing the same game, but each country has different stakes. Cambodia’s hand holds a set of problems: dependence on China and the relinquishing of control over economic growth. In parallel, Laos has gone all-in on debt diplomacy by sacrificing its autonomy over policy decisions, calling for Beijing’s subsidization of its markets. The Philippines is raising a different game plan, reaping harvests from skyrocketing turnover, while permitting corruption to plague its government. Politicians from all three countries are content with the illusion of prosperity. Unfortunately, this leaves their constituents waiting patiently for the cards of proper economic reform and opportunity to be dealt. 

     

    This reality is especially clear in Sihanoukville, a port city in Cambodia that was once labeled the future growth capital of the country. Instead, it has become a city run by an entirely different nation. In 2019, more than 90% of local businesses were Chinese-run, and almost 70% of Cambodia’s foreign direct investment (FDI) came directly from Beijing. Profits circulate outwards when another country controls the businesses that local consumers interact with. Economic theorists label these sorts of cases “enclave economics”: high-value, profitable economic activity controlled by foreigners with little to no spillover into domestic industries or human capital.

     

    Laos’s experience has been very similar to Cambodia’s; only, rather than receiving direct investment in the form of relief, the country has fallen into a pit of debt nearly impossible to return from. Indeed, nearly $644 million has been sunk into casino zones, which the government has argued would plug gaps in its fiscal system and boost tourism rates. However, the capital that the country used to fund its casinos came from China, which already holds more than 120% of Laos’s GDP in external debt. As such, casino diplomacy, at least from the Chinese perspective, is just another form of their debt-trap diplomacy. Beijing supplies the money, the contractors, and the clientele, while Laos simply provides the land and political approval. This reality has manifested, with gambling zones like the Golden Triangle Special Economic Zone (SEZ) near Boten operating with limited state oversight over the past few years, which blurs the lines between any sort of national sovereignty and the extraction of resources by a foreign actor. 

     

    A more complicated story is being told in the Philippines. On paper, recent growth looks like an absolute success. In fact, casinos generated ₱350 billion ($6 billion) in revenue in just 2024, and online gambling alone generated nearly ₱115 billion within just the first half of 2025. On top of that, these numbers have bolstered foreign interest in the Philippines economy, suggesting an economic model that, unlike those of Cambodia and Laos, appears to be successfully working. But beneath this surface lies something extremely fragile. Money laundering has become prevalent, with regulators already investigating nearly $19 million being laundered through casinos in vast corruption schemes. There is a structural concern to consider here: the state’s growing reliance on “easy rents” from gambling has weakened incentives to bolster long-term sectors such as clean and sustainable industries, public education, and even innovation. Therefore, when governments like the Philippines become dependent on non-productive rents, they become significantly less accountable to citizens and considerably more prone to corruption and dependency. The Philippines’ $6 billion funding of new casino projects further risks institutionalizing this problem.

     

    The problems the Philippines, Laos, and Cambodia are facing stand in stark contrast to the success of Singapore’s casino zones. There, casinos can operate within a transparent and tightly regulated framework, and the economy is highly diversified, reducing reliance on casinos as primary drivers of growth. This complementary model allows for gambling capital to coexist with development; in much of Southeast Asia, it substitutes for it. 

     

    The fundamental problem with economic development led by casinos is that it mimics the mechanics of gambling itself. Casinos can profit because the house always wins. However, when the house is owned by foreign investors, elites, politicians, and capital networks in Beijing, the nation fails by design. The economic logic of casino-led growth collapses on three fronts. 

     

    The first is the volatility and fiscal risk that gambling allows. Casino revenues are highly cyclical, entirely dependent on the existence of peaking tourism and large quantities of subsidies. For example, when COVID-19 hit the Philippines, gaming revenues dove by over 50% in just the first three months of 2020. Decades ago, Albert Hirschman, a German development economist, developed the theory of unbalanced growth: sectors with solid forward and backward linkages are prerequisites for development that is stable and profitable in the long term. Sadly, casinos provide neither. 

     

    The second flaw is institutional corrosion. Regulators in a casino-based economy become financially and politically involved with the industries that they oversee. In Cambodia, that means law enforcement agencies are implicated in several financial scams within casino SEZs. In the Philippines, money-laundering scandals have become a recurring story, prompting urgent reform calls from the Anti-Money Laundering Council. Across Southeast Asia, indicators of corruption control declined to near disappearance in the years when casino investment surged.

     

    The third and most problematic weakness lies in external leverage. Countries lose their bargaining power when all aspects of their economy are housed elsewhere. In both Cambodia and Laos, gambling zones are just offshore liquidity sinks for the elites in Beijing, allowing for Beijing to informally control entire regions and permitting absurd rates of capital flight. More that 45% of Cambodia’s and 69% of Laos’s casino-linked SEZ investment originated from Chinese sources. These economies are already embedded within the capital networks of the Belt and Road Initiative. China has transformed its subsidies and “aid” into soft coercion, using the economic reliance of Southeast Asian countries on it as instruments of power projection and posturing. 

     

    When it’s all said and done, casino-led growth is self-defeating. It ties the fiscal stability of a country to the most volatile and corruptible industry. It strengthens foreign leverage over domestic decision-making and policy. It corrodes the institutions necessary for long-term economic, political, and social development. 

     

    Graphic By: Riddhi Das

     

    Yet that does not mean that all is lost. These governments still possess the agency to cash out of the casino trap. 

     

    The first step towards doing so is to treat gambling as a transitional source of revenue rather than the primary one. The primary concern of casino-dependent nations is losing a basis of income. However, taxing casino inflows and outflows permits the development of other industries and leads to better economic outcomes. Funding education systems helps build human capital, sponsoring infrastructure projects ensures the facilitation of people and commerce, and creating innovation hubs full of domestically-controlled businesses moves countries up the value chain. Just a fraction of annual casino tax revenue being redirected toward the expansion of productive industries could yield gains far greater than the possible, not even guaranteed, short-term benefits from gambling.

     

    Secondly, building regulatory bodies independent from the industry is critical. Conflicts of interest are inevitable when the Philippine Amusement and Gaming Corporation in the Philippines acts as both operator and overseer of casino zones. There needs to be a regulatory distance between state oversight and the gambling industries. Transparency and citizen oversight could be ways to reinforce this protective action. Otherwise, these countries are simply inviting the threat of corruption internally, which creates disastrous outcomes for the people of the nation. 

     

    Last but not least, countries must reduce their dependence on foreign investment from just one country. Southeast Asia is not without leverage. Other stakeholders—Japan, South Korea, the EU, India, Indonesia, and many other countries—are eager to discuss and sign onto partnerships in various angles of development. Broader FDI portfolios allow host nations to possess increased bargaining power in trade commerce, and more importantly, minimize the risk of geopolitical capture to near zero. The road to economic independence is strenuous, but it is the only way these countries can pave the path to genuine sovereignty and autonomy. 

     

    In our geopolitical and macroeconomic environment, just as in poker, the power belongs not to those who hold the cards, but to the one who owns the table. As long as casino-dependent economies allow others to own the capital, set the rules, and extract the winnings, the odds will remain stacked against them. Thus, true sovereignty will only begin when nations stop betting on chance and start investing in themselves.

     

    Featured Image by Kvnga on Unsplash