It does not get much more humble than a safety match, but through its history the forces at work in globalization are rather clearly demonstrated. The world's match industry dates to the nineteenth century. In 1827, the friction match was invented by a British chemist John Walker using potassium chlorate and antimony sulfide on the burner side.  In 1844, two brothers in Sweden, Johan Edvard Lundstrom and Carl Frans Lundstrom, established a match factory in Jonkoping to manufacture lucifer matches. The lucifer match had a fatal flaw however, it ignited too easily but in 1855, Johan Edvard Lundstrom invented the Swedish-style safety match, the same match that we use now, by separating the combustible ingredients between the match stick head and the striking surface using newly discovered red phosphorus. For most of the rest of the nineteenth century, Sweden and then Japan (Makoto Shimizu went to Sweden in 1879 and brought back the technology) would dominate the global trade in matches but even so the world's match industry through 1914 is best described as autarkic. Local demand was largely met by local manufacturing.

As a result of severe competition prior to the First World War, the Swedish match industry underwent consolidation from 20 to two companies. One of these two surviving companies, Aktiebolaget Förenade Tändsticksfabriker (Förenade), was led by Ivar Kreuger. Between 1913 and 1932, Ivar Kreuger, who came to be known as the "Swedish Match King," would turn his small, family-owned match business into a $600 million global match empire. By 1917, Kreuger formed the Svenska Tändsticks Aktiebolaget, or in English, the Swedish Match AB (the company formally changed its name to the English version in 1980).

Despite the economic upheavals and political disruptions of the interwar period, Swedish Match had manufacturing operations in 36 countries including monopolies in 16 countries controlling nearly 60% of the world's match production. Kreuger's companies lent over $300 million dollars to governments in Europe, Latin America, and Asia in exchange for national match monopolies. Relying on international capital markets to finance acquisitions and to secure monopoly deals, by 1929 the stocks and bonds of Kreuger match companies were the most widely held securities in the world, including the most widely held in the US. When Kreuger committed suicide in 1932, forensic auditors discovered that Kreuger had operated a giant pyramid scheme, commonly called Ponzi schemes. His accounts were ridden "with fictitious assets, the truth hidden in a maze of over 400 subsidiary companies". Swedish Match's deficits exceeded Sweden's national debt. Funny how things just don't change though Bernard Madoff is sadly still alive.

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Thousands of angry citizens have joined noisy weekly protests against the government's handling of the economy, clattering pots and kitchen utensils in what some commentators called the "Saucepan Revolution."

A cacerolazo in Reykjavik? Not surprising given the depths to which Iceland has been plunged. Iceland has been mired in crisis since late September, when the country's three largest banks collapsed under the weight of debts (more on 'securitization' below the fold) amassed during years of rapid expansion. The value of the country's krona currency has plummeted over 30%, hitting many Icelanders who took out special loans denoted in foreign currencies for new homes and cars during the boom years. In addition, Iceland must repay billions of dollars to Dutch and British citizens who held accounts with subsidiaries of collapsed Icelandic banks. Prime Minister Geir Haarde's government attempted to combat the crisis by nationalizing the banks and negotiating about $10 billion in bailout loans from the International Monetary Fund and from a number of countries, including other Nordics, Russia and the United Kingdom. Still, economists expect the Icelandic economy to contract 9.6%. Life for an Icelander may yet again be just "salted fish". The above clip is from the second day of the biggest protests against the government in Iceland since 1949 when people protested against Iceland joining NATO.

A cacerolazo (cacerola is Spanish for pot) is a form of popular street protest and demonstrations in Latin America which consists in a group of people creating noise by banging pots, pans and other utensils in order to call attention to political and social grievances. Cacerolazos date back to Salvador Allende's Chile when housewives took the streets of Santiago and other major Chilean cities to protest stagflation and severe shortages in 1970-1973. The empty pots weren't good for anything else. The practice remains fairly common in Latin America and has spread elsewhere. Cacerolazos erupted last Spring when Argentine President Cristina Fernández de Kirchner attempted to raise export tariffs on a variety of agricultural commodities setting off six months worth of political and social unrest in the South American country. Now cacerolazos have come to Reykjavik.

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