Hidden Forces Thematic Investing in an Age of Global Entropy | Marvin Barth
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Sep 2, 2025 
Marvin Barth, founder of Thematic Markets and former Chief Economist at the U.S. Treasury, dives deep into thematic investing. He discusses the concepts of localization and global entropy, exploring their influence on economic growth and inflation. Barth critiques the pillars of Western power, arguing we've peaked in mythology, economic dominance, and military superiority. He paints a future where the global order may splinter, with emerging economic models challenging Western capitalism. Their conversation highlights shifting geopolitical dynamics and the evolving landscape of finance.
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Technology Drove Modern Globalization
- Globalization post-1980 was driven more by technology than tariffs, enabling complex multinational supply chains.
- The emergence of automation and AI reverses that logic and enables firms to localize production closer to markets.
Robotics Makes Localization Economical
- Advances in robotics and AI make capital a substitute for labor and reduce the need to offshore production.
- That technological shift is the primary driver of localization, not just geopolitics.
Localization Hurt Emerging Markets
- Emerging market growth relied heavily on globalization delivering capital and know-how, boosting total factor productivity.
- Localization reverses that transfer, causing EM underperformance and renewed capital rebuilding in rich countries.
