If/Then The Hidden Power of Geoeconomics
Feb 19, 2025
Matteo Maggiori, Moghadam Family Professor of Finance at Stanford, dives deep into the world of geoeconomics and financial power. He discusses how the U.S. dollar maintains its dominance, while China seeks alternatives to challenge its supremacy. Maggiori explores historical instances of economic influence driving political decisions, from the Medici's banking strategies to modern U.S.-China tensions. He highlights the complexities of global finance and the need for countries to navigate these financial networks carefully in an increasingly multipolar world.
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Medici Family's Rise
- The Medici family's power originated from their banking investments, particularly after lending to the King of England during the Hundred Years' War.
- When the king defaulted, other banks failed, but the Medici emerged stronger, establishing themselves in key locations and gaining influence through debt.
Financial Power Throughout History
- The concept of leveraging financial dependence for power and influence predates modern banking.
- Paula Finlan highlights that figures like J.P. Morgan saw themselves as modern Medicis, showcasing the historical continuity of this practice.
Geoeconomics and Great Powers
- Geoeconomics, the use of economic strength for political goals, is a defining characteristic of great powers.
- Matteo Maggiore explains how countries use financial and trade linkages to achieve their objectives.