Okay, we're live. Hi, this is William Ramsey. Welcome to William Ramsey Investigates On today's show. I have a very special guest. Her name is Kimberly k Hwong. Her last name is spelled hoa Ng, and she just published a book September sixth, twenty twenty two. Title of the book is Spiderweb Capitalism, How global elites exploit frontier markets. And we were talking kind of in the pre show I
just had Hal Weizman on last month. We talked about all the kind of subterranean, maybe sketchy things involved in Delawar's kind of corporate environment. But I think this book fits in is a great kind of follow on to that discussion because it's about some dealings that maybe not as well known to the public. But this is not
Kimberly's first book. She also published back in twenty fourteen a book titled Human Trafficking Reconsidered, Rethinking the Problem, Envisioning New Solutions, and also in twenty fifteen, dealing in Desire Asian Ascended Western Decline and the Hidden Currencies of Global Sex Work. And Kimberly Wang is a She is an Associate professor of sociology at the College of the University of Chicago. She's the author of the books that I
just mentioned. She's also had articles that have appeared in American Sociological Review, Social Problems, Gender and Society Contexts, the Journal of Contemporary Ethnography and Sexualities, as well as articles for the BBC. And her homepage or her website is her full name, So it's Kimberlykwong dot com and I'll put that in the show notes, as long as their Twitter handle. So if you have any questions about the book or any follow on questions, you can reach out
to it Kimberly Kwong. But again, the book we're going to talk about today, just published September sixth, twenty twenty two, is Spiderweb Capitalism, How Global Elites exploit frontier market. So, Kimberly Kwong, welcome to the show.
Thank you so much for having me.
So for people who may not have heard your name or your earlier work, can can you talk about your background and your academic career and what led you to write and put together this book Spider Web Capitalism.
Sure, so, I'm a sociologist by training. I received my PhD in twenty eleven from UC Berkeley Sociology Program. And you know, I think the story of spider web capitalism emerged in somewhat of an organic way from my first
book monograph book, Dealing in Desire. The first book, Dealing in Desire is a book about the sex industry in Vietnam, and it's a story about how the sex industry facilitates foreign direct investment into the country, particularly FDI coming in from other more developed nations in East and Southeast Asia, so South Korea, Hong Kong, Singapore, China, Taiwan, Malaysia, et cetera,
et cetera. And it was a time of the two thousand in anate financial crisis, and the story is really about how foreign investment was coming primarily from East and Southeast as Asian nations with a very Asian style of deal brokering that was on the basis of trust and a handshake, and in a context where you know, legal contracts were not as didn't have much teeth to them, or where the legal structure wasn't you know, very sophisticated, and whether it's widespread corruption and so that book was
published in twenty fifteen, and there were some questions that were unanswered in that book because I was doing an ethnography. I was an ethnography for doing an ethnography inside of hostess bars, and so I was really curious, you know, what happens outside of hostess bars, and more curious how you know, Western businessmen who are constrained by the Foreign Corrupt Practices Act do business differently in this context than businessmen, say from South Korea or China, who are not constrained
by the same global laws around corruption. So, you know, it starts with a very simple story. I go to Vietnam and Me and Mars the two sites that I'm really interested in studying, Me and Mar being an even newer frontier that people were sort of chasing after at the time when Angsan Suki was elected, you know, into
office at that time. And so I kind of go there and I'm doing some interviews and I realized that, oh, my goodness, you know, all of these investments are managed offshore, and they're managed through offshore vehicles that are set up in Hong Kong and Singapore, and so I start to ask for the contact information of lawyers, company secretaries, accountants, bankers, all of the people that are managing these investment vehicles offshore, and I go to Hong Kong and Singapore and carry
out some of the inner us and I realized that those are just subsidiaries of other entities based in the British Virgin Islands, say Shells, Panama, et cetera, et cetera.
And so I kind of stumble into the story of spider web capitalism, which is a story of offshoring, and it's a story of how these investments are They never go direct from from nation A to Nation B, but instead are entangled in this three D web capital web, where there are a ton of different financial professionals who helped to move money around the world through these different offshore vehicles.
Right, and you break that down into two different kind of there's really the chairman and the other ones, the h n M s and the U h n wis. Can you explain those acronyms?
Sure? So, you know, when I started to do this book as a sociologist, there was a time when sociologists were really interested and I think economists too, in the study of elites, and when in the study of elites, and this is you know, post two thousand and eight, everyone was looking at the one percenters of the you
know one percent versus ninety nine percent. And what I realized is that actually many of the people that I study are part of the one percent, but we don't differentiate, and there's a big difference between the you know one percent and the point one percent, for example. And so the way that I sort of theorized spider web capitalism is that it's these webs are social webs, and so there I kind of take an analogy of social spiders.
They build out these massive webs together in community. But what I do is I differentiate between what I call big spiders and smaller spiders. So the big spiders are ultra high net worth individuals, and the smaller spiders are the high net worth individuals who sort of manage the investments or manage the money on behalf of the ultra
high net worth individuals. So high net worth individuals are basically highly compensated financial professionals who kind of carry out the footwork and the investments on behalf of the ultra high networth individuals who are often invisible in these complex webs. And the high net worth individuals are the people who are often the fall people and in the face of the deal when something goes wrong, right.
So you have this kind of breaking up. So the kind of lowered people are like the manager's fund managers, accountants, lawyers, bankers, and they actually have fixers too, So there's kind of this people facilitating the investment into these frontier markets.
Correct.
Yes, yes, And you kind of you had concerns about the foreign corrupt while you were investigating all this material to spiderweb capitalism. You had some bird concerns about the FCPA too, right, you had to get that trub Can you talk a little bit about that?
Yeah, So as an American researcher, I learned that I could not so as and particularly as an ethnographer, I think I really love how Whitesman's book who you mentioned, What's the matter with Delaware? And I think I just will say, you know, how Whitesman's method of research is very different from mine, and that he's looking at court cases, newspaper articles, you know, interviewing people and putting the pieces
of the puzzle together. Most of what I do is interviewing people in ethnography, which is following people around to try to see them in action, and most ethnography as a method has been used to study down. It's used to study you know, sex workers, like I did for my first book, gang Members, like many people do coming out of the Chicago School of Sociology, you know, and it's not really been used very much to study elites
or to study up as we call it. But what I ran into was that per the Foreign Crept Practices Act, I could not witness any you know, people carrying out bribes or any of these transactions in person. I couldn't really look at the multiple books that people had for their accounting, because that technically would make me an accessory
of criminal activity. And so the way that I sort of got around that was that I would follow people and travel with people, but I wouldn't necessarily sit in with them on the meetings, but I would I would have breakfast and drinks with you know, breakfast beforehand, coffee afterwards, drinks afterwards, and try to get them to fill me
in on what was happening inside. And oftentimes, when you travel with people, you spend a lot of time with people, you build trust, and they let their guard down and they are much more open to kind of what's happening with these transactions. What are some of the complicated things going on, and so I was you know, if I was not a US researcher, I don't think I would be constrained in the same ways as US and VEST were.
But it definitely, you know, created barriers to the research that I think I would have been able to go deeper and see things much more firsthand if if I wasn't similarly constrained by the SCPA. Right.
So, but that those are serious concerns because a lot of that stuff you talk about that in your book, about the corruption or these relationships between people that may not be as firmly memorialized in a contract. But can you kind of also talk about all the like you were there for eighteen months and these two things, you traveled freely. Can you talk about the people you met and how you accruede all that ethnographic information.
Yeah, So most of the people that I met, I started out, you know, primarily interviewing fund managers and the people who work in their offices, so lawyers, accountants, come, any secretaries, the people who work in with them both in their offices but also who they contract out to
do some of this work. And then I, through them started to meet the people who they were courting, so and those tended to be more of the ultra high network individuals whose money is really all around the world, and who they were looking to attract investment into these
new frontiers. And I will say that it's a little bit of you know, going at it at two ends, because at this time, you know, investments in the US and in this context were often seen as safe where you can you know, generally see returns of you know, five to seven percent, and the return on investment that
you're seeing in these new frontiers was so high. I mean, so many people who were really interested in emerging markets, frontier markets, and with the exposure to China, people were looking for newer markets like Vietnam, and those that were in Vietnam were looking for even newer frontiers going to Me and Min and so there was sort of this matchmaking process of you know, folks from all around the world looking to you know, get exposure to or get
access to these new frontiers. While at the same time you have fund managers on the ground that are looking to raise capital for investment projects in these frontiers. And so I started by interviewing, you know, just anyone who was willing to talk to me about their role in
facilitating the movement of capital. I was really interested in how people shape markets, particularly markets that are new, that have weak legal institutions, where corruption is generally widespread, where relationships matter a lot, and so I was really interested
in sort of how people brokeer deals. And what I came to understand is that, you know, people have a whole network of people working on various deals for them, and I was so I was really interested in, Okay, what do each of the different people do the lawyers, the company secretaries, the fund managers, what role do they play in helping to facilitate the movement of capital into these markets, and how do they sort of facilitate the
movement of capital out or profits out. Which what I learned is that oftentimes the investment is made offshore and money only comes in on shore to cover the cost of operations. But a lot of the deals are set up, you know, completely offshore in Singapore, Hong Kong, and then in the British Virgin Islands, Panama, say Shells, so forth.
Right, So there's this whole process. You have a section in the introductory chapters about how this offshore investment may connects to onshore vehicles. There's this whole process roadshows. Can you talk about how that works?
Yeah, so, I mean most of the processes. I would say that one thing I will say is that when people talk about offshore and I think, you know, and you hear it through how Whitzman's lens, there is kind of a dirty you know, we often think of secrecy, corruption and all of that, and and what I want to be clear about is that, yes, that is all
true and there. But at the same time, when you're talking about less developed economies where there's not a lot of faith in the state or in the banking or financial institutions, offshore is also a way to protect much of these you know, to protect these investments. And so the state is you know, I think many in many ways fully aware that they're the only way that they can attract four and capital is by allowing for these
structures to be set up offshore. So it's so part of what spiderweb capitalism is is it's really theorizing how investors play in the gray, and what playing in the gray means is how they sort of play in the space between what is legal or illegal liicit, illicit, corrupt, you know, clean, And the argument is that we kind of think of these as binaries, when in fact they are They occur along a continuum, and people in these
kind of markets are often playing in the gray. However, you know, when I talk about these structures, it's not just it's not the it's it's often not the ultra high net worth individuals who are kind of doing this dirty work. They have they sort of you know, have people or employ people who carry out this footwork on
their behalf. And those are highly compensated financial professionals who carry out these investments, you know, oversee these investments and are often the face of the face of the deals. But ironically, they take home a very small percent of the profit margins on the deals while also assuming a
great deal of risk. And the reason why they're willing to do that is because they still are part of you know, the top ninety percent of you know, wealth income, you know, worldwide, and so it's worth taking the risk for them because I think the dream or the goal is ultimately ultimately to become or to grow to become ultra high networth individuals, and that is something that they imagine as more possible in new frontier markets where the risk is higher, but also the return on investment is
also higher when things go well.
Right, And you mentioned c Right Mills and the power Lead and how does his kind of insights you reference him as a very important influence upon you. How does he play into your inquiry into spiderworth capitalism.
Yeah, I was very inspired by Sea Right Mills because I would say that, you know, c Right Mills really is one of the first sort of leading sociologists who thinks about the relationship between political and economic elites and the ways in which political and economic elites work together, uh in order to you know, they sort of like work in concert with each other. And and I think that you know, in the US, in the US side, we often think of political elites as the political sphere
as separate from the economic sphere. Where the political sphere is regulating the economic sphere. There's these systems of checks and balances, and in less developed economies it's the you know, political elites who enable economic elites to sort of make their money but via you know, inside access to deals, particularly you know, state owned enterprise, you know, ones that are governed by state owned enterprises. Et cetera, et cetera.
And so, you know, what I really liked about going back to see Mills really was the ways in which he talks about how political elites essentially provide the legal runway for economic elites to lift off of. And it's sort of and this is where playing in the gray is really important. It's just sort of how people are able to legally, you know, you know, make their money in this very legal you know, in a in a very legal fashion, with the help of political elits and
so and in French, in new frontier markets. That's really it's not just the legal structure, you know, when it's legal. It's not just that you know, there's a sort of legal runway to take off on. But it's also an informal context. It's the spaces where there may be laws in place, but those laws are not necessarily enforced or heavily regulated.
Right, So there's a lot of other kind of shady things. And this is it's an academic book, but you have a lot of first person stories of these individuals. You've used, you know, pseudonyms, but these players have shared their systems and you talk about Fritz and Ross in the beginning you talk about some of these other Can you talk about some of the interesting characters you met and how they play into this whole frontier market capitalism.
Yeah, I think that As a sociologist, I'm just very interested in people and who are the people behind these
deals and how do they make money move? And you know, Fritz and Ross are people that I introduce in chapter one of the book, and I think they're very interesting people because Fritz is a you know, forty year old, you know, US citizen who's been who has spent a lot of time in Asia, you know, and he travels back and forth between Seattle, Hong Kong, Vietnam and me and Bar and is you know, based in Hong Kong
but overseas. Basically the firms investments in Vietnam and me and Bar and you know, he makes a base salary of around three hundred thousand dollars a year and in addition a bonus and so he is what I would call, you know, high net worth individual. And when I met Fritz, I thought, oh, you know, he's the he's the guy. It's it's the fund. You know, he's managing this big fund. And he said to me, oh no, no, actually Ross is the it's all it's all Ross's money, and most
of it is Ross's money. And he explains to me that the fund in total has two hundred and fifty million dollars. You know, fifty million comes from the small guys like like Fritz. But Ross is the one who brought two hundred million dollars to the fund, and so he's really managing in the way he sees it. He's really managing Ross's money and making decisions about where to invest in Vietnam and me and Maar that's sort of his mandate. But Ross's money is invested, you know, pretty
much all over the world. You know, they have investment mandates for Russia, Africa, Ukraine, Southeast Asia, and you know the Southeast Asia fund is the one that Fritz manages. And so I think this is really a story about how all of these investments and people are are connected to one another where you know, we and you can see through this one example a simplified example of this type of three D web, right, and.
So you have like this this groupted the high network, the lower level of people doing it. But there's also it has that frontier wild west connection to it because you mentioned some terms I didn't expect to see in your like resears fixers, Can you kind of talk about how some of these transactions are facilitated that are not in conformance with Western you know, legal standards.
You know, it's really interesting that you asked me that because prior at the time that I was doing this research, I came on the fixers. And so fixers are in this context are people who are primarily in charge of handling the on behalf of investors, and fixers you know oftentimes also handle these bribes on behalf of the high net worth individuals, not just the ultra high net worth individuals. And so these are the people who you know, bribe
judges and in lawsuits. They're the people who know who have basically relationships to the right key officials and can can anticipate problems, can ensure you know, licensing and permits will go through. So there are fixers at all different levels, I would say, right and different There's you know, dixters who do small things and fixers who do very big things depending on the investment and size of deal. And there's all different types that I go through in the
book later on in the book. And I think what's really interesting is that in this market, and people would say this about China too, which is that anytime a foreign investor wants to go into these markets, they have to have a local partner. And the reason why a local partner is important, not just or communication or cultural reasons, is because the local partner usually has a relationship with the with you know, state officials in order to get
things done. And it's not really actually the local partner that has those relationships. It's a local partner who has a fixer. And so there's all of these different degrees of separation that you know, keeps the ultra high and high net worth individuals sort of it creates these legal firewalls because they're not carrying they're not the ones that are carrying out the bribes. It's the fixer that's doing it.
And what I think is so interesting about the way that you've framed the question is that under the Trump administration, we start to see the word fixer all over the media and all over the news. Right. We see that with Michael Cohen, it was just the word fixer. We see fixers with Russia, Ukraine and the you know, relationships under the Trump administration and Epstein, I mean, I think of Epstein as a fixer in the in the US context in some ways, right, or a type of you know,
there are many different types of fixers. And so what I think, what I really like about how Weizman's book What's the Matter with Delaware, is that he really takes this back to the US, and so I allude to it at the end of my book where I say, you know, we often think of this as something that happens over there in third world economies, but Spiderweb Capitalism is a story about how these new frontier markets are actually interconnected into a web that's connected to very developed
economies in the US. And actually fixers are not is not something that exists just somewhere over there in some far away place like Vietnam or me and maar the there there. They exist here in the United States, and in fact, the their role in many ways or the
they're modeled after fixers in more developed economies. And many of these deals that are sort of you know, frontier market deals of front running the legal system and front running the law are also modeled after, you know, what happened in the US before regulations were put in place, and so it's almost like they're they're trying to front
run regulation the regulators. There be two steps ahead of the regulators by moving to new emerging markets or new frontiers where those laws are not yet put in place.
Interesting, and that's why the FCPA was put in place. And so then you just go to these newer markets, Me and Mark and these the Can you talk about the rapid change that's happened in at least those two markets in South East Asia Vietnam and me Inwa.
I think that Vietnam. So at the time that I was doing the research, everyone thought that Me and Mar was going to leap frog Vietnam in terms of foreign investment, primarily because Me and Mar is an English speaking country. It is, you know, set up with the legal infrastructure that's very similar to you know, common law, British common law,
whereas you know, Vietnam was much more complicated. You have it's a socialist market transitioning to a capitalist market, you know, a capitalist market based economy, but still under a socialist you know government. And so they just there was this sense at the time, I think that after the coup, a lot of stuff in me andmar has you know, stopped, slowed down or has come to a halt, and everybody's waiting, watching, waiting to see. But Vietnam is an incredible story. It's
an incredibly dynamic economy. Uh, it's grown, you know, tremendously, even from the time of my first book to my second book. The the economy is incredibly dynamic. It's grown so rapidly. You now have you know, billionaires in Vietnam that didn't exist there in years prior. So this idea of smaller spiders, you know, you know, having a vision of growing to becoming ultra high net worth individuals, I think you're there already. You're you've seen that there now.
And there are ultra high net worth individuals in Vietnam now who are you know have invested all over the world too, And so I think it's it's you know, it's it's a it's a market, and it's an economy that more people, especially with China closing up and everything that's happening in Hong Kong, have a greater have seemed to have to me a much greater appetite for Vietnam.
Interesting, and what what's your kind of take on the impact of this external capital on these frontier markets. As far as sociologically or ethnographically. Do you have a positive multivari view, positive, negative? What are your thoughts?
I think I have a very you know, multi layered view, and I think it's it's sort of I think of it as a kaleidoscope. And when you shift this kaleidoscope and look at it through various lens you have different views.
So I think, you know, when I look at it through a lens of you know, post war economy, you know, following the Vietnam War, it's almost sort of like you could see this as the rise and revenge of you know, of Vietnam, and not just in terms of the you know, geopolitical way, but in terms of you know, it's economic rise.
I think that, you know, as a Vietnamese American who comes from a refugee family, I remember, you know, returning to Vietnam in the nineties when it was you know, primarily you know thatched huts, and you know, you could see the ways in which the economy was devastated by the war. And if you go to Bangkok, you just think, wow, Bangkok was twenty years ahead of Ho Chi Min city, and you know, this is what happens when a country goes through a war and within a very short time.
I would say that Vietnam and ho Chiman City in particular is just you know bypassed. You know, Jakarta and Indonesia, Bangkok and Thailand, and everyone is just it's it's it's rapid. And I think that I think most people look at that dynamism and that rapid growth in positive ways. Of course, you know, the sociologist in me says, look, there's winners
and losers in a course. The people that are win are winning big in Vietnam, and then there are people that get left behind, you know, land dispossession and all of that. You know. For my first book, I definitely studied down and I would have I think I would have a a better picture of the unintended consequences of
these capital flows. But I really have for this for Spiderweb Capitalism, have kind of left that to other sociologists and anthropologists to study because this book really I was really interested mostly in elites and mostly in you know,
how they make deals. I will say that there are some you know, some stories that I have towards the end of the book that I don't want to go so deep into of you know, a group of people that were protesting because they were you know, they felt like they were you know, their land was dispossessed and
they were not paid fairly for their land. And so do I do think that whenever you have this kind of rapid development, there are inevitably going to be people that lose from this and people that you know, win hugely on the whole. Though most people would say that, you know, this kind of rapid economic development has been good because it's the GDP has risen. You know, it's you just watching a country really go from frontier to becoming an emerging market.
It is fascinating. I have family members who visited Vietnam and they were like, this is you know, it felt like a First World country. Yeah, some of the travel areas and things like that. So it really is remarkable. Kimberly, we were at the thirty minute mark. Is there anything you'd like to add or I mean, there's a lot more information in this book. We've covered kind of the
introductory stuff. We haven't talked about impunity, tax strategies. What would you like to add or anything I missed before we rerap this up.
I mean, I think that you know, it's interesting that you, I guess just riffing off of I was listening to one of your podcasts around Jeffrey Epstein and and it just I think, riffing off of some of your own interests. It just made me think about how, you know, we live in a global world where deal brokering is largely done between political and economic elites and often through you know, trust is built through the labors of and you know,
women or having women around as accessories. And my first book, Dealing in Desire gets into this, but I really even with my second book, Spiderweb Capitalism, I talk about these homo erotic triangles where you know, women are often used as props and accessories to one, you know, build relationships of trust, but also to create relationships of mutual hostage
or mutual potential mutual destruction. And I think that that's something that's not what we're seeing is it's increasingly not just unique to countries like Vietnam or you know, Asia, but also with Trump and Epstein all of the people that were involved in that in the US. I'm just really we're seeing it here on the US side, and I think that, you know, riffing off of some of your other work. I just one thing that I've been thinking a lot about in the aftermath of this book.
The other day, my husband and I watched Tinder Swindler on Netflix, and you know, I'm just astounded by the fact that the guy was arrested and was out of jail within five months. And I just think a lot about how why is it that in the US, in particular, financial crimes seem to go I mean, you know, they just seem to go so unregulated, or I would say, like they're not criminalized in the same ways as small
petty crimes. And I'm not a criminologist. I don't you know, I don't really study, you know, the sort of criminal justice system in the same way aside from reading, you know, the books that I think the general public is reading, like Michelle Alexander's book The New Jim Crow. But I when I think about that book, I juxaposed to my book and up next to you know what Hal Weizman
studies in his book What's the Matter with Delaware? I can't help but wonder, you know, if if spider Web, I mean, part of my argument is that, you know, with spiderweb capitalism, you have these systems that are very hard to take down, in part because they're not criminalized in the same way that we have, you know, this massive industrial prison complex around and I just you know, I guess I would put the question back on you looking at you know, the Epstein case, looking at other
kinds of financial crimes. You know, what do you think or why do you think it is that things like you know, people the tender swindler guy and some of the people that I study largely either fly under the radar or even when they are caught, I really don't have serious consequences compared to other types of crimes that we see out there.
I think that's a great question. I think it's something about this kind of new globalization environment where some of these new crimes are taking place transnationally, trans jurisdictionally, so they haven't the severity doesn't seem to be the same as it was within the particular jurisdiction. But I totally see that the similarities between these homo erotic, homosocial bonding things. That's probably call it pedosocial in Epstein's case, not all
the time, but the mutual hostage. That's why though everybody's quiet about Epstein, because a lot of those people got in that same relationship, not in a frontier market capitalism, but in some ways you could say that's a frontier, you know, sociological environment, whatever went down to that island or whatever was going on. There are definitely similarities there,
but I don't know. There's a lot of politicization of the law I think involved, which is why some of these people get away with light sentences and some don't, Like Epstein wasn't got a very light sentence back in two thousand and eight. So yeah, there's there's a lot of questions. There's a lot of questions that add on why.
And I think that, uh, there are different frontiers. So there's a frontier in Vietnam and Meanmar, but there's frontiers in all over the world that people aren't seeing whatever's going on in the Virgin Islands or maybe some of these other places where there a lot of sketchy things happened in Venezuela. So uh, it's it's there's definitely inequality, like you mentioned in your book, inequality between the actors of these wealthy, powerful people and the people who are
not in that one percent. So yeah, I think so great book, really fascinating discussion. Thank you so much. The where's the best place to get Spiderweb Capitalist.
Princeton University Press website, but also it will be available on Amazon, which I think is a place many people are shopping. I saw it at Target. I saw it listen at Target, So I think you know Amazon, Princeton University Press's website. I hope. I hope it's out there in many places.
I think it will be. And then the best place to contact you is either Twitter or your website ww kimberlykwog dot com. Right, yes, so if anybody wants to ask you questions, they can find out there. Do you have copies of your do you sell copies of your books through your website?
I do not sell copies of my book through my website, but they are there. There are links on my website for where to get them.
Cool and great book, really highly recommended. Again. The title of it is Spiderweb Capitalism, How global Elites exploit frontier markets and the author is Kimberly K. Wong. Book published September sixth, twenty twenty two. Thank you so much, for your time.
Thank you so much for having me on your show.
Awesome stay there, Say There,