The Everything Store: Jeff Bezos and the Age of Amazon by Brad Stone

Brad Stone’s treatment, The Everything Store: Jeff Bezos and the Age of Amazon, is the talk of the business press this week. Jeff Bezos’ wife, MacKenzie Bezos, posted a ‘one-star review’ of the book on the Amazon site. In it, she expresses concerns about the book’s ‘factual inaccuracies’ and ‘narrative tricks.’ While she certainly had a better view of the recounted events than did Stone, her objections seem quibbling. This is a thoughtful and well researched book, with a surprisingly balanced tone: Stone neither praises Jeff Bezos nor does he bury Bezos.

Stone’s book is both a CEO biography and a corporate history. Bezos is the exception that proves the rule; he is the visionary founder who wasn’t pushed aside for a professional ('adult') manager. And given Bezos’ continuity at the helm of Amazon, one can fairly charge much of Amazon’s success -- and its bullying behavior -- to Bezos.

Stone’s book is a prosecutor’s dream -- it is a catalog of unfair business offenses (were such behavior disciplined today). There is a zone of indeterminacy involved in most bargaining: between the terms a party would accept and the better terms a party might exact (before driving the other party away). Bezos is shown to consistently drive for the very best outcome in Amazon’s dealings -- where the greater part of the joint benefit falls to Amazon and a bare minimum is left for the ‘cooperating’ counterpart. Perhaps this is to be admired; we’d all like to be ‘tough bargainers.’ But Bezos (as depicted by Stone) doesn’t pull punches. He is capable of ‘refusing to deal.’ He applies price pressure against smaller firms. He levers Amazon’s immense power against competitors and partners.

Making It Happen: Fred Goodwin, RBS and the Men Who Blew Up the British Economy by Iain Martin

Making It Happen is the story of the crash of RBS (née Royal Bank of Scotland), momentarily Britain’s largest bank. Iain Martin tells a peculiarly Scottish story in Making It Happen (Martin himself is a Scot): the expansion of RBS was driven by a blend of Scottish pride and insecurity. He takes us through the life history of the Royal Bank (though RBS, as of this writing, is not yet dead). The bank is founded in 1727 in the aftermath of an earlier Scottish financial misadventure, the Darien enterprise: a failed outpost located in present-day Panama. Chastened by this experience, the early masters of the Royal Bank of Scotland exercised prudence of a Presbyterian kind (caution and care) in growing the bank, yet remained open to innovation (such as the use of the joint-stock company) that the English ignored. RBS quietly prospered in Edinburgh, and then the financial world shifted. In short: the Scottish economy was too small to support independent Scottish banks, and so, for RBS to survive, it would need to vault itself to a much larger scale (first UK-wide and then global). Two absolutes are then fixed for RBS: the bank must remain independent and it must be directed from Edinburgh. And this is where the Fred Goodwin story starts.

Fred Goodwin is (if nothing else) devoted to Scotland and hence to building RBS as a Scottish national champion. Goodwin did this is a fairly straightforward way -- he bought other banks (including quite large banks) and proceeded to meld them into the RBS structure. Gains to RBS shareholders -- prototypical raider profits -- resulted from the ensuing ‘rationalizations.’ Goodwin’s fame at slashing employment earned him the nickname ‘Fred the Shred.’ Those who were lucky to remain employed remained exposed to Goodwin’s brutal management style -- such as the daily “morning beatings.”

Lean In: Women, Work, and the Will to Lead by Sheryl Sandberg

Sheryl Sandberg’s Lean In has been a major event; it’s been well received and thoroughly discussed. The book and the debates it stimulated appropriately returned attention to the ongoing gap between success promised and achieved by women in the corporate world.

Sandberg is herself an over-the-top success story. She has held top positions at both Google and Facebook. She, at least, is a take-all winner, one who managed to burst through the glass ceiling. But she remains aware of the many women around her who fail to speak up, who make unneeded compromises and veer off track. And she’s aware as well of those women damaged by unrealizable ‘have it all’ fantasies. Her prescription (which she makes clear is not intended for all) is to “lean in” -- to remain ambitious both for one’s personal career and for establishing a more equal world.

Lean In, Sandberg writes, is not a memoir, nor a self-help book, nor a career management primer. Maybe, she admits, it’s a manifesto. So perhaps it is not unfair to look at Lean In from a scientific perspective: what is Sandberg’s understanding of how one can effect social change? Sandberg herself is a prominent vertex in a social network that famously connects Google and Facebook (the ongoing migration of high tech talent from Google to Facebook, the smaller and more cool company, is partly inspired by Sandberg’s at-the-helm example). She can and does span these communities, as well as those built around Harvard, TEDTalks, and whatever Larry Summers happens to be doing (she describes Summers as a mentor). And no doubt her connections lead elsewhere, to centers of power unrevealed in Lean In. The trick then for Sandberg is how to maximize the influence that comes with such auspicious positioning.

The Billionaire’s Apprentice: The Rise of the Indian-American Elite and the Fall of the Galleon Hedge Fund by Anita Raghavan

Forgive me for being thick: after reading Anita Raghavan’s book I had to think a moment in order to name the billionaire’s apprentice. The apprentice has to be Rajat Gupta -- himself a humble multi-millionaire -- who services the only billionaire in view: Raj Rajaratnam, founder of the Galleon hedge fund. Raghavan recalls Goethe’s Sorcerer’s Apprentice in her title to capture Gupta’s doomed adventure. But it is the sorcerer Rajaratnam, and not his apprentice, who brings Galleon crashing down; Gupta is destroyed in the process.

So what did Gupta do? The government taped a compromising phone call by Gupta to Rajaratnam where
Gupta reports the confidential discussions of the Goldman Sachs board (Gupta was then a Goldman director). Gupta was only one of Rajaratnam’s many sources, and it is not clear that his information was that useful. (Rajaratnam argued that he traded on a ‘mosaic’ of information; no one item served as the basis for his actions).

It is hard to dispute that Rajaratnam regularly traded on inside information.  But was all (or most) of Galleon’s fortune built on inside information? I asked the same question in my review of The Buy Side, a tell-all by Galleon-insider Tyler Duff. My question is scientific in spirit, not legal.

Scarcity: Why Having Too Little Means So Much by Sendhil Mullainathan and Eldar Shafir

In Scarcity, economist Sendhil Mullainathan and social psychologist Eldar Shafir introduce the study of scarcity as a ‘science in the making.’ One of their colleagues, perhaps a sceptic and certainly a joker, gibes: “There is already a science of scarcity. It’s called economics.” But the science of scarcity Mullainathan and Shafir have in mind is not familiar economics. Scarcity is much more the subjective experience (and hence a psychological phenomenon) occasioned by want. Scarcity, say Mullainathan and Shafir, ‘captures the mind.’

Scarcity is a condition that the authors easily recognize. They suffer the curse of the hyper-successful: they have insufficient time at hand to accomplish all they have committed to do. The lack of time preys on their minds (and promotes them to waste more time worrying and complaining about their lack of time) and sets off a cascade of real-life consequences: missed appointments, neglected family, unpaid bills. And perhaps more: a sense of helplessness, depression, despair. We wrote this book, the authors declare. "We were too busy not to."

And so the first scarcity -- the scarcity the authors experience -- is the shortage of time. But their field immediately widens to include debt and poverty, hunger and the dieter’s calorie-count, and loneliness. Scarcity collects these conditions and explores their dilemmas. While many will escape a particular form of scarcity (we are not all poor), all may experience some form of scarcity (as might a recipient of a MacArthur ‘genius grant,’ such as time-pressed Mullainathan). The authors assert the existence of essential commonalities across these states.

How Asia Works: Success and Failure in the World’s Most Dynamic Region by Joe Studwell

Pity Joe Studwell. He has written a very intelligent, very thoughtful book. You might not agree with much of it; I have my doubts about his recipe. But there is little doubt what the book is: an exercise in economic history, with a focus on a peculiar developmental pathway followed by a few highly successful (generally northern) east Asian countries and not followed by certain (largely southern) east Asian countries. And geography has nothing to do with these diverging outcomes.

So poor Studwell delivers this intelligent book to his editor - one imagines - who decides it needs a snazzy title. Regardless of whether the title describes Studwell’s book. Studwell writes about ‘How Certain Asian Countries Developed’ - not about ‘How Asia Works’. He has very little to say in How Asia Works about how any of Asia works today - again, he is an economic historian. And he makes no claim within the book’s pages that Asia is ‘the World’s most dynamic region.’ Poor Studwell.

He can take comfort from having written a provocative book, which challenges much of the prevailing orthodoxy in developmental economics. And he’s obviously willing to horrify both left and right - praising Robin Hood-esque land reform (but not agricultural collectivization), autocratic leaders who impose export discipline on their cronies, and the elegant effectiveness of capital controls.

Studwell examines the East Asian development successes (Japan, Korea, Taiwan, and China) and the laggards (Malaysia, Indonesia, Thailand, and the Philippines). The winning path, according to Studwell, involves three distinct phases (“one, two, three,” he calls these in his concluding chapter). These three phases are a recipe for developmental success, they form the “same stretch of the river” that poor countries must navigate.

The first stage requires equitable land distribution to absorb labor and capture the productivity gains associated with moving to garden-style agriculture by small family landowners. The magic here is that everyone works - and most start at the same base. Garden intensity agriculture yields very low returns on labor but enhanced returns on land - it permits the accumulation of small surpluses that can be used to fund imports of necessary technology.

The second phase is the development of export-oriented industrialization. And Studwell cannot emphasize enough the importance that industrialization be export-focused; import-substitution strategies are doomed to fail. Here we see the green thumb of the successful state. Prospering East Asian nations do not (generally) direct their economies; rather they provide incentives and protection to exporting firms (fertilizer?) and then apply discipline (weeding?). The state does not pick winners, but it does cull losers. Studwell traces the development of the export-oriented automotive industry in Korea. Several firms were launched, but in the end one survives: the Hyundai/Kia complex.

Studwell’s third phase involves a sheltering set of financial policies. The state must support its exporting firms financially - which necessarily involves allocating capital in directions that would not be justified by short-term returns. Left unguided, private banks chase quickly realizable returns from investments that may have little transformative effect (luxury hotels, anyone?) Savings must be captured and directed, and this involves exchange restrictions.

So what went wrong in the other East Asian countries? Why do not Malaysia, Indonesia, Thailand and the Philippines share in the prosperity? Here the answer is straight out of Tolstoy: each fails in its own way. For Studwell, this means each (at one or more critical junctions) fails to progress down the ‘same stretch of the river’. But this simplifies the error. There are many diverging pathways, many other policy choices that can be made. After all, there are no illuminated signs marking the certain pathway to developmental success. Studwell sees certain leaders as developmentally clear-headed (including MacArthur and Park Chung-hee) and others as muddled (Mahathir); Marcos of course was a thief.

It is not a question of following advice; Studwell makes clear that most advice given developing countries is positively wrong-headed. And while history may demonstrate (as Studwell argues) that the peculiar one-two-three recipe worked for Japan, Korea, Taiwan and China, it does not follow that it will work (or would have worked) for others.

The tone of How Asia Works is dry, to put it mildly. But I did enjoy Studwell’s occasional accounts of arriving in various Asian capitals and noting the correlation of personal service to the local Gini coefficient (a metric of wealth inequality within a particular country): Studwell instantly senses the passage from Gini coefficient 3.0 to 5.0. The northern East Asian countries Studwell studies not only ‘work’ in the sense of greater per capita wealth (China aside); they also have (somewhat) more equitable distributions of wealth.

How Asia Works is longlisted for the 2013 Financial Times and Goldman Sachs Business Book of the Year Award.

See my reviews of these other longlisted books for the 2013 FT/Goldman Sachs Award:
Ray Fisman and Tim Sullivan, The Org

• Neil Irwin, The Alchemists
• Viktor Mayer-Schönberger and Kenneth Cukier, Big Data
• Moisés Naím, The End of Power

The Org: The Underlying Logic of the Office by Ray Fisman and Tim Sullivan

It feels odd to be composing this review of Ray Fisman and Tim Sullivan’s The Org in the days following Ronald Coase’s passing. Coase was an unusually creative and influential thinker - one who identified some basic truths of organizational life that had not been generally recognized: the kind of simple things that, once pointed out, cannot fail to be seen.

Coase and the work that followed Coase form much of the subject matter of The Org, a book-length meditation by Ray Fisman and Tim Sullivan on the science of the organization. Indeed, Fisman and Sullivan launch the book with the story behind Coase’s posing of the grand question: “Why orgs?” Young Coase travels to Chicago, meets with managers, and reads the Chicago phone book. He is struck by the range of scale and activities pursued by the firms he finds. Why then, asks Coase (and ask Fisman and Sullivan), are some activities conducted within firms and others between firms (that is, via the market)? Coase’s answer (transaction costs) may or may not be correct (‘transaction costs’ always seemed to me to be a convenient label for a still elusive explanation, almost a tautology); what is important is the question.

Organizations are mysterious. We fit them on like suits of clothing - and instinctively know how to push and pull their levers. Fisman and Sullivan focus on what happens within the firm - how organizations compel human agents (because that’s what we are) to pursue organizational goals. The resort to organization is by and large a given. At this point, they collect the principal/agent mysteries that form much of the challenge to understanding how firms work. Fisman and Sullivan do not confine themselves to business organizations in The Org - indeed their best coverage involves organizations that are not business firms: the Baltimore police department, Methodist churches and the military.

Big Data: A Revolution That Will Transform How We Live, Work, and Think by Viktor Mayer-Schönberger and Kenneth Cukier

So here’s my favorite quote from Big Data - from an interview with Mike Flowers, New York City mayor Michael Bloomberg’s ‘director of analytics’:

You know, we have real problems to solve. I can’t dick around, frankly, thinking about other things like causality right now.

We find ourselves in a new world, argue Viktor Mayer-Schönberger and Kenneth Cukier. No longer need we grapple with the world by spinning theories and using them to make predictions. We now have Big Data and Big Data will speak to us, gifting us with insights that were never before accessible.

By Big Data, Mayer-Schönberger and Cukier refer to the vastly greater amount of collected and stored data around us. Big Data also reflect a new economics - where the costs to acquire, store and manipulate data are increasingly negligible. Big Data is often collected mindlessly and incessantly: our continuous GPS coordinates, our Google searches.

Big Data presents new opportunities for prediction. Old prediction involved the collection of precise sample data, which would then be fitted into a theory. Theory was developed under causal lines - data confirmed theory and reflected a link between cause and result. If we collect data showing a large number of people diagnosed with the flu, we may infer the presence of an epidemic. 

The End of Power: From Boardrooms to Battlefields and Churches to States, Why Being in Charge Isn’t What it Used to Be by Moisés Naím

Moisés Naím sees the decline of power across many institutions. He is at times wistful, at times celebratory in his reaction to power’s decay. But he isn’t entirely clear why we should care about the passing of power. The powerful do care; Naím has many powerful friends who lament power’s loss of magic. Popes, pols and pundits just don’t get the respect their predecessors received; their authority is more circumscribed, more readily challenged (the same decline is noted by law professors). But for the greater number of us, who are in more settings objects of the power of others than detainers of power, the end of power is not a self-evident cause for concern.

A decline in social organization is a cause for concern – and to the degree the phenomena described in The End of Power signal a loss of capacity for coordination, Naím’s book is more than an indulgence of ambivalent nostalgia. Naím is careful with his definition of power: power is the ability of some few - the powerful - to direct the actions of others. And, he asserts, there are four means by which power is exerted: muscle (force), code (tradition), pitch (persuasion), and reward (incentive).

Naím is a superachiever who has spent his life at or close to the top. He was a prominent politician in Venezuela – and since has become a heralded writer in the United States. As such, his personal prescription, given toward the end of The End of Power, is quite surprising. Get off the elevator, Naím urges. And by this he calls for an abandonment of mindless ambition and more; elevator thinking is the focus on rank and hierarchy, which promotes power as an end in itself.

The Alchemists: Three Central Bankers and a World on Fire by Neil Irwin

Neil Irwin's The Alchemists delivers on its promise: the book is a central banker's view of the 2007/2008 Financial Crisis and the more recent (and related) Euro Crisis. Only the subtitle disappoints: The Alchemists isn't quite the story of the three central bankers depicted on its cover (Bernanke, Trichet and Mervyn King). Rather, The Alchemists offers a thorough treatment of Bernanke's crisis-plagued tenure at the Fed and insightful coverage of the ECB's Trichet - until Trichet morphs into Mario Draghi just in time for the worst of the Euro Crisis. Plus the odd bit of Bank of England's Mervyn King thrown in for comic relief. No doubt Irwin's project was inspired by Liaquat Ahamed's Lords of Finance, winner of the 2010 Pulitzer Prize, which treats four central bankers (their philosophies and their quirks) from the 1920s: the UK's Montague Norman, France's Emile Moreau, Germany's Hjalmar Schacht and the Fed's Benjamin Strong. Now these were central bankers: they dominated the monetary policies of their day.

Our contemporary central bankers lack some of the color of their predecessors (save Mervyn King, who is pretty darn colorful). Moreover, their field of action is much more circumscribed. They can be checked by other personalities within their respective institutions, by intimidating political leaders, and by uncooperative markets. These bankers do manage, at least in this account, to largely have their way in responding to the crises, through will and manipulation, and by playing on the palpable belief that no one else has any better idea of what to do.

Irwin's story begins with the shudders in the market in late 2007, when BNP is the first major institution to admit it had no real idea how much those tricky mortgage-backed securities were worth. The response by Trichet is immediate - and is the precursor of many more ECB interventions. Things get much much worse in the following year with the fall of Lehman Brothers. Lehman's collapse is marked by the surprising non-intervention of the Fed. Irwin's account of the abandonment of Lehman Brothers is thin - but he suggests that the Fed may have felt it had no clear legal basis to act. Bernanke no doubt learned many things from the Lehman Brothers fiasco, including (perhaps) the advantages of being a bit less scrupulous in respecting the limits of the Fed's authority.

Volcker: The Triumph of Persistence by William Silber

So what would a Democrat central banker look like -- if there could be one? Resembling Paul Volcker, answers William Silber. That said, it is hard to recognize much in Volcker's policies marking him as a Democrat. Nixon did not trust him -- but that alone scarcely defines a Democrat. Volcker famously endorsed Barack Obama in the 2008 election -- but then so did Republican Colin Powell.

Silber adores Volcker -- which weakens Silber's ability to answer (or even ask) tough questions. It is clear that Silber believes Volcker saved the dollar -- and that he is a swell guy to boot. Pity poor Mrs. Volcker who spends an isolated life in a series of ratty apartments while her husband chases glory (in public service, mind you) rather than wealth. Neither Volcker nor Silber seem to realize what a lousy husband he was -- and Mrs. V. was too tactful to point this out.

The Silber account establishes Volcker's self-sacrifice -- and I suppose there's some foundation for it. Volcker spends many years as an underpaid public servant while having far more lucrative opportunities in the private sector. Yet one gets the sense that Volcker is simply more comfortable in the world of the Fed than he would ever have been in a bank. Generals are willingly generals -- there is something (glory? military music?) that draws them to their role. Their renunciation of wealth and a stable home-life only prove their ambition. While we should be grateful for their service, it is not clear that the generals are sacrificing anything. And so perhaps it is with Volcker.

There's good character present -- Volcker likes cheap cigars and hates potted plants. He doesn't really care about his shoes -- and silently worships confident political stars like John Connally. His devotion is peculiarly institutional: not to the United States, but rather to the Fed and its mission, as he perceives it, protecting a sound dollar. Silber's worshipful treatment of Volcker places Volcker's character in the center. The fundamental excellence of who Paul Volcker is (an excellently common man) spills over into his professional life. The strange mixture of talent, insecurity and ambition suits him to his mission.

The Hour Between Dog and Wolf by John Coates

What a fun book this is! The Hour Between Dog and Wolf by John Coates mixes pop finance with pop science, sketching some surprising links between them. I will trust Coates to get the science right (he provides citations). His investigation of financial markets is largely anecdotal and so speculative, but all the same it yields tantalizing suggestions.

Coates is a former derivatives trader -- which gives him authority to describe the subjective experiences of winning and losing at a trading desk. He (somehow) becomes hooked on neuroscience research; he describes himself sneaking away from his Wall Street desk to mix with scientists at Rockefeller University. The book seeks to bring these two worlds together. Coates immerses himself in the activation of hormones: testosterone, cortisol and the like. It is these chemical agents that produce the profound effects on the humors of financial traders, and hence overall market behavior.

Coates attacks the mind/body dichotomy: a financial market trader reacts more like an athlete than an analyst in responding to the stimula communication through his screen. Coates employs emerging understandings of mind/body feedbacks to track the play of traders. The traders can react before they 'see', rely on 'gut feelings' and engage in mano-a-mano combats from which they emerge winners or losers. These are quintessentially physical experiences. The markets themselves may then be understood as projections of this human biology.

Trading in financial markets, like war, is a young man's game. It draws on physical resources and reaction times, and a constitutional inability to fully appreciate surrounding dangers. But young soldiers require leaders with a different set of biological characteristics for larger scale success.
Coates develops a human biology account for market cycles. Biofeedback loops reinforce confidence in those traders experiencing winning streaks -- and most traders win in rising markets. The narcotic effect accompanying success then goads these traders to risk again and again, with ever greater stakes. The manic exuberance (a real physical effect produced by past successes) pushes speculators beyond 'rational' limits. Perspective is lost by nearly all at the top of a bubble.

Private Empire: Exxon-Mobil and American Power by Steve Coll

Steve Coll's Private Empire provides oil spill-to-oil spill coverage of the recent history of Exxon-Mobil, and in that course brings us Bush/Cheney adventures, climate change deniers, armed conflicts in lost and forgotten places, and the rise (and fall) of Russian oligarchs. In this complex work, Exxon-Mobil appears misunderstood and misunderstanding.

Coll begins his story with the 1989 crash of the Exxon Valdez, the moment that seared Exxon in the public consciousness as an environmentally reckless brute, pandering to America's oil addiction at the cost of America's soul. Exxon reacts from this crisis in both positive and negative ways. It becomes obsessed with safety -- though the company's pursuit of safety is not to assure accident avoidance as much as it is a premise for increasing demands for precision and attention from its workforce. The safety culture Exxon creates becomes, in a menacing way, grounds for enforcing discipline, regimentation and uniformity-of-voice throughout the enterprise.

The second formative moment Coll relates is the 1993 removal of Exxon's headquarters from New York City (Exxon was the former Standard Oil of New Jersey) to Irving, Texas. Neither bi-coastals nor Texans would be surprised by the resultant shift in company worldview.

Steve Jobs by Walter Isaacson

If only Lytton Strachey had written this biography of Steve Jobs. He would have punctured Jobs, ridiculed his dirty feet and preachiness, his unshattered conviction of his own primacy. Not that Jobs wasn't a great figure: he certainly was. But there is something off-putting when a biographer lets his subject declare (and so establish) his own importance. The temptation in reviewing this biography is to assess the subject and not the book. And the subject is certainly compelling. Jobs' accomplishments are familiar, his eccentricities less so. And so there is sordid attraction exercised by his abandonments, his eating disorders, his cruelty.

Isaacson relishes his access to Jobs and produces a work Larry King would envy. Certainly Jobs' foibles are presented -- but simply because a biographer has a license to report "warts and all" does not discharge his critical responsibility. Isaacson does not judge Jobs. At best, he reports -- in various fragments -- the partial judgments of Jobs' many friends, colleagues and acquaintances. Joan Baez is perhaps the most honest of all: she has little to say beyond a typifying story (Jobs is clueless) and leaves the impression that she meant more to Steve than Steve ever meant to her.

No doubt many readers of this book will search for easy recipes for replicating Jobs' phenomenal business achievements. Jobs seems to have had two running theories for Apple's success. The first account celebrates Apple's industrial design. The design story is complex -- and has deep psychological roots. Jobs learns from his father (a modest man he greatly admired) of the importance of finish, even for elements hidden from view. Design does not reflect the creator's integrity; it assures it. But design involves more than form following function -- the book is replete with stories of Jobs' rejecting engineers' design compromises that duly reflect functional concerns. The aesthetic trumps the functional in these stories (Isaacson gives no counterexamples), at times leading to stunning product, and at other times, to disappointment and delusion. In the affair known as "Antennagate," Jobs had insisted that a gorgeous steel rim surround the iPhone 4. Unfortunately, this compromised an essential function: the phone dropped calls at a higher rate. The technical solution adopted by many (and offered by Jobs) was an ugly case which, of course, masked the iPhone 4's design!

Jobs had a wonderful design sense, though he became increasingly closed off to new aesthetic experience. Dylan remained the center of his musical universe (his iTunes list is true to baby-boomer form). He perceives Bach's greatness -- but stops there (though Yo-Yo Ma is a "friend"). Had Jobs been more intrigued by music -- and willing to explore - he may have found artists who better reflected his simplicity instincts.

The second account of Apple's success draws on Jobs' insistence in controlling the user's entire experience. Isaacson describes the consistent Apple practice of developing both software and hardware. Microsoft's Bill Gates plays the role of advocate for the other stance: that software success is best achieved by maintaining an "open" philosophy, licensing to a wide variety of hardware manufacturers. Notwithstanding Apple's triumphs, Gates may have the better view.

The Jobs/Gates relationship fascinates Isaacson -- one is up when the other is down throughout their intertwining careers. Each is suspicious of the other, each hesitates to praise the other's strengths. Yet we're told of Gates' visit to Jobs' home soon before Jobs died: "Is Steve around?" Gates asks Jobs' daughter. In an enterprise version of the Great Man theory, Isaacson reduces the Microsoft/Apple rivalry to a personal contest between the firms' respective CEOs.

If there are prescriptions to be found here, they are the kind that cannot be followed. Make great products. Sure thing. In the end, Jobs is not a customer first guy. Nor is he, in his self-judgment, a product first guy. He is a company first guy, at least when that company is his. Jobs was, as Isaacson tells us, thrown out of Apple -- and when he returns, he works for a long stretch as an unpaid interim CEO because Apple remains throughout 'his'. Jobs' identification with Apple (and Pixar, the other major company he runs) is complete; it absorbs all his passion. No surprise that little part of Jobs was left for family. Steve Jobs declared that Apple would be his legacy -- he hoped to leave behind a great company that would persist in reflecting his values. Yet he was witness to the inevitable drift that befell two great companies -- Hewlett-Packard and Disney -- distancing them from the visions of their respective charismatic leaders.

A magical character dances through this story of Steve Jobs' life: his ever abused, frequently forgotten, yet always forgiving partner and Apple co-founder, Steve Wozniak. I like Woz.

Steve Jobs is shortlisted for the 2012 Financial Times and Goldman Sachs Business Book of the Year Award.

What Chinese Want: Culture, Communism and the Modern Chinese Consumer by Tom Doctoroff

In this unabashedly pop business book, Tom Doctoroff, head of the J. Walter Thompson advertising firm in China, tells us What Chinese Want. Yet the implicit question is complex: what do the Chinese want for themselves? For their children? For China? And to answer the question coherently involves considerable psychological framework. Doctoroff is an ad guy -- so the question that lies squarely within his expertise might be: what does the Chinese consumer want to consume? And this question he begins to answer. He is less certain -- and less convincing -- when applying the insights he draws from Chinese consumption habits to the more mysterious nature of Chinese culture, politics and foreign policy.

I suppose we can learn something meaningful about the Chinese from studying their patterns of material consumption -- even using the tools of an advertising executive. In some sense, Doctoroff's inquiry is an exercise in applied cultural anthropology -- though his ends are more instrumental than scientific. So which firms are doing well in China -- and what do their successful adaptations suggest?

Starbucks, Doctoroff tells us, has configured larger stores in China which serve as group meeting places. The Chinese consumer would not pay the equivalent for $4.00 for a cup of coffee for private consumption (this may reveal the inherent cross-elasticity of Starbucks coffee and ubiquitous hot tea). The consumer will do so, however, when observed by others; the Starbucks customer's extravagant expenditure for a latte is justified by a gain in social standing. And so by facilitating the prospect of mutual observation -- by providing large, welcoming meeting spaces -- Starbucks sells coffee in China.

The Starbucks example typifies a more general tendency Doctoroff observes: a uniquely Chinese form of conspicuous consumption. Luxury goods are avidly purchased by Chinese consumers -- from Starbucks coffee to Cartier watches -- if their consumption is observable. But when consumption is hidden -- in the home for example -- the Chinese eschew unneeded expense, preferring cheaper products that are weakly branded and of domestic origin. Doctoroff would likely predict tough going in China for an importer of high thread-count sheets.

So the Chinese are, says Doctoroff, and so they will remain. For one of the keys to Doctoroff's presentation of the Chinese is his sense of their sense of timelessness. The Chinese remain the way they are; new experiences, through consumerism, exposure to technology and increased contact with the outside, will not change them.

Doctoroff has lived in a China for many years. Indeed, he tells us of moving into a picturesque and resolutely Chinese neighborhood in Shanghai -- admirably, he does live in post-colonial isolation. And so, no doubt, there is a significant stock of observation behind his construction of Chinese character. But I remain suspicious of Doctoroff's generalizations. Perhaps this is precisely what an advertising professional is tasked to accomplish -- form generalizations that can serve to inform marketing plans. Yet there is little distance between broad cultural generalizations and misleading stereotypes. I wonder whether this book will embarrass Doctoroff's grandchildren 50 years from now.

Doctoroff teaches us that the Chinese have a notion of 'face' that may not be offended. That they are intrinsically pragmatic. That order is the paramount value. That the Chinese are ambitious in a perversely contained way. That their sense of cyclical history leads them to be fatalistic, yet assured of China's return to glory.

Chinese society is built from the foundation of the family, and not from the individual, Doctoroff observes. As such, it is the social that is essential. Larger and larger social units are built outward from the family -- extending from clan to all China -- with attenuating yet meaningful identification and allegiance. The state, however, is distrusted. The Party's legitimacy depends on a fragile bargain -- its continued exercise of power depends on the maintenance of order and rising material conditions.

Doctoroff argues that the Chinese are afflicted with a weak civil society. This leads to a general insecurity. The Chinese are uncertain about preserving what wealth they may acquire, they fear dependency (beyond the family) and they are haunted by possible breakdown of social order. Doctoroff sources Chinese defensiveness to these anxieties. And he includes, as a characteristic manifestation of Chinese defensiveness, its reactive national alarms to challenges to its sovereign territory. Doctoroff's 'foreign policy' prescriptions are fairly simple. China is not to be feared, as it is not aggressive. But neither is China to be threatened, for it will defend itself.

Doctoroff may be right about all this, but if so, it may be his intuition that correctly guides him and not his deep knowledge of Chinese consumerism.

What Chinese Want is longlisted for the 2012 Financial Times and Goldman Sachs Business Book of the Year Award.

A Capitalism for the People: Recapturing the Lost Genius of American Prosperity by Luigi Zingales

In the preface to A Capitalism for the People, Luigi Zingales recounts his departure from an Italian university for the wonderland of American academia. Here merit, neither contacts nor obsequious devotion to one's supervisor, is the key to success and Zingales' triumphs. He becomes an admired professor at the University of Chicago business school, a place he praises for its openness, its devotion to excellence and its rejection of status-based primacy (pity the poor dean, newly arrived from Stanford, who is devastated by the slashing comments of a junior colleague).

But the broader America he sees around him does not match -- in aim or reach -- what Zingales finds at Chicago. Zingales returns to the theme developed in his earlier writing: the United States is burdened with crony capitalism, the same social disease he sought to escape in emigrating from Italy. American business -- and American politics -- is dominated by corrupt elites who prefer protection and status quo to competition and innovation. Zingales introduces a neat distinction -- America remains pro-business, but it is no longer pro-market. And so Zingales seeks to reintroduce and reinvigorate competition in American economic and political life.

Zingales invites us to revive American populism -- and by this he intends the trust-busting populism of Theodore Roosevelt and not the proto-fascism of Huey Long nor the toxic nativism of the KKK. The focus is returning prosperity to the common American, and not further enriching Wall Street, Pharma, agriculture, government contractors, and the greater bulk of big business. Yet his populism is capitalist at heart. If the ties between government and business can be broken, new and vital businesses will thrive. Political life will improve as well, if the distortions and distractions introduced by lobbyists can be pruned back.

Zingales devotes considerable attention to the pernicious effects of lobbyists. He estimates the total spoils available from agricultural subsidies to be $11 billion. He then estimates payments to lobbyists and campaign contributions at $6 billion, and marvels that we do not experience even more K Street activity that we do. A public interest has little chance in such a climate. But enhanced regulation of influence peddling is no solution -- as the very prophylactic measures are themselves certain to be captured. Rather we need to cultivate stronger public morality -- what Zingales calls 'civic capital.' This may be deployed by virtuous lobbyists - or by emergent academic muckrakers.

Zingales clearly loves the academy -- but the American academy does not escape his critique. Here too he sees insidious signs of capture. Among the most compromised are his fellow economists, who are even more likely to pursue unrestrained self-interest. There exists of course easily identified opportunists, who provide congenial research results for their corporate masters. More insidious of course are the subtle and indirect influences exerted on less cynical, though more vulnerable academics. Academics are a large part of the problem -- but are also, for Zingales, a potential solution. A public-regarding academic (of the muckraking sort) could (perhaps) countervail the work of the lobbyists. And of course Zingales offers himself -- and this book -- as an example.

He examines the familiar terrain of the recent financial crisis -- and finds unrestrained 'crony finance' before, during and after. It was the Wall Street/Washington nexus that created the crisis -- through its aggressive embrace of risk, encouragement of irresponsible lending, and unbalanced housing policy. And it is the same nexus that designed the response: bailouts that left that structure intact.

In his quest for a new American populism, Zingales seeks to harness the anger underlying both the Occupy and Tea Party movements, yet better direct it toward meaningful reform. Zingales' stick is the possibility of shaming -- a technique that is occasionally successful in reeling in corporate excesses. His carrot is greater American prosperity -- which is certainly an attractive end to many, but by no means all. Zingales sees little advantage in the pursuit of redistribution. While he explores the new economy of superstars, he seems to accept winner-take-all as the natural order of things. In this, he is perhaps more Tea Party than Occupy, but that may be unfair. He is clearly more nuanced.

He has a host of policy fixes to sell: new models for corporate governance, a new Glass-Steagall for finance, tax reform. While he cloaks these proposals with the central arguments of the book, they seem little more than one policy-maker's clever reform ideas among many. His broader challenge -- to discover a viable roadmap to detach the American economy from rent seeking -- is less easily solved. More than the exuberant idealism of a Chicago professor will be needed.

A Capitalism for the People is longlisted for the 2012 Financial Times and Goldman Sachs Business Book of the Year Award.

Why Nations Fail - The Origins of Power, Prosperity, and Poverty by Daron Acemoglu and James Robinson

Acemoglu and Robinson's Why Nations Fail is a thrilling read. It proposes answers to grand questions: Why are some nations rich? Why are others poor? Why are there such great disparities? Their theory is seductive -- yet it ultimately fails to give much guidance as to what can be done.

The key to prosperity, in the authors' view, can be found in a nation's political and economic institutions. The operative distinction is whether these institutions are extractive or inclusive. The most successful countries will have inclusive political and economic institutions; the most desperate will be afflicted with extractive institutions. Prescriptions seem tantalizingly accessible at first: simply replace extractive institutions with inclusive ones. But this is not so easy, Acemoglu and Robinson caution.

Labeling the 'bad' institutions extractive (as opposed to the more symmetrical 'exclusive') is a nice turn of phrase. Economists use the term extractive to describe economies that exploit endowments of valued natural resources, such as oil, gold or Mr. Kurtz's ivory, that are literally extracted. But the authors intend to characterize the relationship between the elites and the masses; elites 'extract' power and wealth from human resources through oppressive political and economic institutions.

In proposing an institutional account of prosperity, Acemoglu and Robinson reject cultural and geographic explanations. There is nothing peculiar about Northern European Protestantism (despite Weber's assertion) that suits it to the accumulation of wealth -- and folks living in temperate climes are not more industrious (or if they are -- they are not more likely to be successful). Technology is also non-determinative -- as opportunities for technological progress are frequently rejected by extractive states. Inclusive states -- the authors argue -- tend to be more receptive to new technologies, and hence enjoy the welfare gains innovation throws off.

It is a nation's institutions that matter. But despite the focus on institutions, institutions themselves (of the excellent inclusive variety) cannot assure prosperity unless a nation also possesses an adequate degree of 'centralization.' Acemoglu and Robinson do not clearly develop the notion of centralization -- and there seems to be some lingering tension between inclusivity (which diffuses power) and centralization (which focuses it). Centralization does seem to be a prior-in-time characteristic to the development of inclusive institutions in the examples explored in the book -- there exists a centralized nation that precedes the evolution of an inclusive, and so perhaps wealthy, nation.

The authors document the presence of extractive institutions in poor nations and inclusive institutions in rich ones. They describe vicious and virtuous cycles, respectively. These cycles describe both the reinforcement of tendencies between political and economic institutions, as well as a nation's trajectory over time. Of course, there should be more to the theory that this -- or we would find most nations tending toward one or the other pole (depending on the character of their historic institutions), with rare reversals of national fortunes.

In fact, the authors acknowledge, there are mixed cases -- and the most important one is today's China, which displays stunning recent growth that is restricted by extractive political and economic institutions. The authors are sanguine about China's emergence as a superpower; rather they predict that China has or will soon reach inclusivity limits imposed by its elites in order to maintain extractive conditions. In the long run, the authors believe, authoritarian regimes will falter -- and they cite the Soviet Union as the prime example. Of course, China may change institutional course, unleashing a process of creative destruction (and reallocating wealth and power within Chinese society) that might keep China growing. But in the absence of institutional change, they view a Chinese slowdown as an inevitability. We'll see.

In many other examples, where the historical record is more complete, the authors make more persuasive cases. They offer illustrations where former European colonies retain the extractive institutional legacies of their former masters. Far too frequently newly independent states have been captured by indigenous elites that prefer to maintain their holds on power by permitting an opening of civic life that would bring both greater wealth and more dynamic politics.

The authors are quite modest as to claims of their theory's predictive power -- there are many contingencies that could push China (or any other state) toward or away from wealth-inducing inclusive institutions. Yet the authors are quite confident of the power of their theory in accounting for many historic cases of wealthy and impoverished nations. To admit the theory cannot predict is to concede that it fails to fully capture the causes of wealth; at best it can serve to identify necessary elements. But without knowing more of how these elements (inclusive institutions) interplay with other, yet unidentified factors, leaves the reader with some doubts as to how complete a theory this really is.

Why Nations Fail is longlisted for the 2012 Financial Times and Goldman Sachs Business Book of the Year Award.

What Money Can't Buy: The Moral Limits of Markets by Michael J. Sandel

In What Money Can't Buy, Michael Sandel decries the emergence of markets that displace older norms, "commodifying" earlier forms of social organization that better correspond to our (or Sandel's) ethical intuitions. Sandel is bothered by fast track lanes, priority boarding, sales of organs or surrogate mothering services, paying for grades, and what he describes as the "skyboxification" of American society. While there remain some things money cannot buy, many things can be bought today that in prior times were allocated using non-market norms.

Sandel views with alarm the increasing hegemony of markets -- where markets are the go-to policy prescription for every social want. If we wish to boost the performance of inner-city school children, we should pay them for academic achievement -- according to a market-line of thinking. There's a cost, argues Sandel, to the application of market notions to novel domains, as markets operate (through "incentives," a neologism that Sandel mocks) to displace other values, such as inculcating a love of learning, devoting oneself to one's children and savoring a sense of community. Markets intrude on moral domains and limit the scope for moral discourse -- and this loss is under-appreciated.

All true enough -- but in at least some cases non-market values have displaced markets. For much of its history, the draft had market features. One could buy one's way out of Lincoln's draft -- or find a replacement to serve. And during most of the Vietnam era, the wealthy could avoid the draft by remaining in school. The draft, of course, has been suspended for several decades, but it is hard to imagine its return in any form with buy-outs. There may be other examples where the relevant institutional shift is away from markets: it was much easier to buy one's way into an Ivy League school a generation ago than it is now (Sandel concedes that even now it may be possible for some to do so).

Sandel fails to give a consistent account -- across his varied and many examples -- of precisely where and when markets exceed moral limits. He writes of "corruption" or "degradation" as if there were discernible moral content to these notions, but they are but baskets for a variety of values. Now I am as horrified as Sandel is at the thought of a hunter killing a black rhino (or even more cruelly, a defenseless walrus) -- and instituting fees for the privilege and then putting the collected funds to good use fails to appease me. But I admit (as certainly Sandel would) that others might not share my moral objections. That is, his and my valuation of an animal's life might not be broadly shared. In a softer version of his thesis, I suppose Sandel would assert that the permission-conceding effect of resorting to markets forecloses moral discourse -- though I'm not sure that foreclosure always follows.

At times, his instincts seem to reflect a certain squeamishness. I simply am not bothered by the idea that my employer might take out an insurance policy on my life, and hence have cause to root for my demise (so long as it does not act on its interests -- a point Sandel recognizes). I do not see how this leads to a coarsening of our general regard for life.

Sandel does demonstrate (by several examples) the possible errors of market-thinking in domains where strong norms operate. He recalls Richard Titmuss's famous 1970 comparative study of blood collection, The Gift Relationship. In the United Kingdom, blood is given by unpaid donors who act from civic motives. In contrast, the United States largely (though not exclusively) relies on blood banks, where donors are paid. This leads to the commodification of blood donations, with the result that the blood supply in the United States is more expensive, more risky and less secure.

Better is Sandel's "skyboxification" argument, in which newly created markets function to separate us from one another. We have long used status symbols to mark our position in the social hierarchy, and reside in highly (economically) segregated communities. As our society drifts farther and farther away from an egalitarian ideal, we have new opportunities -- such as the skybox -- to enforce class separation at what had been fundamentally a communal event. But that abandonment of the public schools in this country seems to be a far more serious concern -- and threat to our sense of community -- than tolerating the wealthy (and often bored) to isolate themselves from the fans during athletic events. Here, the existence of markets undercuts our democratic opportunities, yet private schools are a given.

There are certainly many domains where markets are kept at bay. You cannot buy an "A" at Loyola Law School -- as least I do not believe you can.

What Money Can't Buy is longlisted for the 2012 Financial Times and Goldman Sachs Business Book of the Year Award.

Paper Promises: Debt, Money and the New World Order by Philip Coggan

As its subtitle suggests, Philip Coggan's book examines the relationship between debt and money and its implications for the 21st century economy. Coggan takes us through familiar territory (the nature of money) and familiar debates (Keynesianism vs. monetaristm), yet offers a novel framing that make this book a valuable read.

Coggan has an unusual view of the fundamental divide in political economy. Rather than seeing class struggle everywhere, Coggan treats the conflict between creditors and debtors as the central fracture motivating politics, though he notes that -- all things being equal -- creditors tend to be wealthier (and fewer in number) than debtors.

In speaking of debt, Coggan slides (perhaps too easily) between private and public debt. The debt that interests Coggan is the burgeoning debt that tends toward default (as opposed to the under-remarked debt that is extinguished by repayment in the ordinary course). This is the persisting debt that in usual times is rolled over upon each maturation. He writes of unsustainable debt -- again, both private and public -- that will of necessity lead to some degree of default. In the case of public debt, the default scenarios include -- importantly -- devaluation, a course open to most states to reset the exchange value of the money in which a debt is expressed and thus unilaterally reduce the value of the debt (as expressed in some other value, such as gold or a harder currency).

For most states, there is a limit to this strategy. Devaluation has consequences. It may throttle domestic expectations, igniting inflation. And devaluation -- in a global society -- has consequences, distributing at least some of the lost value to other countries (by readjusting the terms of trade) as well as to the disappointed creditors. Devaluation will also make future borrowing more difficult.

But -- of late -- there appeared the possibility for at least one country to escape the devaluation trap. The United States has enjoyed an extraordinary privilege, in that its currency seemed to be highly valued notwithstanding its horrific trade deficits. This reflects its historical (though waning) primacy in world economic affairs. What matters now is the role of this particular national money as place for storage of value: China (as do Japan and others) continues to re-funnel its vast export earnings into dollar-denominated obligations of the U.S. Treasury, thus keeping prevailing U.S. interest rates low. Exchange values may reveal more about capital flows than trade balances, Coggan argues.

This perceived signal within the U.S. economy is a green light for expansion. Prior to the 2007 financial crisis, this green light released a frenzy of asset acquisitions, including the real estate bubble. And even now, the continued low interest rates may serve to mask the severity of the U.S. debt crisis. Confronting the debt crisis may be postponed (though not avoided) through the simple expedient of increasing the U.S. money supply.

Money today is simply debt, Coggan reminds us. Money has been detached from its historic anchors (precious metals), as each sovereign seeks to discover the sweet spot between too little and too much money. The likely course is one of oscillation, where the costs of each extreme is regularly felt. Post-crisis austerity, while an upright policy, may lead to a downward spiral, as consumers pull back current expenditure to service debt (their own and, via taxes, those of the state), magnifying economic contraction. And too much debt can drive away the creditors -- the monolithic bond market James Carville fears -- as they come to believe that 'borrowing' is just a ruse to transfer their accumulated stores of wealth to others. Better to hoard (if that remains possible).

Moving debt into the future has been a viable strategy - but it resembles a Ponzi scheme, in that success depends in part of an increasing number of new players, the upcoming generations. Their ability to work off the burdens of their grandparents may depend on the prospects of their grandchildren, and so on. But the intergenerational strategy seems to have limits as well, as advanced economies (such as the United States, Japan and Europe) feature extremely low population replacement rates. In an odd way, pushing the U.S. debt back onto China (through a devaluation of the dollar against the renminbi) has both an international and an intergenerational aspect, given China's continued projected population growth.

Coggan paints a rather bleak future, involving inevitable U.S. decline. More crisis is ahead, as the mountain of public and private debt is either devalued or postponed - or results in outright default.