CHAMPAIGN, Ill. – A new book from a University of Illinois Urbana-Champaign agricultural commodity markets expert examines a life he’s spent studying the vast markets that underpin the global financial system.
Scott Irwin, Laurence J. Norton Chair of Agricultural Marketing in the Department of Agricultural and Consumer Economics at the University of Illinois Urbana-Champaign, is co-author of Back to the Futures, a book that is part personal memoir and part personal Memoirs includes explainers of the futures market – the much-maligned invisible hand that controls the prices of commodities like corn, soybeans, cattle and crude oil that are at the heart of the US economy.
“As an academic, I’ve thought about commodity markets for decades, and I’ve lived it as a farmer’s son, so I wanted to take on a big challenge and see if I could explain how the futures markets work in a way that the general public could easily understand.” , but also adds a personal touch,” he said. “I’ve basically spent my entire adult life trying to understand and explain how these markets work, so this is my attempt to demystify them for the general public.”
“Back to the Future” published by Ceres Books
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Irwin’s journey began as a young boy in a small farming community near Bagley, Iowa, when he almost died after being hit by a truck speeding on the city’s dual carriageway. The irony, Irwin says, was that the near-fatal accident happened at the local granary — the very spot where his love of agricultural markets first took root.
“You could trace a line from this grain elevator to the floors of the Chicago Board of Trade and the Chicago Mercantile Exchange and where I am today,” Irwin said. “These two places were magical to me and the connection between the two runs deep.”
Irwin said he took inspiration from acclaimed author Michael Lewis (“Liar’s Poker,” “Moneyball,” “The Big Short”) as he attempted to bring the somewhat unfathomable workings of the market through first-person narration.
“I use these personal experiences to introduce the more technical aspects of what I write about — parables about personal risk, and then expand the scope and explain them in a professional context,” he said. “So a personal narrative framework that flows into these somewhat shaky market explainers and then back again.”
Thematically, the book is about the uncertainty of it all: the element that plays risk in life — in real life and in the markets, Irwin said. To that end, there are even closer encounters with death throughout the book: stunts involving motorcycles, snowmobiles, race cars, farm equipment, and encounters with rogue cows while growing up on the family farm.
“The idea behind the book was that I thought I had enough crazy personal stories about risk and risk management that they could serve as a framework for a larger story,” he said. “Markets are somewhat abstract to the average person, so explaining and reproducing these complex human-level interactions to a non-academic audience is a natural challenge. Basically, this book tries to take the mystery out of the markets and show that people are actually behind them.”
The book is also a vehement defense of the much-maligned role of speculation in futures markets.
“Speculators certainly have a bad reputation, but I would argue that by taking risks, they reduce risk for the little guy — the farmers and the middle operators, like those who run the warehouse elevators or process grain,” Irwin said. “Basically the people I grew up with.”
Though it’s not a textbook and the style and stories are somewhat irreverent, the subject itself is serious, Irwin said.
“Narratively, it’s a difficult tension to turn your personal stories into a fun and entertaining book about the futures markets,” he said. “After reading this book, especially the more technical parts, you’ll have a better understanding of what’s being talked about on CNBC. Or if you read the Wall Street Journal, you’ll have a better sense of what’s going on, especially in soft commodity markets.”
The book will be published by Ceres Books on April 19th.
Irwin’s co-writer was Doug Peterson.
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