Strong societies can bounce back from a punch in the face. Consider Iceland. If the run up to the financial crisis of 2008 was a party, Iceland was party central. Four Icelandic banks went on a frenzied international expansion and grew their balance sheets (they bought stuff in the hope that it would go up in value) to ten times the size of the economy. When those banks went bust, they took the whole of Iceland's economy down with them. An epic punch in the face if ever there was one.

They may have been reckless, but Icelandic bankers and their co-workers had brains. When everything crashed, a lot of those brains went home and played video games – it's dark much of the time in Iceland. And then they hit on something. Online gaming is a global industry that requires a lot of computing power. Computing power makes heat. Heat needs to be cooled. So why not stick the servers for online gaming, Bitcoin mining, and a host of other things, in the ground in Iceland (the clue is in the name), and run the show from there? Which is what they did. Iceland had supportive institutions that didn't throw unemployed people under a bus, which allowed them to rethink their options and redeploy their capital.

The financial crisis hurt, to be sure, but given those institutions it also encouraged the growth of a whole new set of ideas and innovations that brought the country “most screwed” by the 2008 crisis back to its feet faster than almost all the others. By 2016, Iceland had fully recovered. Wages were higher than before the crisis, unemployment was low, and consumer confidence was high. Tourism was booming, in part because the crisis a decade earlier had crashed their currency, so it was a cheaper place to visit. Ten years later and the crisis seemed like a bad dream. Icelanders had never had it so good.

It was a different kind of punch in the face when in 2017 waves of angry protests broke out, and in greater numbers and with greater voice than any that had happened in 2008. That anger was triggered by revelations in the so-called “Panama Papers”, which revealed tax dodging on an epic scale by Iceland's political and economic elites.

The parable of the angry folk singer

In the 1970s and 1980s, the British and Irish experienced local terrorism far more intense and frequent than anything the developed world has seen in the past 20 years. The Irish Republican Army (IRA) – a paramilitary organization seeking the unification of Ireland – declared themselves at war with the British state. The IRA killed 125 people in attacks in England, and over 1,500 people in Northern Ireland. Many more were wounded or maimed. Allegiance or opposition to the IRA split many families and neighbourhoods in the Catholic parts of Northern Ireland, and in some parts of the Republic.

Many years after the peace settlement and the IRA agreeing to disband, a denizen of Dublin went back there with a British colleague who loves Irish traditional music. So they went to a pub near St Stephen's Green, where traditional bands always played. In the pub there were maybe 30 or 40 people drinking pints of Guinness and listening intently. Ninety per cent were tourists – Germans, Spaniards and Italians. Maybe more. There were also some lost-looking young women over on a bachelorette weekend, unconvinced by the fiddle, banjo and guitar players. Few locals were to be found in the audience. The band was great. They were playing both ballads and traditional dance music. But the lead singer looked pretty glum.

He had a great voice, but he was miserable. Inspired by a rather sombre number, he then launched, unexpectedly, into an intense political monologue. Although not angry, he was primed for it. Despite the past 20 years of peace, and an extraordinary economic boom in Ireland over that period, he began to talk about martyrs, hunger strikes, the oppressed Irish, and the fact that we “still have to free our country”. And with his spirits lifted by nostalgia for the era of terrorism, he announced that “The next song I’m going to sing is a rebel song …”. His references to past struggles – fictional and actual – against British rule were lost on his audience.

The parable of the three economists

Karl was, if truth be told, more of a historian than an economist. Indeed, deep down inside, he thought that the whole turn of the world in the nineteenth century to market exchange, wage labour, and making everything into a commodity for sale for the sake of profit, was a thoroughly bad idea. His hunch was that labour was unique among commodities in that it was not really a commodity at all. Labour was, after all, like Soylent Green, made of people. And while Soylent Green cares not a jot what it costs, people do. And if the world around them changes in such a way as to make them poorer, through no fault of their own, they will get very angry and demand that the state protect them against these “market forces”. People laughed at Karl. They assured him that markets were as natural as the air we breathe, and provided, as Dr Pangloss promised, “the best of all possible worlds”. And then the world collapsed in the 1930s and people everywhere rebelled against markets.

John was, if truth be told, more a mathematician and a philosopher than an economist, but perhaps that's why he could discern another truth. That supply does not create its own demand because individuals’ decisions to consume and save and invest are separate from each other in time. Once you realize this, recessions and depressions suddenly make sense. If investors get depressed about the future, they will not invest now, which brings about the very outcome they are trying to avoid in the future, a recession. John thought he had found the answer to curing depressions. It's simple really. If your expectations of the future are depressed, all you had to do was spend some cash today to raise the level of prices tomorrow, and investors would start investing again today, anticipating profits ahead. The point of spending was not spending. It was to shift expectations of future profits. But when John's ideas became popular, Mikhał, who came from the same part of the world as Karl, found a flaw in John's logic that echoed Karl's hunch about labour.

The woman out of time

Francesca Salvo is a 78-year old retired academic who lives in London. Her parents migrated to London from Italy in the 1950s. Her father worked as a waiter and his mother as a cleaner. They eventually saved enough money to open an Italian restaurant in north London. Francesca was the brightest of three children. She excelled in mathematics and graduated in computer science from Imperial College in the early 1970s. She married a fellow academic, an English man. When Evan died from lung cancer at the age of 50, Francesca never quite recovered. She never met anyone else. Her two children, and her work, became the focus of her life.

Francesca officially retired 15 years ago but continued to carry out research and teach some courses for postgraduate students. With so much more free time, she decided to buy an apartment in Florence, near where she was born and had spent the first nine years of her life. She was still in touch with cousins and relatives. She loved going back to Florence. She had a passion for art and red wine. Her children would often visit, and she took them on tours of the Uffizi gallery and to see the frescos at the chiesa di Ognissanti. When they had children of their own, she still encouraged them to join her in Florence. There was just about enough room. She took her grandchildren for walks in the Boboli gardens.

As Francesca became older she struggled more and more with her trips to Florence. Instead of going once every couple of months, she went only two or maybe three time a year. Travelling was very tiring. The queues seemed longer at the airport. Maybe it was immigration. Too many people. She couldn't understand why security was so complicated. She would forget to take out her perfume, although sometimes it got through unnoticed. Her son kept telling her to travel light, but she didn't understand. You can't just put everything on your phone. She needed medicines for blood pressure, for cholesterol, and for diabetes. She had been told to take a double dose of vitamin D and vitamin C for her immune system. And she could never find the right ones in Italy.

The parable of the Spanish family who played by the rules

Pedro Garcia graduated in economics from the University of Cadiz in 1998. The Spanish economy was booming, and it didn't take him long to get a job working for a local bank in the mortgage approval department. Soon after graduating, he married his university girlfriend, Valeria. After a year of teacher-training, Valeria got her first job as a schoolteacher in a local school. In 2001, their first child, Anna Maria, was born.

Unsurprisingly, the Spanish housing market was much debated in Pedro's office. Young families like his were struggling to afford to buy properties like those of their parents. Prices had been booming for almost ten years. Some economists were saying there was a bubble. Pedro wasn't sure. He worried about the coastal property boom, but in towns and cities where he and Valeria wanted to live there would always be demand for good properties. Spain was in the European Union and had just joined the euro. Interest rates were lower than ever before, and the euro represented stability relative to Spain's past.

Pedro wanted to take out a big mortgage and buy a three-bedroom apartment in Cadiz, which they could just about afford. Valeria wasn't sure. Wouldn't it be wise to save more and perhaps wait for property prices to calm down? Pedro, and her parents, convinced her otherwise. “He has a good job in the bank, and you are a public employee, with high job security. Take out the mortgage and make a nice home for Anna Maria.” They signed the deal in 2002.

Over the course of the next ten years, their plans fell apart. Pedro and Valeria saw the value of their house collapse. Initially, Pedro held on to his job, protected by Spanish labour laws, but his salary was cut. Despite working in the public sector, Valeria first saw her salary reduced by 30 per cent, and was then made redundant in another round of budget cuts.

In late March 2020, the Covid-19 pandemic pushed the world into lockdown just as the proofs of this book landed on our desks. We immediately wondered, as the pandemic began to unfold, if what we had to say was still of relevance. We are convinced that it is. The key themes of this book are that any society encountering patched-up macroeconomic crashes (like 2008), the ever-increasing daily stressors of an aging society beset with rapid technological change, and rising inequality, was one that would produce an angry anti-system politics. That public anger would manifest itself in legitimate moral outrage and the weaponized energy of tribes. Not only is that still true, it is especially relevant in the current moment.

It may seem that the pandemic has quietened the anger, simply by everyone being told to stay indoors. Even the US presidential campaign seems to have been put on hold. Indeed, opinion polls have found renewed faith in centre parties and in the opinions of (health) experts. Meanwhile, those denying the pandemic or weaponizing it for politics seem to be losing their standing. So far, so good. But given that the underlying stressors we’ve discussed in this book are still there we need to consider how they interact with the actions taken to halt the pandemic. Indeed, with unemployment rocketing up everywhere, that anger, under lockdown for the moment, is likely to come back with some new targets as a result of this crisis.

An early example of this was the anger of Bernie supporters in the US asking why the Federal Reserve can always find a few trillion dollars to support financial markets whenever it's needed, but their asks, for student debt forgiveness and universal healthcare, are always “unaffordable”. Class advantage is in full display in the pandemic as seen in who gets a Covid test, where you can decamp to avoid the virus (Devon in the UK and the Hamptons in the US), and who can work remotely to maintain an income and who cannot. As we move forward under lockdown the wisdom of the immigration restrictions popular with populists will be tested as much needed food for cities lies unpicked in the fields due to a lack of immigrant labour combining with the lockdown.

In 2018 Ernst & Young, the prominent accountancy firm, published a summary of a larger study on the travails of private equity in Africa, titled “From origination to exit, how much value can your capital create?” (see Awadh 2019). In a way, the brief's title espouses a key question that this book has also been concerned with, that of what happens between M and M’? The space “in between” these moments within “the genealogy of capital” (Martin et al. 2008: 122) is not just filled with speculation and the production of “fictitious value”, as frequently claimed in the more critical literature. Many “alternative assets” gain financial worth only if they produce real output and income. Although certain activities of finance are not dependent on generating material things (e.g. the trade of arbitrage), this is not true for capital placements in agricultural ventures, including farmland. For financiers, the value of “land … is a multiple of its expected cash flows” (Elworthy 2012), an assertion that holds also true for businesses-turned-financial-assets further up-and downstream in the agricultural value chain.

This chapter offers a grounded understanding of how institutional landscapes are created. Rather than abstracting from the case studies and risk losing touch with the inner lifeworld of capital (and the processes that occasionally disrupt its reproduction), I present a range of “diagnostic events” (Moore 1987) drawn from Cases 3, 5, 1 and 2. These are a series of thick descriptions, which allow the reader to gain a more intimate understanding of how investors “prepare the ground” for assetization, as well as how the logics of financial value extraction gradually become grounded in particular places. These will be complemented by more cursory insights from the remaining case studies. I will show how, despite being part of particular investment chains and place-specific “asset histories”, each of the cases presented here plugs itself, more or less coherently, into the structures of the private-equity-oriented money management industry, which, in and beyond the “AG investment space”, often operates along similar lines.

In the modern imperial period after the Meiji Restoration in 1868, the Japanese government attempted to develop the economy by promoting the national slogan of “rich nation, strong army”. It was the manifestation of economic nationalism in response to western imperialism. Japan began the process of industrialization with the government leadership in the Meiji era, but later private sectors acquired greater scope of business freedom. However, after Japan suffered from a severe economic depression in the late 1920s, the military government began to intervene in the economy in the early 1930s. Eventually, the Japanese economy was devastated during the Second World War. After Japan's defeat, the United States, which led the Allied Powers, occupied Japan and postwar Japan began its economic reconstruction. The US occupation force implemented several reforms to demilitarize and democratize Japan, including the enactment of a new democratic constitution that proclaimed that sovereign power resides with the people and that renounced war as a sovereign right of the nation. However, its focus moved to the strengthening of Japan as a counter-communism force against a background of the intensification of the Cold War. After achieving independence in 1952, Japan under the Liberal Democratic Party (LDP) attempted to remilitarize Japan by amending a new constitution in the 1950s. However, this aim did not materialize. Since then, Japan focused on economic growth and achieved its “economic miracle” in the 1960s. Despite a slowdown due to the oil crises, the Japanese economy continued to grow in the 1970s and had a frenzied period of growth in the bubble economy in the late 1980s. Since 1955, when the LDP was created, Japan maintained political stability under the political dominance of the LDP (called the “1955 system”) until 1993. This political stability provided a favourable condition for economic growth in postwar Japan.

This chapter will introduce the Japanese economy by beginning with an analysis of the major developments of Japanese capitalism in the prewar era. The chapter will examine government economic policy after the Meiji Restoration, Japan's industrialization with zaibatsu economic conglomerates as an important economic actor, and the war-time planned economy of the 1930s until the end of the Second World War based on the extensive intervention in the economy by the military government.

In 2018 something remarkable happened to Mr and Mrs Scheper, two retired medical doctors from Germany. They had discovered that their retirement provider was co-invested in a fund in South America, whose farming operations had been accused of gross social and environmental misconduct (Schwab 2018). As decades-old supporters of indigenous struggles in Brazil (with personal experience in the field), they were particularly shocked at what seemed to have happened to their retirement savings. This discovery was remarkable, because they got a glimpse of capital's own methods, the transnational circuits of money that evolve from it and the potential local impacts of these flows – a rare moment in the world of distantiated and delegation-based investment chains. Although the case of the fund under scrutiny remains hotly debated, this real-life story returns us to a key concern of this book: to open the black box of finance's role in farming, to engage critically with the institutional landscapes that have emerged from this trend in different historio-geographical settings and to explore how this has affected the structure, management, control and ownership of different agricultural ventures. In pursuing this goal, I have also aimed to fill some gaps that are rarely talked about in the existing debate, such as engaging with the data problem related to the finance-driven land rush, the role of the state as a regulator and potential source of investor information, the layered moral struggles related to the assetization of farming and the question of what role “finance” – broadly defined – can play in achieving more sustainable and just food futures. Well aware that the assetization of farming is more than just about farmland, this book has often reached out to assetization dynamics at the pre-and post-farm-gate stages, and provided the intellectual resources to understand the emergence, operation and internal universe of “agriculture as an alternative asset class” in broader terms. This broader view is also important against the backdrop of more recent dynamics. With the increasing entry of financial investors into the “AG tech” sector in recent years, finance now increasingly touches farming from two sides: the ownership of land and other farm assets, and the technologies used to control and manage production across time and space.

Finance has gone farming. Since the financial and food price crises of 2007/ 8, the world has seen a stark rise in financial investments in farmland and agricultural production by investment banks, sovereign wealth funds, pension funds, private equity funds, insurance companies, family offices, endowment funds and high-net-worth individuals (HNWIs). Indeed, finance has been identified as one of the main drivers of the so-called “global land rush” (Grain 2008; McMichael 2012; Fairbairn 2014; Ouma 2014), in which non-financial entities, such as state-run or parastatal companies or other types of corporate entities, also play a central role. As a result of declining or negative returns on mainstream assets in the wake of the global economic meltdown, a fear of rising levels of inflation caused by counter-cyclical interventions, money printing and quantitative easing in “core countries” such as the United States, low returns on savings and a rise in general distrust in complex financial products, investors searched for new “alternatives” within their “investment universe”. What was suddenly in demand was less “financial engineering” and more “real things”. Farming seemed a perfect match, with parts of the financial industry starting to make a strong case for the sector as an “alternative asset class” that was sustained by a set of strong market fundamentals. A growing world population (passing 7 billion people by the end of 2011); changing dietary preferences towards meat and protein in emerging markets such as China and Indonesia; a rising demand for agrofuels (and carbon sinks) in the light of peak oil and climate change; the limited availability of agricultural land (“peak soil”); and stagnant, or even decreasing, productivity levels in core production regions and climate-change-induced crop failures all seemed to make farming a safe financial bet. The financial industry quickly determined that these factors would shape future demand–supply dynamics along the agri-food chain in crucial ways.

In light of these dynamics, a standard narrative has evolved, which emphasizes that investments in agricultural operations and the underlying farmland should guarantee stable returns on capital invested.

In 2013 I travelled to a large farm comprising several thousand hectares in northern Tanzania that was part of an agriculturally themed fund set up by a leading European bank. After obtaining a local research permit, asking my way around, introducing myself to the relevant authorities and making an appointment with the farm management, my Tanzanian colleague, Mangasini Katundu, and I finally managed to speak to the farm manager and minority shareholder. We had a pleasant chat. Some weeks later I met the asset managers entrusted with the bank's fund management at an investment conference in south-east Asia. Personal contacts helped me forge a link with one senior manager, with whom an interview had been planned after the conference. At the event itself I accidentally bumped into another senior manager of the firm. We also had a pleasant chat, until I mentioned that I had visited the firm's Tanzanian asset a few weeks beforehand. He was not pleased, telling me that I should have asked the company head office for permission. It dawned on me that I had been rather naive. From previous research projects in Ghana and Kenya, I had become accustomed to knocking at farm gates to learn more about what went on there (Ouma 2015a). Getting access to and producing knowledge about farms backed by institutional investors was a different story, however. Whereas, in the past, you could normally carry out research on farms (or agribusiness companies) if the local managers approved, you now needed to get clearance from head offices in London, Singapore and the like. This was not without reason, as the general partners entrusted with managing the farms on behalf of limited partners could be accused of creating undue risk. After all, “financial instruments are … legal contracts” (Knorr-Cetina 2010: 334), so when a third party enters a farm without the consent of the GP/ asset manager, one is in fact interfering with this legal relationship by introducing an element that may put value at risk. With all the controversy surrounding land grabbing in Africa, and the associated risks to reputation, it turned out to be rather difficult to gain access to some of the institutional landscapes in Tanzania and acquire knowledge about them.