Editorial Review

Reviews

Interesting / Boring / Fascinating
I was made aware of this book when I heard one of the authors give an interview. Many of the topics in the interview weren't in the book, but a host of other areas where. The book is easy to read and well researched. However, it is very much written from a British point of view - so don't let the Americanized title of Soccernomics fool you. It mainly appears to be a book that hopes to explain to the English that they are not the most rabid fans nor the best players of the game they invented 150 years ago.

Some of the chapters were so absolutely fascinating, I couldn't stop reading. Other chapters were so ultimately boring that I skipped them. The good thing is that you can skip around and read each chapter independently without really losing any overall scope of the book.

Even though I didn't agree with some the conclusions and read the data differently, I certainly feel much more knowledgeable about the current game and how we got here. If you are a fan of soccer, you should seriously consider this fact-filled book. It will make for great discussions around the TV during next summer's World Cup.

Excellent Read and Offers Surprise Truths About The World's Game
Offers some very interesting insights into the world of soccer. While some compare it to Michael Lewis's "Moneyball", it differs in that "Moneyball" deals more with baseball at the micro level, while "Soccernomics" deals with soccer at a macro level. There is a lot of statistical analysis of national teams, but no analysis of individual players. In essence this is one of the difficulties of soccer, as it does not naturally lend itself to extreme statistical analysis like baseball does.

My main argument with the book is that it treats the NFL as the US's main export sport. While the NFL is undoubtedly the most popular league in the United States, this is a recent phenomenon. Baseball has traditionally been "America's Past Time" and thus is the sport that the United States spread around the world, although not to the same level that the English spread soccer.

One analysis that I wanted to read about was the success of Latin American teams. In particular an analysis of Mexico and Brazil. Both countries are soccer crazy and have very large populations, but Brazil has won five World Cups and Mexico none. It would be interesting to see an analysis of why this has happend, but the book mainly deals with European teams as their statistics are more reliable.

Best. Soccer. Book. Ever.
Simon Kuper is the long-time weekly sports columnist in the Financial Times, and he is one of the reasons I so look forward to reading the Weekend Edition of the pink paper. When I saw that he had authored a new book about soccer, and then saw more details about what the book would be about, I knew I just had to have it and ordered it here on Amazon at a very purchase-friendly price.

"Soccernomics: Why England Loses, Why Germany and Brazil Win, and Why the U.S., Japan, Australia, Turkey--And Even Iraq--Are Destined To Become The Kings of the World's Most Popular Sport" (336 pages) is co-written by Simon Kuper and Stefan Szymanski, a British economist. An economist, you might ask? Yes indeed, as this book brings a fascinating look into the numbers of soccer. Here a couple of quotes from the book:

-- "In 2002 everyone knew that the obscure, bucktoothed Brazilian kid Ronaldinho must have lucked out with the free kick that sailed into England's net, because he couldn't have been good enough to place it deliberately." (commenting on the English belief of freakish bad luck for their national team).

-- "Our finding: England in the 1980-2001 period outscored its opponents by 0.84 goals per game. That was 0.21 more than we had predicted based on the country's resources. In short, England was not underperforming at all. Contrary to popular opinion, it was over-performing."

-- "Soccer is not only small business business. It's also a bad one. Anyone who spends any time inside soccer discovers that just as oil is part of the oil business, stupidity is part of the soccer business."

-- "Provincial towns like Nottingham, Glasgow, Dortmund, Birmingham or Rotterdam all have won European Cups, while the seven biggest metropolitan areas in Europe--Istanbul, Paris, Moscow, London, St. Petersburg, Berlin and Athens--never have. This points to an odd connection between city size, capital cities and soccer success."

-- "Against all evidence, the stereotype persists that the typical British fan is a full-on Hornby."

-- "Staging a World Cup won't make you rich, but it does tend to cheer you up." (commenting on, among other things, the bogus arguments that staging a large sports event brings significant positive economic consequences for the host).

But if there is only one chapter that I had to pick out from this book, hands down it is "The Economist's Fear of the Penalty Kick", an absolute riveting look at the scientific side of the dreaded penalty kick. Using the analysis developed in game theory, the authors examine how penalty kicks are taken (by the kicker) and defended (by the keeper). It culminates with an in-depth analysis of the Manchester United-Chelsea penalty shoot-out at the 2008 CHampions League final. "Then, in what must have been a chilling moment for Anelka, the Dutch [keeper] pointed with with his left hand to the left corner. 'That's where you're all putting it, isn't it?' he seemed to be saying. Now Anelka had a terrible dilemma. This was game theory in its rawest form". (You'll have to read the rest of it yourself...)

Of all the books on soccer that I have read in my life time, I cannot recall being more enthralled and entertained than by this book. This is a page-turner from start to finish, and for me one of the very best books of the year, sports or otherwise. HIGHLY RECOMMENDED!

Smart, Intelligent, Soccer Writing
The most intelligent book on football ever written. A fascinating plunge that tackles the games misconceptions, dispossessing the perceived wisdom of the elites, and the fanciful hopes of the hopeless. Everything from the stretch including fascinating analysis of the link between suicide rates and a nation's soccer success, and the growing muscle of soccer in lands frozen out for decades. Read a cracking insight into the mind of Guus Hiddink, the Merlin of the modern game. Simon Kuper is an outstanding soccer writer, unmatched. Linking up with Stefan Szymanski, they've pulled on a winning strip with this book. A must have for all futbol fans.

Alan Black
author of Kick the Balls: An Offensive Suburban Odyssey

A Must-Read!: Well-researched, Humorous, Intelligent and Carefully Executed
I first came to know the name Simon Kuper when he was a guest lecturer at a local university in Toronto, Canada. The articulate British author talked about his new novel Soccernomics and some of the core arguments. Despite making some fascinating points about football, he looked uncomfortable and unable to answer some of the questions that the audience prosed in the Q&A period. I was greeted with a great deal of skepticism, but decided to purchase the book anyway.

After reading through the book, I can safely say Soccernomics is fantastic and a must-read for any soccer fan! Stefan Szymanski lives up to his billing as a top sports economist with thorough detail and Kuper fits the part with his commentary including tidbits of witty humour. Correlating statistical analysis with any sport is extremely difficult because you are attempting to satisfy the common reader without flattening the economic methodology. Kuper is to-the-point and articulate in his arguments. Most importantly, he does not make an argument, and then uses statistics to back up his perspective. Rather, he reads through the information, recognizes patterns, and creates a formula. Several fascinating chapters include Core to the Periphery (Guus Hiddink) and why England loses.

Despite the many positives, there are some flaws. At times, the economic analysis is overwhelming and seems suited more for a peer-reviewed journal than a book for the common consumer. As well, some of the variables are far too large (population, income etc) and rarely include common competing variables (other popular sports etc). Furthermore, Kuper is well-travelled and could integrate more of his personal experiences to add some `spice' to the arguments #Hiddink is an excellent example but we also know how he has done speeches at Fenerbah�e Spor Kul�b�.

Needless to say, these our not strong enough weaknesses to warrant it a 4-star. All in all, an excellent book and I would highly recommend it.

4.5/5

One of the top 5 or so books on soccer
A more robust, objective, quantitative approach to soccer is put forth by the authors to help dispel long-held myths and biases held in the game. I really enjoyed reading this book and gave it 5 stars despite some of Soccernomics' shortcomings. Perhaps it is because of this that this book can help generate interest and debate on objective analysis of soccer, similar to the evolution of Sabermetrics, first put forth by Bill James. In general, the authors succeed the most with their focus in the game off of the field, but their treatment of actual game tactics, besides penalty kicks, is answered for through an oversimplification that says that winning teams have adopted a Western European style, whatever that means.

This view ignores the extremely valuable quantitative tactical work done by Lobanovskyi at Dynamo Kyiv that called for a high-tempo pressing game, which developed alongside a similar playing style that focused on system designed to press opponents developed in Holland at around the same time in the 1970's. These two tactical ideas ultimately influenced Arrigo Sacchi to formalize this type of system at Milan in the late 80's and early 90's. The author gives the example of Olympic Lyon as the soccer version of the Oakland A's, but by adopting Sacchi's methods of pressing opponents, Chievo Verona, one of the poorest teams in soccer, was able to effectively compete in Serie A for several seasons, although has bounced back and forth between Serie A and Serie B in recent years. Regardless, Chievo's accomplishment is highly noteworthy, and food for thought for developing a more objective view of tactical systems, a potential topic the authors could touch on in a follow up book or academic paper.

The book also has two glaring inaccuracies that the book's editors overlooked, both of which are in the chapter about the NFL vs. EPL, although neither are anywhere close to fatal. First, Bradford played two seasons in the English Premier League, not one as the book suggests. They survived the 99/00 season on the skin of their teeth in an extremely exciting relegation battle, featuring the aptly named Bradford player Dean Windass saving the day. Bradford later would finish 20th in the 20 team division the following season and has been in free fall ever since. Note that I am not a Bradford fan, but will always remember Dean Windass's heroics. Second, the book suggests ties are not possible in the NFL. This is not true, although the frequency of such events are rare enough to render ties in the NFL almost non-existent. There are typically 1 or maybe 2 ties per season.

Brings conventional soccer wisdom to the level of flat-earth theories
This book totally changes the way you look at and think about football-soccer. It takes an armful of misconceptions and prejudices about the sport and subjects them to the cold analytical regard of economics and statistics. If that doesn't sound like fun, you're wrong. Is England really underperforming when it crashes out at the quarterfinal or semifinal stage? Does a team's loss really provoke suicides or is it possible that the game actually prevents a few? Why don't major European capitals win more Champions' Leagues? Why are major clubs like Man U and Barcelona located in industrial capitals? Does hosting tournaments really bring economic bonanzas to the host nation?

Having lived in Great Britain, I kept coming back to it again and again to it watching the "us against them" frenzy in the British media prior to the England-Germany match in South Africa. And after the match itself, I read the self-flagellating post-mortems about why English football is in decadence (lack of a winter break was one suggestion) with a slightly smug smile. The book is filled with other enlightening tidbits such as how the transfer market usually overpays for center forwards (Ibrahimovic's passage from Inter to Barcelona being a case in point) and confirms other facts you always suspected (direct correlation between the size of a team's payroll and performance in league tables). But singling out specific conclusions does not do it justice, because the pleasure consists in following the authors as they dissect conventional wisdom. Listening to soccer commentary after reading this book feels a little like reading Creationist tracts after Darwin. Will some of its light pierce the darker corners of sports journalism? Alas, probably not, but at the very least the book simply makes it more pleasant to think about the beautiful game. ... Read more

Editorial Review

With new material from the author

"Economic hit men," John Perkins writes," are highly paid professionals who cheat countries around the globe out of trillions of dollars. Their tools include fraudulent financial reports, rigged elections, payoffs, extortion, sex, and murder. They play a game as old as Empire but one that has taken on terrifying dimensions during this time of globalization." John Perkins should know-he was an economic hit man for an international consulting firm that worked to convince developing countries to accept enormous loans and to funnel that money to U.S. corporations. Once these countries were saddled with huge debts, the American government and international aid agencies were able to request their "pound of flesh" in favors, including access to natural resources, military cooperation, and political support. Confessions of an Economic Hit Man is the story of one man's experiences inside the intrigue, greed, corruption and little-known government and corporate activities that America has been involved in since World War II, and which have dire consequences for the future of democracy and the world. ... Read more

Reviews

No proof required
Many of the reviews here refute the truthfulness of this book because Perkins does not provide evidence for every one of his claims. But, this is precisely what makes the book an exciting and fast read. How can Perkins be expected to provide evidence for influencing events in other countries? Where should we expect to find documentation of these nefarious deeds? The inner workings of organizations like MAIN, Halliburtion, and Brown & Root are only ever known when a dissenter arises.

From my perspective, it all seems to add up. I lived in Ecuador in the 80s. I was young (18), and I didn't know much about politics at the time. I personally saw many of the projects that Perkins speaks of in this book. I heard the complaints from my Ecuadorian friends about how the U.S. was bankrupting their economy by "loaning" money for extensive construction projects. I saw the jungle along Rio Napo being deforested by unknown (to me) companies. I spent time in oil towns in the jungle -- like Shell. I saw the dam that Perkins speaks of in his book.

The only way to gather proof about the truthfulness of his claims is to see it first hand. Though I seriously doubt that most of us have the guts to travel to the places where these things happen. Denial, regarding these issues, seems terribly naive.

For History look elsewhere, for a sound, engaging critique read it.
John Perkins was interviewed by Leonard Lopate on WNYC Radio in New York. You can listen to the interview and make your own decision about John's book.

http://www.wnyc.org/shows/lopate/episodes/11082004

Note: Although many other books have been written about how U.S. aid policy has been used as a means of manipulating foreign countries, the fact remains that John Perkin's book is from an insiders perspective. It exposes the truth behind how corporate greed has hijacked U.S. Foreign Policy. You can find many more books on the facts and history but for a sound, engaging critique read it.

The personal illuminates the global
It is often the personal stories that tell the bigger truths. As with Barbara Ehrenreich's intensely personal Nickel and Dimed, Perkins' story illuminates a larger picture in a way that more scholarly treatises cannot match. I value the perspective I get from Noam Chomsky and Chalmers Johnson and many others who have written about our modern empire. None of these works, though, explains it from the ground up. Perkins does that.

In this book, written in spurts since the early 1980s, Perkins really does tell it like it is. This is the book I have been waiting for, the book that fills in the blanks left behind by the writers of global theories, the book that tells us how it really happens. It is one thing to read that the United States engineered ousters of democratically-elected leaders who did not do the bidding of our corporations. It is another to read of the actual steps that led to these actions. As one who likes to be able to visualize all the steps, I found great comfort in reading a well-written personal story that allows me to do this.

In this rightly-named confession, Perkins puts on his hair shirt and chastises himself as he explains how he gave in to temptation again and again over several decades, while he worked to build an American corporation's profits at the expense of third-world countries. He does not describe in detail the benefits he accrued from being Satan's handyman. We do not hear stories of his exploits with women, of his flaunting his power, the meat of a LifeTime movie. These fruits of his labor are glossed over in favor of greater descriptions of the occasional pangs of conscience.

Take it as a given, then, that Perkins was right for the job of economic hit man because he was so easily tempted by material wealth, power, and adulation. There was, in his character, though, a little hint of conscience. He was interested in the world's people, happy to learn other languages and ways of living, open to old as well as new ideas. Thus he was able to make a more honest comparison of the world according to global corporations and the world as seen and lived by indigenous people. And he was able to see that his work only benefitted the few. There was in him, as well, the radical view that a benefit to the few was not much of a benefit.

I can see this story translated successfully to the big screen; either as a documentary or as the story of one man. Two very different films; either would be dramatic and informative. There are scenes in this book that could have come from a Graham Greene novel (and let's not forget that Greene tells the truth through fiction): clandestine meetings, sudden flights to escape uprisings, epiphanies on the beach. By its nature, a memoir of this type cannot fully be documented. To the extent that it could be, it is, with many pages of notes and references. These private memories, though, may never be proven to be either true or false.

It is my greatest wish that Perkins is telling the whole truth all the way through. Even the smallest of fibs could tarnish a work of great importance, given our media's inability to see bigger pictures.

The real message, though, is clearly written and inescapable: this is not the story of "they", a "they" that can simply be removed from power. It is the story of us.

Well Done expose on USA international subterfuge
I was intrigued by this book inasmuch as I worked in the international export field for several major American corporations. I had the benefit of traveling to most of the countries that were discussed in Perkin's book. Also, I was stationed in the Panama Canal Zone with the US Army in the early 1960's. In addition, I was born in Central America, and my father worked for the infamous United Fruit Company. To say the least, I agree with Mr. Perkins in most of his expose. Export products that I shipped overseas were often financed by USAID, WorldBank, or some other international lending agency. And of course, the USA was the prime funder of these organizations. Eventually, I was sent into some of these third world countries, and I was exposed to the working class as well as to the upper crust of these societies. If you had to get to the nitty-gritty of this tale, you would have to think about Darwin's theory of "Survival of the Fittest." Ultimately, the USA will throw its weight around as long as it has the military muscle to do so. Unfortunately, history tells us that all world empires collapse, and the USA will follow that trend lend. There are no exceptions to this as history has recorded thus far. Surely, there must be a better way for capitalism to thrive, and the USA even with good intentions is like an elephant in a china shop. In all my years of growing up in America, I found that most Americans know so very little about their external world outside of their own country. While most Americans think of themselves as the "good guys in the white hat," Perkins book will dispel that notion. And, rightfully so!

American Centurion comes clean; sets example for us all
I got Confessions of an Economic Hit Man yesterday and finished reading it today. It's a vital personal story that illuminates an entire global system. A system based on greed, power, and control. Others before Perkins have warned of this system, but usually not from an insider's perspective. If you're interested in more details David Korten has done the best job documenting how rich powerful corporations with the help of governments get richer at the expense of the poor who get poorer. This isn't a new idea. But in today's world, the major media refuse to report this story. Perkins understands the essence of the problem: empire, oppression, inequality, and greed can seem to bring benefits to some people in the short term ... but in the long term we all loose, even the rich. We are all spiritually harmed by the lies and rationalizations. We are all put at risk when the world becomes more polarized into haves and have-nots. Our humanity is undermined when we benefit from that which hurts others. Undoubtedly most perpetrators have convinced themselves that what they do is OK and even that they'll be able to avoid consequences. Their money and power will insulate them in their exclusive gated communities. John Perkins' real feat in this book is not exposing a corrupt system, but in providing an example of one person who was able to look into his life with a deep honesty and realize it was hurting him as well as prospects for the future of all people. All of us can learn from his awakening. Does driving a big SUV make us more secure? Happier? A better person? A better citizen?

Excellent balance between personal story and history
This book is at once an autobiography, a 20th century history of America and a call to action. These elements are balanced very well with a very readable narrative style.

The history in this book is somewhat controversial. It is the less-shiny aspects of history which may or may not be taught in US schools (I will not make assumptions here), but which is easily accessible if one only looks for it. It is also quite well-documented and supported by evidence. Perkins discusses American corporate and governmental involvement with Saudi Arabia, Indonesia, Nicaragua, Panama, Ecuador and many other nations from a first hand perspective.

What is interesting is that we see this history as the setting for a very personal story, through the eyes of a participant. As the title suggests, it is in fact a confession. Perkins was an important player in some of the darker aspects of subtle non-governmental foreign policy, and he is not an apologist.

He shows a little bit of the psychology of people who commit evil acts on behalf of organizations to which they belong. For example, structures set up to do harm can generally find people with the personality characteristics that can be capitalized upon - greed, ambition, etc. What this means is, rather than simply provoking hate towards individuals who are perpetuating exploitation, Perkins reveals the underlying broader issues, such as the consequences of the misuse of power and profit. I think he very effectively places the specifics of historical facts (as well as his story) in context in a way that historical texts typically do not.

Although it is not a prescriptive book as such, Perkins does offer some ideas and suggestions at the end as to what individuals can do if they believe in trying to ameliorate the situation he has presented.

I found it to be both a compelling page turner and very factual at the same time. Highly recommended for the history buff, social activist, avid biography reader, news junkie, or really anyone who cares about the world we live in.

~a global transformation~
Confessions of An Economic Hit Man is one insiders view of how the global empire has successfully created itself to keep the cycle of U.S. wealth, self serving. John Perkins has found the courage to share this dark past in hopes that it is not too late for us to change our dreams and re-shape with immediacy the future of this planet.

Those who express disdain or lack of evidence of this greedy global game have clearly missed the point.

John Perkins offers the reader an informative and enticing journey through the shifty ways of economic and political manipulation. Caught within the web himself, this book clearly calls attention to our individual responsibilities in our daily actions, no matter what we do or where we live.

What I find so courageous about this book is John Perkins had clearly shape shifted himself away from the greedy world of EHMs into a life of helping indigenous peoples in the world: specifically the Shuar of the Amazon. In unveiling these hidden dark truths, he is now fully owning his past actions. It is with this level of accountability that we are able to create new openings for global transformation. Read his other books. You may understand what he speaks of in a different depth.

This book is about changing our dreams. It is a wake up call to change our intentions. It is deeply concerned for the future. Simply put...it is about caring for the world's children, every one of them, today.

Spell binding and insightful
If you care what happens to our world read this groundbreaking book. John Perkins tells, as only an insider can, the truths about our goverment system. His courage and insight is truely heroic. ... Read more

Editorial Review

START-UP NATION addresses the trillion dollar question: How is it that Israel-- a country of 7.1 million, only 60 years old, surrounded by enemies, in a constant state of war since its founding, with no natural resources-- produces more start-up companies than large, peaceful, and stable nations like Japan, China, India, Korea, Canada and the UK?

With the savvy of foreign policy insiders, Senor and Singer examine the lessons of the country's adversity-driven culture, which flattens hierarchy and elevates informality-- all backed up by government policies focused on innovation.In a world where economies as diverse as Ireland, Singapore and Dubai have tried to re-create the "Israel effect", there are entrepreneurial lessons well worth noting. As America reboots its own economy and can-do spirit, there's never been a better time to look at this remarkable and resilient nation for some impressive, surprising clues. ... Read more

Reviews

Israeli exceptionality in contributing to global technological progress
There is a growing literature which speaks of the distinctiveness of Israel and its unique contribution to global culture. I think most recently of George Gilder's outstanding 'The Israel Test'. No doubt one impulse for the creation of such books has been the worldwide campaign to delegitimize Israel, as prelude to physically destroying it. Thus the very pro- Israel books come in a way as contributions to the justification of the Jewish state, and as defense of it. What is of course distressing about this, and the need for paeans to Israeli exceptionality is the fact that Israel is the only country in the world which is required to 'justify' its existence in this way.
In any case this present book focuses on Israel's scientific and even more technological achievements. It speaks about the Israeli reaction to the Arab boycott, and the special situation of 'confinement' Israelis feel at not having normal access to neighboring countries. Israel is a very small country physically and thus many have a certain claustrophobic sense , especially those youngsters who have served in the Army. After the Army many young people adventurously use their new - found freedom.
Two forms of this are the trekking Israelis do throughout distant regions of the world, with special emphasis on South America, and the India- Nepal region, and the 'tech-ing' Israelis do in creating start-ups at a rate all out of proportion to their numbers in the world. Israelis have hooked into high- tech communications and rode on the wave of a world economy which is increasingly electronic.
The start- ups too come in part because of an encouraging government policy, which devotes a high proportion of funds to research. But they also come because Israelis are a people continually forced to find non- conventional answers to very difficult and unusual problems.
For any supporter of Israel, and I assume that this is the real audience of this book, this book will be a real pleasure. It will provide yet more evidence of how one small state manages to make real contributions to the global economy, and the scientific and technological progress of mankind.

Spectacular insights into building an entrepreneurial society
As a serial entrepreneur, VC and angel investor, and teacher of entrepreneurship for many years, I am enthralled by "Startup Nation". It is a fascinating story of how Israel has succeeded disproportionately to its size and certainly to its geographic situation. It teaches valuable and unique lessons about region building and industry building. The principles of the country that stimulate individual entrepreneurial behavior in the military, in agriculture, and especially in high technology are lessons for all. I have shared the book with several leaders of industry and finance who have seen it as a remarkably interesting read.
Congratulations to the authors.

Edward Roberts
Professor of Management of Technology, MIT Sloan School of Management
Founder and Chair, MIT Entrepreneurship Center

An enjoyable read
This is an enjoyable read that highlights how Israel has come to become such a leader in high tech startups. It is quick, light reading that explores the historical and cultural aspects that lead so many Israelis to pursue entrepreneurship.

In Israel, it seems, there is a culture that embraces the questioning of authority, a flat hierarchical structure across society, and risk seeking behavior. For those who have traveled to Israel, these notions will not be unfamiliar to you. Furthermore, the book explores how the contacts made during mandatory army service serve as valuable social networking tools later on.

The book was exactly was I was hoping for. It is written for the layperson, and did not read like an academic journal. While most books about Israel focus on its conflict with the Palestinians, this book only brought up politics and conflict as it pertained to the subject at hand, and didn't editorialize in the process. Furthermore, the multitude of stories and vignettes made it a engaging read that held my interest for the time I sat reading it.

Where did all of Israel's innovation and entrepreneurship come from?
In 2001, what started as a long discussion between Dan Senor, adjunct senior fellow for Middle East studies at the Council on Foreign Relations and Saul Singer, a columnist and former editorial editor at the Jerusalem Post, morphed into an excellent book, Start-Up Nation: The Story of Israel's Economic Miracle.

Senor had led a group of twenty-eight Harvard Business School classmates to Israel to explore Israel's economy, politics, and history. It was a time when there was considerable business opportunity in Israel but also, it was when the peace process collapsed and there was escalating insecurity. At the end of one week, many of the participants were asking, where did all of Israel's innovation and entrepreneurship come from? Senor and Singer didn't have an answer and furthermore when they tried to find some book explaining what made Israel's start-up scene so vibrant and seemingly impervious to the security situation, they came up empty-handed. Thus, they decided to write their own book that would try to answer what makes Israel so innovative and entrepreneurial?

Part of the answer to this amazing phenomenon, and as pointed out and exemplified in the book, is Israel's tight proximity of great institutions of higher learning, large companies, start-ups, and the ecosystem that connects them. The latter includes everything from suppliers, a fantastic pool of well-qualified engineers, and venture capital. In addition, and one very important element, is the important role of the military in molding future business leaders and innovators. It is the IDF that fosters a culture of chutzpah and critical, independent thinking that distinguishes the Israeli entrepreneur from their competitors. It is also the IDF's R&D funds that is pumped into the most sophisticated military hardware and software that eventually finds its way into the civilian economy, both in technologies and human resources.

Other factors include Israel's isolation or as one of its business leaders, Shai Agassi stated, by isolating Israel, its adversaries had actually created the perfect laboratory to test ideas. And when you look at the patents registered by Israel from 1980 to 2000 which numbered 7, 652 as compared to the combined total of 367 from Saudi Arabia, Egypt, Kuwait, United Arab Emirates, Syria and Jordan, you can't help being impressed. It is little wonder that technology companies and global investors such as Google, Cisco, Microsoft, Intel, eBay have entered the Israeli market discovering unique combinations of audacity, creativity and drive. As the authors mention, Israel has the highest density of start-ups in the world, "a total of 3,850 start-up, one for every 1,844 Israelis." In addition, more Israeli companies are listed on the NASDAQ exchange than all companies from the entire European continent.

However, as Senor and Singer argue, all of the above does not fully explain Israel's success. What Israel also has is "a cultural core built on a rich stew of aggressiveness and team orientation, on isolation and connectedness, and on being small and aiming big." This is something that is lacking with some of its competitors as Singapore or Korea.
Quite interesting is that the original Israeli settlers were pioneers creating a country from nothing, whose milieu was socialist and profit was a dirty word. Today's Israeli entrepreneur is likewise a pioneer and their new narrative is about creating things for the world in a variety of fields-"You're not just trading in goods, or you're not just a finance person. You are doing something for humanity. You are inventing a new drug or chip."

Apart from Israel's successes, the authors also explore why American innovation industries have not taken full advantage of the entrepreneurial talent of the U.S. military training and experience, why the Arab world is having difficulty in fostering entrepreneurship, and what are the challenges that Israel faces in maintaining its brilliant economic miracle.

Very often books of this nature digress into pages crammed with all kinds of graphs and statistics that, to put it bluntly, are just plain boring. However, Senor and Singer avoid this with an entertaining prose style, bolstered by meticulous research and many first hand interviews with people in the know.

Norm Goldman, Publisher & Editor Bookpleasures

A very good book on industrail policy
Even though I am very far from being an Israeli fan, I sincerely enjoyed this book. OK, it is too much Israeli marketing&PR, but what can you say: it is legitimate. Despite the fact that I was intimidated until almost page 100 by authors' delving too much into the "goodness" of Israeli armed forces, and almost glorifying the neighbour-bashing Israeli army and air forces, I still kept reading the book which, in the end, turned out to be a very fruitful endeavour.

This is a good book. It provides a very nice vision for those who are interested in economic development, industrial policy and especially innovation/entrepreneurship policy. There are invaluable hints regarding those topics, however much they are hidden in between the lines. Nevertheless, as I said, the tips are invaluable and very teaching.

The main question I had in mind while reading the book was whether I could take home some of the experiences and lessons described in the book. Some definitely cannot be imported. They are those idiosyncratic things which are very much Israeli and Jewish-specific:

- For example the role of Jewish diaspora and the resultant "connectedness" that came with it,
- the geographical positioning of Israel, the 'culture' of Israeli jews,
- war-related chance-based motivations,
- reverse Jewish brain-drain en masse and
- the never ending US-support of Israel (though, in the book, you hardly trace any mention of this tremendously important fact, which I believe, is a major bias of the book).

There are, however, many other factors that you can take home regarding innovation and industrial policy, like:

- The importance of talent & human resources,
- critical roles of cross-training, of
- venture capital financing,
- multidisciplinary approach to business problems,
- proximity of the elements of an ecosystem,
- of sense of community membership for the success of business clusters, and
- culture of risk-taking, failure-welcoming and 'chutzpah'.
- Also very important is the book's verification of the positive and critical role of government intervention in a country's entrepreneurial push and economic development.

Those are very valuable aspects of the book.

Moreover, the book is also very enlightening for those people like me who have very little knowledge about Israel and never interested in learning about that country's inner workings. Because, while you read with a focus to find clues regarding innovation and entrepreneurial policy, you learn the history, predicaments and some aspects of the inner workings of Israel's economic system. This, I personally found very interesting; kind of buy one, get one free.

In a nutshell, even though this is a deliberate 'marketing' effort for Israel, it is still a very valuable book for those interested in industrial, entrepreneurial and innovation policy. It is, however, not at all a guide for company-specific innovation policies and certainly NOT a business-related book.

Beyond Clusters
Beyond Clusters: Review of Dan Senor & Saul Singer, Start-Up Nation: The Story of Israel's Economic Miracle (Twelve, 2009).
Ari Applbaum
December 2009

I wrote my first business plan in high school. The two-page plan (perhaps an overstatement) was promptly filed and forgotten instead of pitched to investors. The concept of offering free internet access to attract an audience for highly targeted advertising was later "stolen" by California-based NetZero, a company once valued at three billion dollars. This type of Chutzpa, a teenager's audacity to think he could reinvent the way people connect to the Internet, is not uncommon in Israel.

But why? Why does Israel produce "more start-up companies than large, peaceful and stable nations like Japan, China, India, Korea, Canada and the United Kingdom?" Why is it that "after the United States, Israel has more companies listed on the NASDAQ than any other country in the world?" These are the questions Dan Senor and Saul Singer set out to answer in their short and intriguing book.

Senor and Singer begin by asserting that the answer "it's simple - Jews are smart, so it's no surprise that Israel is innovative" will not suffice as it "obscures more than it reveals". Instead they offer a thesis based on the Cluster Theory of Harvard Business School professor Michael Porter. Porter's clusters are "geographic concentrations of interconnected companies, specialized suppliers, service providers, and associated institutions in a particular field,(1)" in Israel's case, high-tech. The closeness and interconnectedness of such institutions help foster innovation and economic growth. The authors demonstrate throughout the book how Israel serves as a cluster, if not The Cluster, of high-tech. The three main players that form this cluster, in addition to the business sector, are the Israeli government, universities, and military.

The government encourages immigration and investment in research and development. The investment is both ample (per capita, Israel spends more than any other country on civilian R&D) and smart. The authors cite for example a 16-year old, government-funding program which incentivized investors and effectively gave birth to the country's startup boom in the 1990s.

Israeli universities are world-class scientific research centers which create scientists who naturally find a home in the business sector. In 1959, with the creation of Yeda - the Weizmann Institute of Science's technology transfer company - Israeli academic institutions pioneered the practice of commercializing academic discoveries. This is a particular strength of Israeli universities today.

The unique element in the cluster might be the military. Senor and Singer explore the IDF's significant role in producing innovation. Elite intelligence and technology units train many of the next generation's entrepreneurs. Combat units empower Israelis to make split-second decisions and both assume awesome responsibilities and challenge -rather than blindly obey - their superiors. Compulsory military service is where future business relationships are made and reserve duty is where they are maintained. CEOs don't turn up their noses but seek out veterans and value their experience. The authors survey the birth of Israel Aerospace Industries (IAI) as a case study highlighting the security industry's role as a growth engine for other industries, and how security technologies often migrate into the high-tech industry.

This cross-pollination between government, academia, military and the business sector greatly contributes to Israeli innovation. But the heart and soul of the cluster is Israeli society. The interconnectedness between these institutions works primarily because of Israel's small size and close-knit society. Israeli startup veteran Yossi Vardi's statement that "everybody knows everybody" in Israel is a clich� but not without some truth. But there's more to it than size.

"The greatest contribution of the Jewish people in history is dissatisfaction," Shimon Peres tells the authors. "That's poor for politics but good for science." Peres notes that when a new shipment of the latest technologies arrives from the U.S, within five minutes Israelis are taking it apart and trying to improve. This is true throughout Israeli society. Israelis are constantly inventing and reinventing, thinking and rethinking, trying to improve themselves and everything around them. Additionally, Israelis are not afraid to fail, and most possess the right balance of personal ambition and an individualistic drive with a spirit of collaboration and sense of community. These are all critical success factors for a healthy startup culture.

Try as they may to steer clear from the "Jews are smart" theory, Senor and Singer end up recognizing that the unique conditions of Israel as a Jewish State and Israelis' unique sense of purpose that results are the core of Israel's success as a startup nation. The personal and professional journeys of Israelis Shai Agassi and David Frohman are prime examples. Had Shai Agassi stayed in California, he would have likely been appointed the next CEO of SAP, one of the most lucrative and sought-after jobs in Information Technology. But Agassi, whose story is told in great detail in the book's introduction, decided to help free Israel and the world from oil dependency. An ardent Zionist, he launched Project Better Place, the most ambitious electric vehicle project in history, and chose Israel for his pilot site.

David Frohman helped build Intel from the ground up in California. The obvious career choice for him was to stay put and benefit from Intel's growth and success, yet Frohman returned in 1974 to the Jewish State to realize the then improbable vision of turning Israel into a world leader in chip design. During the 1991 Gulf War, with missiles falling on Israeli population centers, Intel instructed Frohman to "do whatever you must do." Why did Frohman keep Intel's plants open? And why would Intel employees choose to continue showing up to work, as the authors note, "the more brazen the attacks, the larger the turnout?" Senor and Singer answer in a single word - davka, a unique Hebrew word loosely translated as to spite'. Israelis possess a sense of purpose that drives them to thrive davka in the face of security threats and adversity.

After 242 pages of an easy and enjoyable read, one realizes that the answer to the authors' question was hiding in the book's title all along. Israel does not just produce startups, it is a startup. Israel is a young, entrepreneurially spirited, small yet fast-growing, fast-paced, nimble, impatient, risk-taking, anti-hierarchical, creative and - perhaps most importantly - successful startup. If Zionism was a daring two-page business plan (with Herzl as a starry-eyed entrepreneur knocking relentlessly on doors of European venture capitalists), then Israel is its equally unimaginable successful outcome. Today, "The new pioneering Zionist narrative is about creating things," entrepreneur Erel Margalit tells the authors. Startups are not grown in a vacuum; they need the right breeding grounds, an incubator, if you will. And what better country to serve as a startup incubator than a country that is a startup? Therein lies the author's main revelation.

Senor, a former Deputy White House Press Secretary, and Singer, a Jerusalem Post writer, and are first and foremost excellent storytellers. What makes the book a must-read are the dozens of anecdotes and case studies. The authors' two comprehensive rolodexes translate into more than 100 top-quality interviews. They spoke with senior Israeli officials such as Prime Minister Benjamin Netanyahu and President Shimon Peres, met with chief executives at Google, Cisco and Intel, and interviewed military experts, Jewish historians, and some of the key figures in Israel's venture capital and high-tech scene, including Erel Margalit, Chemi Peres, Yossi Vardi, Jon Medved and many others. The outcome is fascinating. The authors' access to industry experts also brings to light lesser known tales, such as the account of a power struggle between Intel Haifa and Intel Santa Clara, which may be the highlight of the book. Senor and Singer unveil a 2003 drama, little known outside the semiconductor industry, in which Intel Haifa managed to save the company and perhaps the entire industry from an almost certain downfall by thinking out of the box and using Israeli chutzpa to relentlessly force senior executives into a paradigm shift.

It is not clear who the target audience is for this book. First and foremost, the authors hope it will become the ultimate playbook for CEOs, a compilation of lessons American executives can learn from Israelis about innovation. Senor and Singer quote HBS Professor Jon Kao, who says that the United States is "rapidly becoming the fat, complacent, Detroit of nations." The authors repeatedly state that America has much to learn from Israeli innovation but struggle to find exportable lessons and end up focusing mostly on what is unique to Israel. Consequently, their recommendations seem forced and not completely hashed out. They derive from the Israeli experience, for example, that mandatory service - either in the military or in some sort of national service - could help foster innovation. But what would this system look like? How would this affect the deeply-rooted capitalist ethos of American society? These questions remain unanswered. Perhaps the book is meant for business students. It is certainly not academic, but Senor's HBS background and investing involvement are apparent through the use of business jargon and academic theories. It is not implausible that a chapter would be used by professors in the field of business innovation, but more than that is unlikely. Most seriously, the authors touch upon but do not offer an adequate explanation of how to take startups to the next level and create larger, viable corporations that thrive over time. Israel may have the same problems.

The book clearly tries to appeal to Zionist audiences. The Jewish authors are unabashedly Zionist and are clearly ideologically motivated. Singer dedicates the book to his brother, an officer in the IDF who was killed in Lebanon. Senor dedicates the book to his father who helped start the Weizmann Institute's pioneering solar energy research program. While the authors need not completely distance themselves from the subject matter in such a book, at times it reads like a Ministry of Foreign Affairs or an "Invest in Israel Hasbarah" (Israel advocacy) book. Their juxtaposition of Israel with Gulf States is helpful in highlighting why growth without civil liberties, creativity, and an engaged population cannot build a cluster of high-tech innovation. But the authors seemed to have too much fun with the analogy, as if to say "look what Israel can do and its Arab neighbors cannot." As a Hasbarah piece, it is indeed the long-lost, mature, sophisticated and beefy cousin of the Israel21Cs and "Israel invented the Cell Phone" burgeoning positive messaging resources, but that's the problem: by definition it isn't a Hasbarah project.

The average business student might enjoy the book as light reading, but it is not likely to be assigned as an academic textbook. CEOs might read it to learn lessons from the stories told, but it falls short of becoming "a playbook for every CEO." There is too much technological jargon for non-techies and at the same time it is probably too journalistic for industry insiders. And for those interested in innovation outside the Jewish/pro-Israel community, the book's Zionist focus might be too hard hitting.

It is impossible to understand Israel as a startup nation without examining the many components that make it so. While there is something for everyone in the book - academic, businessperson, Zionist, technologist and story lover, it is the possibly rare reader who combines all of the above who would take greatest pleasure in the book. That may imply a narrow readership - although I can think of at least one now-post high school business plan writing Israel advocate who thinks it's a must read. There may also be seven million other potential readers, Israeli entrepreneurs who fuse many interests to form an entrepreneurial spirit. But if the authors are right in asserting that all those interested in innovation could stand to benefit from following Israel's entrepreneurial model, this book may be a good place to start.

i Harvard Business School - Institute for Strategy and Competitiveness Web Site - [...].

Exciting, untold story
This book showed me another side to the whole middle east story. It's not just wars and terrorism. There are vibrant, creative, and entrepreneurial activities going on that more people should be aware of.
Also, a great read for anyone thinking about creating a new business. ... Read more

Editorial Review

The New York Times bestseller: "A lucid account" (New York Times) of the recent financial crisisand the way forward by the Nobel Prize-winning economist, with a new afterword.The Great Recession, as it has come to be called, has impacted more people worldwide than any crisis since the Great Depression. Flawed government policy and unscrupulous personal and corporate behavior in the United States created the current financial meltdown, which was exported across the globe with devastating consequences. The crisis has sparked an essential debate about America’s economic missteps, the soundness of this country’s economy, and even the appropriate shape of a capitalist system.

Few are more qualified to comment during this turbulent time than Joseph E. Stiglitz. Winner of the 2001 Nobel Prize in Economics, Stiglitz is “an insanely great economist, in ways you can’t really appreciate unless you’re deep into the field” (Paul Krugman, New York Times). In Freefall, Stiglitz traces the origins of the Great Recession, eschewing easy answers and demolishing the contention that America needs more billion-dollar bailouts and free passes to those “too big to fail,” while also outlining the alternatives and revealing that even now there are choices ahead that can make a difference. The system is broken, and we can only fix it by examining the underlying theories that have led us into this new “bubble capitalism.”

Ranging across a host of topics that bear on the crisis, Stiglitz argues convincingly for a restoration of the balance between government and markets. America as a nation faces huge challenges—in health care, energy, the environment, education, and manufacturing—and Stiglitz penetratingly addresses each in light of the newly emerging global economic order. An ongoing war of ideas over the most effective type of capitalist system, as well as a rebalancing of global economic power, is shaping that order. The battle may finally give the lie to theories of a “rational” market or to the view that America’s global economic dominance is inevitable and unassailable.

For anyone watching with indignation while a reckless Wall Street destroyed homes, educations, and jobs; while the government took half-steps hoping for a “just-enough” recovery; and while bankers fell all over themselves claiming not to have seen what was coming, then sought government bailouts while resisting regulation that would make future crises less likely, Freefall offers a clear accounting of why so many Americans feel disillusioned today and how we can realize a prosperous economy and a moral society for the future. ... Read more

Reviews

Excellent and Credible Insights!
Stiglitz believes that markets lie at the heart of every successful economy, but do not work well without government regulation. In "Freefall" he explains how flawed perspectives and incentives lead to the 'Great Recession' of 2008, and brought mistakes that will prolong the downturn.

Between 1996-2006, Americans used over $2 trillion in home equity (HELOC) to pay for home improvements, cars, medical bills, etc., largely because real income had been stagnant since the early 1990s. Economic recovery requires that we repay the remainder of these amounts, overcome stock market losses (10% between 2000-2009), the loss of some 10 million jobs, and reductions in credit card balances, and find an equivalent amount to the former home-equity sourced financing ($975 billion in 2006 alone - about 7% of GDP) to finance another consumer-driven GDP upturn - without the prior boom in housing and commercial building. Stiglitz also points out that the Great Depression coincided with the decline of U.S. agriculture (crop prices were falling before the 1929 crash), and economic growth resumed only after the New Deal and WWII. Similarly, today's recovery from the Great Recession is also hampered by the concomitant shift from manufacturing to services, continued automation and globalization, taxes that have become less progressive (shifting money from those who would spend to those who haven't), and new accounting regulations that discourage mortgage renegotiation.

Stiglitz is particularly critical of the U.S. finance industry - its size (41% of corporate profits in 2007), avarice (maximizing revenues through repeated high fees generated by over-eager and over-sold homeowners needing to refinance adjustable-rate mortgages that repeatedly reset), and 'sophisticated ignorance' (using complex computer models to evaluate risk that failed to account for high correlation within and between housing markets; 'eliminating risk' through buying credit default swaps from AIG - blind to the likelihood AIG could not make good in a housing downturn), and excessive risk (banks leveraged up to 40:1 with increasingly risky mortgage assets - 'liar's loans,' 2nd mortgages, ARMs, no-down-payments; taking advantage of the 'too-big-to-fail' and 'Greenspan/Bernanke put' phenomena). Much of this behavior was driven by lopsided personal financial incentives (bonuses) - if bankers win, they walk off with the proceeds, and if they lose, taxpayers pick up the tab. However, to be fair, any firm that failed to take advantage of every opportunity to boost its earnings and stock price faced the threat of a hostile takeover.

The impact of mortgage defaults is greater than one would otherwise expect because financial wizards found that the highest tranches of securitized mortgages would still earn a AAA rating if some income was provided to the lowest tranches in the 'highly unlikely' event of eg. a 50% overall default, thus boosting the ratings and saleability of lower tranches. (Fortunately for the U.S., many of these mortgages ended up overseas, spreading the disaster.) Another problem is that mortgage speculators make more profit from foreclosure than partial settlements. Meanwhile, investors worried that mortgage servicers might be too soft on borrowers required restrictions that make renegotiation more difficult and lead to more foreclosures. Similarly, those with 2nd-mortgages often found that those holding the second were unwilling to accept a principal write-down as their share of assets would be wiped out. Finally, new government regulations aimed at making banks seem healthier than otherwise allowed changing from 'mark-to-market' valuation of mortgages to long-term 'mark-to-hope' valuation - thus, writing down assets in a renegotiation would generate the very mortgage write-downs the new regulations avoided, and thus increased bank reluctance to do so.

"Freefall" also does an excellent job refuting many of the simple explanations, alibis, and remedies for the 2008 Great Recession. For example, Greenspan's 'nothing he could do' alibi is countered by Stiglitz's 'require higher down payments or margin requirements' (or increase interest rates). To those blaming Community Reinvestment Act requirements for increased mortgages to those with low incomes, Stiglitz says the default rates on those loans was less than in other areas; as for Fannie and Freddie being responsible, they came late into the sub-prime game. Responding to claims that increased regulation would stifle innovation and its role in economic growth, Stiglitz asserts that it is impossible to trace any sustained economic growth to those 'innovative' mortgages. (A 'real' contribution could have been made by less profitable innovative mortgages that helped homeowners stay in their homes.) On the other hand, he also admits that just giving more regulatory power to the Federal Reserve is not a solution - the Federal Reserve didn't use what it did have prior to late 2008; similarly, the SEC boosted leverage limits from 12:1 to 30:1 and higher in 2004 - exactly the wrong move. Banks suggest banning short sales in the future as a preventive measure - Stiglitz, however, points out that the incentive provided short-sellers to discover fraud and reckless lending may actually play a more important role in curbing bad bank behavior than government regulators have.

Other factors, especially government actions, also receive attention from the author. Overall, global supply exceeds demand - thus, the recovery focus needs to be on boosting demand. Stiglitz points out that growing inequality shifts money from those who would have spent it to those who didn't - weakening overall consumer demand. High oil prices have also impacted most those with low incomes, and probably encouraged Greenspan to hold down interest rates to counteract the negative impact. On a broader level, Stiglitz contends that IMF encouragement of national self-discipline and 'rainy-day' funds also weaken consumer demand. As for recommendations for more tax cuts and rebates, Stiglitz says these won't have much impact on consumers saddled with debt and anxiety, and as long as there's excess capacity, businesses will be reluctant to invest (Laffer's supply-curve tax-curve is an irrelevant theory, at best). Stiglitz even suggests elsewhere that the failure of Bush's 2001 tax cuts to stimulate the economy may have also influenced Greenspan to hold down interest rates for too long.

AIG, once bailed out, paid off billions to Goldman Sachs at 100% (Secretary Paulson's former firm), while defunct credit-default-swaps elsewhere were settled at only 13 cents on the dollar, says Stiglitz. Overall, he is very negative on the financial-sector bailout (TARP), believing that the money would much better have been used to capitalize new banks at 12:1 leverage, or not spent at all. The resulting bank subsidies were unfair to taxpayers (Treasury put up most of the money and got short-changed on potential benefits), and implementation was inconsistent - some institutions and stockholders were bailed out, others were not. (The reason lending 'froze up' is that banks didn't know whether they or their peers ere underwater.) The stimulus package, on the other hand, was too small (aimed at 3.6 million jobs, vs. 10 million lost plus 1.5 million new workers/year needing jobs), and was delegated to Congress without clear guidance. The result was a failure to provide mortgage insurance for those losing jobs, while instead creating the 'cash-for-clunkers' (mostly just moved sales from one period to another - [...] estimated only 18% were added sales, costing taxpayers $24,000 apiece; eight of the top ten purchases came from Asian manufacturers), ineffectual tax cuts, putting money into a failing auto industry, and increased road construction (greater global warming) instead of giving even more money to high-speed rail. The stimulus emphasis should have been on fast implementation, high-multiplier impact, and addressing long-term problems (eg. global warming). The employment situation now is worse than just the unemployment rate suggests - there are a record 6 applicants for every opening, the average work week is at 34 hours - the lowest since data was first collected in 1964, many have turned to disability instead of unemployment and are not counted.

Overall, Stiglitz believes there is far too much short-term thinking driving decision-makers, that business lobbies are too strong, and that markets are not naturally efficient. (Other inefficient market areas besides finance include health care, energy, manufacturing.) Meanwhile, we have done nothing to correct the underlying problems (big banks are even bigger) and Stiglitz also fears (reported elsewhere) the U.S. economy faces a "significant chance" of contracting again.

Interesting side-notes: 1)Stiglitz suggests that banks 'too-big-to-fail' should pay higher rates of deposit insurance, and incur restraints on executive incentives. In 1995 our five largest banks' market share was 11%, 40% now. Regardless, the world's largest three banks are now Chinese - #5 is American. (Not to worry - scale economics are no longer a factor for any of those banks, says Stiglitz.) 2)President Reagan made a major mistake in removing Paul Volcker as Chairman of the Federal Reserve Board and appointing Alan Greenspan in his place. Volcker had brought down inflation from more than 11 percent to under 4 percent, which should have assured his reappointment. But Volcker believed financial markets need to be regulated, and Reagan wanted someone who did not. Thus, Stiglitz believes regulations must be mandated, and enforced by a neutral, not political, source. 3)Repealing the Glass-Steagall Act in 1999 changed the culture of banking from conservative to high-risk, and also encouraged even larger institutions. 4)It is ironic that the Bush/Greenspan efforts to minimize government involvement in the economy resulted in our becoming de facto owners of the world's largest auto and insurance companies, and some of the largest banks. 5)Stock options are doubly damaging - they undermine stockholder wealth while remaining largely hidden from stockholders, and they encourage maximum short-term accounting manipulation to move stock prices up. 6)The U.S. national debt will reach 70% of GDP by 2019, and when it hits 90%, paying 5% interest on that debt will consume one-fifth of federal taxes.

Bottom-Line: Most books on current economic issues written for the public are superficial, or even worse, mere demagoguery. Stiglitz's qualifications - Nobel prize-winner in economics (2001), former Chairman of the President's Council of Economic Advisors (1995-97), and former World Bank Chief Economist help provide an important, interesting and credible alternative. "Freefall" was a pleasure to read.

Economics 101
I admit that economics confuses me, so when I read a book written in lucid easy to understand language I can begin to understand a compound-complex idea a little more clearly. Nothing in economics is as it seems because politics can often obfuscate with ideological explanations that are neither simple or even partially true when based on politics. Stiglitz doesn't say that the free market can't work, but that it isn't the entire answer. Regulations, as the banking meltdown of 2009 demonstrates, are necessary to prevent greed from becoming the dominating motivation for Wall Street and big banks, especially investment banks that measure success only in terms of how big their next bonus will be.

"Freefall" doesn't give us all the answers, and again I admit that I still have questions, but for a basic understanding of the markets as they played out in the past couple of years and how deregulation merely increased the problems for most of Main sreet this is a very good place to start. Some critics have already panned this book as a call to socialism, but those critics obviously lack even a basic understanding of what socialism really is and are only looking for a buzz word to sustain the belief that a totally "Free Market" system is the only good thing, when in fact it increases the chances of boom and bust cycles coming even closer together in the future. To begin, modest regulations are all that might be needed, and if bankers once again act trustworthy and preform ethically it could be enough. If greed continues unabated, then the middle class will disappear and only the wealthiest will profit.

Speaking Truth to Power -- Again
Professor Stiglitz has repeatedly spoken truth to power. He wrote about the perils of unchecked globalization, the disaster of the Federal Reserves policies in the 90s and 00s, the wrong-footed solutions to the Asia crisis, and the cost of the Iraq War. Here he lays out in simple, straightforward jargon-free language, what happened to cause the worst economic crisis since the Depression and what steps we need to take to prevent it from happening again. Highly recommended.

Accurate and timely
Stiglitz accurately reflects on the mistakes made by the US government to prevent and address the financial crisis. The book is a must reader for those who want to understand the the economics and politics behind the crisis. This is an enlightening piece of work from one of the world's best economist.

Until Conservatives Produce a Credible Rebuttal, I am Sticking with Joe
Nobel aureate Joseph Stiglitz produces one of his best books, in which he interprets the reasons leading to, and the possible ways out, of the Great Recession that started in October 2008.
Stiglitz wrote: "Growth (in America over the past decade) was based on a mountain of debt." By 2008, Americans had to suffer from their "unsustainable levels of consumption," and the economy crashed.
Sitglitz, a Keynesian economist, had predicted looming problems for the economy in Davos 2006, and according to this book, he felt embarrassed in 2007. He therefore told skeptics that either his theory was wrong, or crisis would hit harder. His second guess proved to be the right asnwer.
In Freefall, Stiglitz blamed most the greedy bank managers, brokers, lenders, rating agencies for what he described as "preying on" what they knew was destined to inevitably collapse: Subprime mortgages, or high risk people who borrowed beyond their means to buy houses.
He argued that many wrong assumptions led to the housing bubble, the first and foremost amongst them being that housing prices would keep on rising. American home owners were therefore engaged in further debt, often borrowing against their houses.
Stiglitz also blamed deregulation that started in 1987 under President Ronald Reagan.
"Interests, ideas, and ideologies" were the main drive behind such deregulation. The Nobel aureate showed some bias, and rightly so, toward former Fed Chairman, Paul Volker, who brought down America's inflation from 11.3 percent in 1979 to 3.6 in 1987, mainly through regulation, before Reagan replaced him with Alan Greenspan in order to reverse the regulation process.
And for those who call him socialist, Stiglitz wrote that he is a staunch capitalist, except that sometimes there are "flaws in the capitalist system," especially in the "American version of capitalism that emerged in the second half of the twentieth century."
According to Stiglitz, America exported its flawed version of capitalism to the world, thus leading to a global crisis that should to be rectified. To do so, "it may be difficult to have a strong global economy do long as part of the world continues to produce far more than it consumes and another part - a part which should be saving to meet the needs of its aging population - continues to consume far more than it produces," he wrote.
On the way President Barack Obama handled the 2008 Great Recession, Stiglitz wrote: "Hope with Obama was only partially fulfilled as the financial system remains less competitive... the too-big-to-fail-banks problem persists, and the [bailout] money to restructure economy was spent to save old and failed firms."
Stiglitz argued that the bailout was too small, and that it was mainly designed by people from the George Bush administration, who led the economy into its current crisis. These include Treasury Secretary Timothy Geithner and Chief Economist Larry Summers.
Stigliz believes that the government should have stepped in to rescue troubled homeowners by offering loans at low interest rates (say 2 percent), as the government was borrowing at zero percent interest rate. He criticized how the government made the cheap money available to banks, who lent it to Americans at an interest rate of 6 percent, therefore making 4 percent profit off the government's cheap money.
The government should also take into consideration the ratio of multipliers (i.e. the return on each dollar it spends), and should invest in long term projects that would certainly update America and make it more competitive - in the world - for the coming century, according to Siglitz.
"Other aspects of Obama's economic policy have been decidedly movements in the right direction," Stiglitz wrote. ... Read more

Editorial Review

The New York Times best-selling Freakonomics was a worldwide sensation, selling over four million copies in thirty-five languages and changing the way we look at the world. Now, Steven D. Levitt and Stephen J. Dubner return with SuperFreakonomics,and fans and newcomers alike will find that the freakquelis even bolder, funnier, and more surprising than the first.

Four years in the making, SuperFreakonomics asks not only the tough questions, but the unexpected ones:What's more dangerous, driving drunk or walking drunk?Why is chemotherapy prescribed so often if it's so ineffective?Can a sex change boost your salary?

SuperFreakonomics challenges the way we think all over again, exploring the hidden side of everything with such questions as:

• How is a street prostitute like a department-store Santa?
• Why are doctors so bad at washing their hands?
• How much good do car seats do?
• What's the best way to catch a terrorist?
• Did TV cause a rise in crime?
• What do hurricanes, heart attacks, and highway deathshave in common?
• Are people hard-wired for altruism or selfishness?
• Can eating kangaroo save the planet?
• Whichadds more value: a pimp or a Realtor?

Levitt and Dubner mix smart thinking and great storytelling like no one else, whether investigating a solution to global warming or explaining why the price of oral sex has fallen so drastically. By examining how people respond to incentives, they show the world for what it really is – good, bad, ugly, and, in the final analysis, super freaky.

Freakonomics has been imitated many times over – but only now, with SuperFreakonomics, has it met its match.

Reviews

The idea is to make you THINK!, January 4, 2010
I had to laugh as I read some of the negative reviews. Listen people, it's not intended to be a TEXTBOOK, nor is it written like one, thankfully. I've read both books. Super Freakonomics is a good exercise in critical thinking (something that is becoming sorely lacking in the age of American Idol, thanks to our putrid public schools and Playstation parenting); it makes you think about a lot of "truths" that we take for granted. For example, this book actually made me change some of my thinking about global warming. The book is super-interesting, and full of information that you'd be hard-pressed to find in your typical daily reading; and, it "sexes-up" the fields of microeconomics and behavioral economics. One of the points (relentlessly made) is how we (especially our governments) seem to prefer complex, costly solutions to problems, when cheaper, simpler solutions often exist, and the book does a great job of providing many examples of this. Is it a definitive tome on the many topics it covers? No - again, it's not a textbook, but it was definitely worth the time I spent reading it - I hated putting it down.

Economics can be Fun, January 25, 2010
I thoroughly enjoyed this book. It sheds light on why I bothered studying for a degree in economics at university. Yes, economics can be fun. It's a pity it gets such a bum rap. Why should it be called the "dismal science"?

Steven Levitt and Stephen Dubner have written an amusing and readable book. It's full of anecdotes and whimsical stories without ever seriously veering from the science of microeconomics which is its basis. The two Steves have researched an array of topics from street prostitution, to hospital deaths in the 19the century before opining upon global warming and how it might be resolved if, indeed, it is a problem. It's this final point that I particularly loved. Global warming has become a modern religion. It has its own dogmas and turns a blind eye to anyone who questions the "rules". I am quite confident that, in due course, global warming will be solved but it won't be by the na�ve and cack handed solutions that greens put forward. It will be economics that comes to the rescue. This has always been the history of the world and I see no reason why this should change now.

Perhaps the most pleasant feature of "SuperFreakonomics" (and its predecessor "Freakonomics") is that it brings economics away from the realm of stuffy ivory towered professors and their arcane theories and formulas. Instead, economics is presented as something to enjoy. This is the book's real strength. I can only hope that this technique has introduced economics to a wider audience.

However, before finishing up, I find myself wondering which of the "case studies" amused me the most. I think it was the story about travel in New York City and how horses caused more deaths per capita than cars. It's ironic then that the car is seen as the work of the devil by some when, in fact, it has been a great liberator of the human race. Yes, "SuperFreakonomics" is a great read. Read it and enjoy.

more of the same, which is great if you liked the first one, January 1, 2010
Superfreakonomics is the follow-up to the wildly successful Freakonomics, which I thoroughly enjoyed. This edition is more of the same. If you liked the first one, you'll like this one. If you didn't, then you probably won't. If you haven't read either, read the first one. This one is interesting, mostly, but the last chapter was a bit of a drag for me. There are some fascinating theories, statistics and illustrations. For the fans of their New York Times blog, however, there's not much that's new. The first book was a novelty, and a fascinating interdisciplinary one. This book is clearly a concerted effort, and it's enjoyable, but I recall random trivia and interesting points rather than the overarching themes. Did I enjoy it? Absolutely. Will I still talk about it at dinner parties in five years as I still talk about some of the theories in the first one? Well, I will reference one specific chapter.

In short, I loved it, although not quite as much as the first one.

An entertaining read, January 5, 2010
I really enjoyed reading this book. It was a quick and interesting read. I enjoyed the diverse topics, walking drunk, global warming/cooling, externalities, etc.

Reading the negative comments I admit I don't find them baseless. However, I don't take the book as the concrete authority on all things. I feel the books main purpose is to open the mind and allow a different perspective to swirl around for a while; which it does.

People Respond to Incentives, April 25, 2010
This easy-to-read book, a sequel to Freakonomics, is intended to illustrate a variety of economic concepts, especially to the lay person. I'll mention and describe a few of these in a minute, but first it's important to understand what this book is and is not. First, this is a sequel, so if you enjoyed the original book more for its unorthodox style than its underlying message that people respond to incentives, then that same style incorporated into this book may not seem as fresh to you. On the other hand, if you enjoyed the interesting data mining examples in Freakonomics, you will find many more in this book. Second, this book is not a formal economic analysis of anything. If it were, it would likely have plenty of equations with lots of Greek letters, and it wouldn't be particularly interesting for most people to read, unless you have a very detailed and specific interest in the subject. Finally, because the book is intended to be entertaining for all those people who associate economics with the expression "dismal science," the authors use a very lively style and choose unconventional, though real world, examples to illustrate their points. (By the way, the term "dismal science" comes from some of the less-than-cheery conclusions of some early economists, like David Ricardo, who thought worldwide population would grow exponentially while agricultural output grew arithmetically, until starvation became a limiting factor to population growth.)

So economist Steven Levitt and journalist Stephen Dubner set out to explain how prostitutes practice "price discrimination," which refers to the way sellers charge different customers different prices for essentially the same service. Perhaps a more common example would be a car manufacturer that slaps a few upgrades on a basic car, brands the (somewhat) upgraded car differently (think Buick versus Chevrolet, for example), and then charges a significantly higher price for a not-that-different product. This strategy, when practiced successfully, allows manufacturers to capitalize on the willingness of some people to pay more than others for essentially the same product.

The list of economic concepts that are illustrated by various interesting examples is long. There is the concept of "externalities," where some of the costs (or benefits) of the production of a good or service cannot be easily reflected in its price. A common example is the cost of pollution that flows downstream from a paper mill, for example. Other concepts--and these are all important ones for citizens to understand when they vote for politicians seeking public office--include "creative destruction," revealed (versus declared) preferences, comparative advantage (upon which much of world trade is based), the principal-agent problem and others.

The book incorporates a fling with some controversy, including its coverage of global warming, although most of the discussion is more informative than controversial. Did you know, for example, that sulfur dioxide that makes it through the lower levels of the earth's atmosphere (the troposphere) all the way up into the stratosphere can spread out and essentially blanket the earth to the point that it contributes to global cooling, not warming. That's why when a major volcanic eruption sends sulfur high into the atmosphere the earth actually cools somewhat. The authors introduce and discuss at some length a company, Intellectually Ventures, founded by Nathan Myhrvold, the former chief technology officer at Microsoft under Bill Gates. Myhrvold and his associates are actually working on ways to combat global warming (and to help limit the strength of brewing hurricanes) through simple, truly unconventional procedures.

In conclusion, if you are looking for strict and precise science, I'd suggest that look elsewhere. However, if you would enjoy a sometimes lighthearted, yet fundamentally reasonable, approach to understanding what economics means to the average person in everyday life, this is a good choice.

You just gotta think outside the box!, March 26, 2010
Economics may not be considered one of the sexier sciences. But, first with "Freakonomics" and now with "Super Freakonomics", rogue economists and best-selling authors, Steven D Levitt and Stephen J Dubner, have proven that economics can be fascinating, funny and out-of-the-blue surprising as well!

No cow is so sacred as to escape the scrutiny of Levitt and Dubner's micro- and macro-scopic analysis. For example, would any of us have thought to question the value of infant car seats in preventing child injury or deaths in car accidents? I certainly wouldn't have but Levitt and Dubner show that children's car seats are no more effective than regular seat belts at preventing injury. How many millions (or billions) of dollars are swirling into a voracious black hole in pursuit of this particular sacred cow?

I expect their tongues were planted firmly in their cheeks when they examined the economics of pimping and street prostitution, but I, for one, found the analysis of the precipitous decline in the cost of oral sex to be absolutely fascinating. Not only is Levitt and Dubner's analysis interesting economics but their conclusions say a great deal about the evolution of world culture.

Is global warming a reality? Who knows for sure but, whether it is or it isn't, Levitt and Dubner have presented a rather critical commentary on the economics of possible solutions to a problem that may well be considerably less daunting and costly to solve than the likes of Al Gore would have us believe. While "Super Freakonomics" may smack of libertarianism, it's hard to argue with Levitt and Dubner's broader conclusions that government policy frequently falls victim to the law of unintended consequences and that governments rarely, if ever, choose a small-scale inexpensive solution to a problem when a flashier, bigger and more expensive solution is available.

With no punches pulled, "Super Freakonomics" might be brash and cheeky and it certainly isn't textbook economics, but it is thoroughly entertaining and informative. If it causes any voter to raise an eyebrow and question government policy more critically or if it causes any consumer to be more wary of future purchases and less accepting of dogma, publicity or advertising on faith, then Levitt and Dubner will go to bed this evening pleased with the work they've done. And, along the way - what a bonus - it's a certainty that you'll experience a good laugh or two! Highly recommended.

Paul Weiss

Shouldn't ask too much of a sequel, November 15, 2009
Sequels disappoint; don't ask too much of this one. Perhaps you cannot blame authors for wanting to cash in on their popularity, but if Super Freakonomics had been written before Freakonomics, few people would have bought it. The authors are trying very hard to shock and amaze, but the organization is scattered and the research seems questionable.

Their standard formula is to begin with a counterintuitive statement and before your very eyes show you how clever they are. I, for one, do not see how prostitutes are patriotic, and thought that the comparison between Al Gore and Mount Pinatubo forced and unconvincing.

There are many excellent reviews here already, so I will concentrate on an issue that bothers me. The authors propose taming hurricanes or typhoons. I live in a mountainous jungle that is hit by several typhoons in a typical year, and I can see very clearly how typhoons clear out the deadwood, flush clean streambeds, fill up the water supply, and even spread species (which explains how I spotted a snake from our mountains very far downstream along the bank of the river in downtown Taipei). Without typhoons, Taiwan would not have enough water to drink, so every year everybody hopes we get some typhoons: mild typhoons are nicer, but even strong typhoons are necessary.

This August Taiwan was hit by a medium typhoon that dumped nine feet of water on the mountains in three days, burying villages and killing many people. Recent catastrophes of this nature are due not so much to typhoons as to investors (not locals) chopping roads into mountains, planting betel nut trees, and other human activities. So what we need is not fewer typhoons, but more care in dealing with the mountains.

Every year we usually get several typhoons larger than Katrina, but they do little damage, because people have the sense not to build below sea level. Also, everything that can blow away, blew away long ago. Again, my point is that disasters from typhoons or hurricanes are due in large part to short-sighted human development, not the weather.

But suppose people started controlling typhoons. IMHO, that would be a real can of worms. Say Taiwan needed water, but the Philippines and Okinawa did too. A great tug-of-war would result, as each tried to channel the typhoon home. The opposite would hold true, too. If Taiwan didn't want a typhoon, it would have to go somewhere, but where? The neighbors might not want it, either.

The authors seem to have forgotten the Butterfly Effect. Even something so negligible as a butterfly flapping its wings may have far-reaching effects. Unless we can guarantee the long-term consequences of fiddling with typhoons, I say, Let's not!

The authors seek provocation and titillation at the cost of deliberation and far-sightedness. It may sell books, but many of their ideas need a lot more thought.

A Bit More Scattered Than That First Book ... But Still Interesting, October 17, 2010
2 words that describe the bookFreaky Economics (Duh!)

3 characters I met

* Nathan Myhrvold, a former Microsoft executive, is one of the co-founders of Intellectual Ventures (IV)--an invention company that has come up with a variety of creative and affordable fixes for a variety of problems, ranging from hurricanes (they could literally stop them!) and global warming. It boggled my mind that a group of people like those found at IV exist--and they've found solutions for huge problems that are available RIGHT NOW! Learning about why these solutions are not being implemented was fascinating as well as a bit upsetting.

* Allie--a self-made woman who runs her own profitable business, which just happens to be as a $300 an hour prostitute. We meet Allie in the chapter on the economics of prostitution, which explains (among other things) why oral sex got so cheap. (During this particular chapter, you could be forgiven for thinking "Would being a prostitute really be such a bad job?" But, as you read on, you'll quickly be relieved of this idea.)

* Keith Chen, an associate professor of economics at Yale, who attempted to find out "What would happen if I could teach a bunch of monkeys to use money?" What he finds is fascinating--and allowed Chen to have the distinction of seeing the "first instance of monkey prostitution in the recorded history of science." I TOLD you this book was about freaky economics!

4 things I liked or disliked about the book

* I was a huge fan of the first Freakonomics book so when I saw there was a follow-up, I knew I had to read it. As with the first book, Superfreakonomics is packed with interesting information. However, I found it to be more scattered and less cohesive than the first book. At times, it was hard to remember that this book had anything at all to do with economics. It often felt more like a "check out the weird research this guy did!" Yet I'd still recommend it. As far as economics books go, you won't find many that are more accessible or engaging.

* I liked how the topics ranged all over the place. Consider this partial list of topics covered in the book: the perils of walking drunk, prostitution, the male-female wage gap, the worst month to have a baby, the trickle down effects of September 11th, telling a good doctor from a bad one, how to postpone death, the Kitty Genovese murder, the roots of altruism, kidney donation in Iran, the Endangered Species Act, dead whales, the history of seatbelts, hurricanes, global warming, the Club versus LoJack, why hand washing matters, and (of course) monkey prostitution.

* Although I liked the wide range of topics covered, this did result in a scattershot feeling. Lots of stuff is discussed, but the text jumps from one to the other so quickly that I had a hard time remembering what I was reading or had read. In fact, going back to write this review some months after reading this book, I kept thinking to myself "I don't really remember that. They talked about kidney donation in Iran? Oh yeah ... that was interesting. Kitty Genovese? Who was that? Oh...that's right. Now I remember." Yet, despite this flaw, it was still a fast and interesting read.

* Of all the things I read about in this book, the one that made me crazy was that there are solutions for major problems that could be implemented RIGHT NOW but aren't due to a variety of political and economic reasons. I'm sure residents of Florida, Louisiana and other areas plagued by hurricanes would be quite interested in learning about the low-tech, low-cost technology that could potentially prevent hurricanes from forming and wreaking havoc.

5 stars or less for my rating:

I'm giving the book 4 stars. Just like the first Freakonomics book, this book was a fast-paced and interesting read. If you detest economics and couldn't imagine voluntarily reading a book about economics, I'm here to tell you should make an exception for this series. Although the book felt a bit scattered and less focused than the first book, I'd still recommend it. If you're a fan of accessible non-fiction, this book is a must read. And, if you have the misguided idea that non-fiction books are boring or dry, this book will change your mind. I mean, it talks about MONKEY PROSTITUTION!

Nice reading, not much more, June 13, 2010
Since I liked Frekomonics, I bought this sequel.

Of course, it is still written very professionally, easy to read, and still some stunning (stunning at first glance) findings.
It appears to me, that the authors ran out of good material to write about. In particular the last chapter on global warning could have been dealt with on 25% of the pages the authors filled up - probably to get at least 200 pages filled in rather large print.

So, it is not a waste of time to read it, but also nothing great, just good average

Fascinating, fun, and more depth than the first book, May 2, 2010
This book is a worthy, and in my view a better, successor to the original "Freakonomics". I found the original book fascinating, but ultimately frustrating because after good beginnings it lost its way and felt light on content. The second book avoids that problem, keeping the thought provoking analysis and insights coming all the way.

The new book has a very broad scope - trying to understand the economics and human psychology which drive aspects of human existence as disparate as female oppression and prostitution, terrorism, effective medical treatment, altruism, vehicle safety, and global problems such as climate change.

As before, Levitt and Dubner spend a lot of time challenging received wisdom, citing detailed research and comprehensive data which prove that in many cases our common understanding of how things work "just ain't so". Typically the underlying research is not their own, but they have done a wonderful job of bringing together a larger number of different findings into a set of readily readable chapters, each of which have a strong unifying theme in the form of a key question. My favourite: "What Do Al Gore and Mount Pinatubo Have In Common?"

Towards the end of the book, they also make an interesting proposition, that a large number of human problems can be resolved with relatively simple solutions, if we have the will to make it happen. The adoption of seat belts is cited as a major previous success, and the idea is then developed to explore several possible relatively low-cost geo-engineering solutions to global warming. Views may differ on how humanity must balance behavioural and technical solutions to its current challenges, but their argument is a strong one, based on a frank and realistic assessment of typical behaviour.

As a counterpoint, the final chapter recounts an experiment which proved that much of human economic behaviour can be replicated in other animals. I just loved the story of the monkeys who were introduced to the concept of money, and promptly invented prostitution!

Despite the range and depth of the subject matter, the book is always readable, with frequent "laugh out loud" moments. Anyone can pick up this book, enjoy it and take away an improved understanding of the underlying drivers for human (and monkey) behaviour. I freely recommend it to anybody interested in doing so.
... Read more

Editorial Review

The Travels of a T-Shirt in the Global Economy has been lauded by the New York Times, Financial Times, and reviewers worldwide. Translated in fourteen languages, Travels has received numerous awards for its frank and nuanced discussion of global economic realities.� Now updated and revised--including a discussions of environmental issue--this fascinating book illustrates crucial lessons in the debate on globalization.

The major themes and conclusions from the first edition are intact, but in� response to questions from readers and students around the world, the second edition now includes:

• Updates on the people, businesses, and politics involved in the production of the T-shirt.
• Discussions of environmental issues related to both international trade and the T-shirt's life story.
• A look at the maturing of the anti-globalization movement, and the recent shift in public opinion against internationalism.

Reviews

Interesting, important, broad in scope, full of technical and historic detail, March 7, 2006
Spurred by a Georgetown student anti-sweatshop protest, Pietra Rivoli took up the task of tracing the life of a (tacky souvenir) t-shirt she buys in Florida, to examine the economics and politics of this non-trivial segment of the apparel industry. Why she buys the t-shirt in the first place remains a mystery. Why she needs one from Florida that she will likely discard is even more of a mystery. She made me think about studying the American practice of souvenir shopping and excess consumption. But her t-shirt has a story worth telling.

Rivoli first adeptly traces the history of cotton as a critical world commodity, including the struggles in England two hundred fifty years ago by the wool industry to combat the comfort of cotton, going so far as to prohibit the use of calico and the requirement that people be buried in wool. The questionable economics of slavery moved cotton production to the United States, but it was and still is the intervention of technology, research and financial capital that made cotton farming so much more productive today. Nonetheless, the ability of Texas farmers to market "low quality" cotton can best be attributed to both technology and federal price supports, up to 19 cents on a 59 cent pound of cotton. Cotton, while still a major commodity in global trade, has probably declined in relative value and share of the world economy. What we may be seeing is more of the slow death of the importance a dated commodity and less of a "race to the bottom" that she suggests.

She then takes us to t-shirt and apparel manufacturing and employment, now on the wane in North Carolina, South Carolina and Georgia. People mistakenly think that these jobs are being sent to China. They're not. In fact, they're just disappearing. Rivoli notes that China, between 1995 and 2003, lost ten times the numbers of textiles manufacturing jobs as did the United States (p. 142), and Chinese workers have little or no safety net or alternative employment, unlike their displaced American brethren. In the ill-fated "race to the bottom," it should be clear that this fate seems to await any industry that is unable to maintain a long-term competitive advantage, and the only way to do that seems to be through protectionism. While t-shirts are cheap, saving textile jobs is not cheap. Saving American textile jobs costs between $135,000 and $180,000 per job saved, according to best estimates (p. 144), costing American taxpayers and consumers billions of dollars. Where jobs are being created is in the lobbying and trade association industry. This section (Part III) is an overwhelming alphabet-soup of acronyms - WTO, AGOA, NAFTA, CBTPA, ADTPA, ATC, MFA, ACMI, LTA, ATMI, and ITCB -- for trade agreements, trade associations, trade and lobbying groups, and other defenders of (primarily) protectionism. The complexity of the letters is exceeded by the complexity of the trade agreements they promulgate. It takes a lot of honest, well-intentioned effort and dollars to disrupt the free flow of trade.

As noted above, Rivoli generally passes over the details of the American retail trade for apparel, other than minimal attention to the hated global icon Wal-mart. She observes the expensive foreign vehicles and SUVs in the American shopping mall parking lot, lined up to drop off used clothing at the Salvation Army van in anticipation of going inside and buying up more equally recyclable apparel. I doubt that those malls contain a Wal-mart, and that there is likely a big difference between those who shop at Wal-mart and those who re-cycle clothes before shopping at Lord & Taylor.

This recycled donation sets the stage for the best example of free trade in the book - the used clothing stalls in Tanzania, where savvy shoppers brand shop at rock bottom prices, haggling and playing the market from dawn to dusk. Discriminating, well-informed, fashion-conscious shoppers happily haggle, engaged in one of Tanzania's functioning markets. She is careful not to buy the `humiliation' argument, the one that says that Africans should be ashamed to wear second-hand clothes. As she notes, some of the used stuff dropped off at the American mall never makes it to Africa; it gets picked off along the way as "vintage clothing" and worn by Americans and Japanese willing to pay "hundreds of dollars" for used jeans. As she notes, while much has remained the same in impoverished Africa, most Africans do dress better today, thanks to this free market.

She offers a short conclusion (pp. 211-215) and analysis. She does see some hope: "Cutting agricultural subsidies, democratization, and giving poor countries a place at the table at trade negotiations are all steps in the right direction." She notes Cordell Hull's view, that global commerce may be the best prevention for war.

The book is relatively short (215 pages), well-written, engaging, and, despite the need to use acronyms, very clear and readable. It is an excellent primer on the problems of protectionism and the intricacies of delivering on truly free trade, while noting that many who espouse free trade really don't want to practice it or, more commonly, be subjected to the competition from free trade.

Three minor quibbles.

She writes deferentially about Tom Friedman, his lions and gazelles metaphors, hardware and software analogies, but forgets that he also says that the world is flat. This book shows that the world markets for t-shirts is not free, fair or flat. And the playing field is not level. It is full of lumps, dips, and massive mountains. And, as Rivoli notes, it was not made or kept this way other than by "snarling dogs", not lions, not gazelles. Friedman has popularized interest in globalization but he has shed little light on its understanding or analysis.

With two or three almost casual asides, she seems intent on laying this travesty of fair or free markets at the feet of George Bush, if only because west Texas cotton farmers are such beneficiaries of federal subsidies. A fairer view would recognize that people of the same political and social demeanor who now fight against globalization once fought --- and still do fight -- for crop price protection for farmers.

Rivoli claims that economists everywhere around the globe appear to have universally adopted, recommended and embraced free trade ("virtually unanimous support among professional economists, a group almost without exception who scorn protectionism in general" p. 148). I am not willing to go that far. But you should go so far as to read this good book.

For the classroom - more than you think, May 30, 2006
Enough reviews lauding the author and this book have been written, and all of them well-deserved. But since it becomes available in paperback this June (2006), this review hopes to spark a wider discussion of how it might be used in the classroom.

The summary is well known. Prompted by anti-globalization protests on her Georgetown campus, an economics professor travels the world to discover the life of a t-shirt, from West Texas cotton (and a brief history of U.S. cotton and labor policies) to Chinese manufacturing to U.S. trade policy (including "perverse effects and unintended consequences") and finally to the used-clothing market in Africa. Neither paladin nor myrmidon of the usual ideologues, the author uses "story-telling" rather than strict quantitative analysis or theoretical modeling.

Applications for courses in foreign policy, political economy, public policy and the like are obvious. For undergraduates or new graduate students, it might be a good way to introduce a wide variety of concepts at the beginning of a course, or as concluding work, to see how the semester's concepts work together (and at odds).

But it should also not be overlooked for use in courses such as business ethics, or simply "ethics". It has plenty for courses like "science and society." It also might contribute to courses interested in race, class or gender issues, although the answers and implications can be more mixed than some partisans might prefer. (For example, the author's pro-free-trade bias is challenged, but so too are notions that "exploited" tells the entire story of women in low-paying manufacturing jobs.)

Our college is using the book as its "summer reading" for all incoming first-year students, with a series of events during orientation and the fall semester. Some of the questions I would like to see raised include considering "Commercial success can be achieved through moral failure" (p. 14), "Global capitalism and labor activism are not enemies, but are instead cooperators, however unwitting, in improving the human condition" (p. 102), the role of technological advances in shaping social and cultural changes, and questions about political activism, social justice, etc. Other faculty members are working on different questions that are interesting and important, on the substance of the book, but also on broader concepts applicable to life as a new college student.

My own bias is that this kind of book, and this book in particular, is a very student-friendly addition to a wide range of courses usually full of dryer tomes. If you're looking for something different than The Lexus and the Olive Tree and The World is Flat, this might be for you.

Globalization Demystified, July 25, 2005
All of us have an opinion on globalization. We either fall into the protectionist or free trade camp or perhaps somewhere between but few of us have a clear concept of the mechanics of globalization. Alan Tonselson’s book “The Race to the Bottom” tried explaining it using wry statistical economic analysis but Rivoli breathes life into globalization by fleshing out the people involved in the life cycle of an ordinary T-shirt. Her book illustrates this phenomenon to the layperson by demonstrating that globalization is more about history and, more importantly, politics, than about economics.

Her detailed discussion of textile trade politics leaves me to marvel at the fact that I am in fact wearing a T-shirt at all! Teleologically all political activity is aimed at material gain, hence, we are back to economics or as she so aptly demonstrates that politics gets in the way of economics.

Travels of a T-Shirt is an engrossing, informative, enlightening, and exciting book. The most salient feature is her historical discussion of cotton production and the textile industry. If you thought that globalization is a 21st century phenomena think again. Globalization is as old as the human race. Only its magnitude is unique to our century.

Readers will discover that the issues of globalization are not black and white but rather infinite shades of grey. I urge everyone to read this book for I guarantee that they will walk away with a whole new perspective.

A real eye opener, October 27, 2006
At the beginning of the book, Pietra Rivoli sets out to find an answer to the anti-globalization cries of the activists, to build a case to convince them of the power of the markets in improving the life of the poor. Instead, we discover an intricate web of interrelationships of politics, economics and culture; we realize that the trade skeptics need the corporations, the corporations need the skeptics, but most importantly the sweatshop workers need them both.

This book really stands out in its scope and conclusions. All too often we are exposed to one-sided attacks on or treatises for globalization - this book offers a comprehensive look at both sides, and more importantly it recognizes the importance of both. Amartya Sen (Nobel prize winner) proposed and supported many of the same ideas before, but this book articulates them exceptionally well and offers plenty of real, historical examples to seal the case.

I read this book for a class, but it's a kind of book I would have no hesitation reading on my free time either - it's a solid investment of your time and a real eye opener.

A Historical Tour of Industry Issues, March 22, 2005
I'm from the apparel industry - not fiber, yarn, textile or retail which in the US are separate industries - but apparel, the cutting and sewing and shipping of clothing. Ironically, a week before reading this book, I was given a passionate and amazing talk by an executive from one of the non-apparel companies profiled in this book. When he was done, I told him his business plan, which he detailed, could not have been written by an academic or a consultant, but only by a warrior in the supply chain. Well, this book could not have been written by a warrior, but only by an academic. In its description of the travels of a shirt, it bears close resemblance to a similar story written several years back in the NYTimes magazine. Having said that, this book rocks. Its great. Its a tutorial of how the apparel industry chases the low cost needle from country to country. And it is extremely current. I learned a lot about cotton, yarn, textiles, trade, lobbying, England - but nothing new about apparel, per se. So to me, everyone will learn something new from this book. It is unfortunate the author did not interview Kevin Burke of the American Apparel and Footwear Association. She seems to imply that the AAMA just disappeared. It did not. Kevin is a key player in the "Alphabet Army" the author describes as centered in Washington. Still, as I read the book, I learned the history of one of the members of our organization (www.aapnetwork.net), a highly successful cotton organization called PCCA. And I saw many names of people I knew first hand. There is so much history to the apparel supply chain I simply did not know - and now I understand it much better. As for my own bias of the divergent sides one takes on trade, I found myself leaning side to side like an old hill billy watching wrestling on TV as I squirmed in response to one sides rhetoric and the others B.S. Its well written. I like to think I'm a good industry writer, but I could not have done what Dr. Rivoli has achieved. Its a great yarn, maybe a little too heavy on the sweatshop, dogma and labor aspects of the issue, but then again, its written by an academic. I'm still waiting after 15 years of touring apparel factories all around the world to find an actual sweatshop. The only one I've ever seen was on a PBS documentary shot in New York of a horrifying factory there. Apparel chases the low cost needle. As Wal-Mart told me personally last decade, "when a US apparel contractor can make a dozen golf shirts at the same quality and price as we're getting from Cambodia, we'll buy them". Apparel chases the low cost needle. China is the world's apparel plant floor. Wal-Mart is the world's retail floor. Reality rules, and it is so inevitable it hurts. Are there any questions?

A Gloriously Fun Marriage of History, Technology and Economics - a Real Page Turner, August 10, 2006
The only reason I give this book 5 stars is because I can't give it 6! This blessed relief from boring, tedious economic tomes is the best of it's kind since "The Incredible Bread Machine."

After having known the comfortable pleasures of soft cotton clothing next to their skin, the 18th century British public suffered through two generations of itchy woolen undergarments. Why? For the same reason that 21st century garment makers from Bangladesh to Turkey, after playing tug of war for years with the leading American textile industry lobbyist, have suddenly switched sides to tug with him on his end of the rope: Job Protection. The weavers in 1719 Britain did not want to lose their jobs to cheap cotton imports from the east any more than American mills or third world nations with economies dependent on making inexpensive clothing want to see their jobs go to . . . . . .China, in this case.

We learn why that's a mistaken belief, at least in part. Industry jobs aren't going to China, or Sri Lanka, or Mars, for that matter, as much as they are just going - period.

Welcome to the world of cotton growers, subsidies, price supports, trade quotas, tariffs, free markets and, well, not so free markets. The author has penned a superb book which unpacks a complex topic. Using case studies of real folks she captures the nuances of an often arcane subject with astonishing clarity and brevity that spans the globe and time from 17th century England to 21st century Africa where a free market re-packages cheap upscale clothing discards in demand by a fashion saavy, if impoverished, public.

In barely 200 pages you'll understand more about applied econmics than you imagined. You'll appreciate the success that comes to a country (the U.S., eg) where the institutions - farms, market, government, science and the universities - all work, making a "virtuous circle" out of which entrepreneurial resourcefulness can be well rewarded. The third world is missing a lot more than just money to compete effectively.

Well written, fascinating, and timely, it covers the dark side as well as the irrepressable ingenuity of the human mind. Anyone can understand it, and everyone should enjoy it.

great book on globalization, April 15, 2005
An entertaining and insightful read on how the global economy really works for people. the author tackles the serious issues about globalization by exploring the life of her t-shirt, but she also is a great writer who can take the complex and make it both understanding and entertaining. bravo!

A real good book!, November 6, 2006
As an economist, I thought the book would be too simplistic. However, I found it both enjoyable and informative. It is well written and an easy read, something that I have come to appreciate having to read journal articles, working papers and textbooks which are usually not reader friendly.

Thoroughly enjoyable and unique, May 17, 2005
A unique and well-written book of international economics for anyone. No hard edges or hard opinions cloud this book's ingenious premise. From someone who has read many books on business and econ, this one is not only feel good but brilliant. Enjoy!

Fantastic, well-written, and eye-opening, August 6, 2008
Upon first glance, it might appear that this book details economic aspects of a
single industry, namely that of T-shirts. You'd be mistaken. It instead offers
an insightful look into several different aspects of T-shirt production,
including agriculture, factory working conditions, free trade (and
lack thereof), and concluding with the world-wide used T-shirt market. Each of
these sections could merit a book topic in its own right, but Ms. Rivoli has
wonderfully combined them into a single book ripe for reading.

Learn about the history of cotton production, including the rise of American
production and why it's still on top. (Hint: the American government has more
than a small role, but farm subsidies aren't the major reason.) Learn about the
back-room political dealings that ensure that some of your clothes come from
Bangladesh and Mexico instead of China, even though China could provide them for
less (and why it might be a good idea to keep things that way). Learn about what
happens to a used T-shirt once it's donated to the Salvation Army, and how it
might end up being sold in a Kenyan's clothing stall instead of your local
thrift store.

There is not a dull moment to be found in the book, and in fact seems to get
more interesting as the book wears on. If there is any fault with the book, it
is that the book was published in 2005 which means that the revised textile
trade agreements from 2006 have been left out. A revised edition would be
appreciated. Luckily, that's the only fault I have with the book. Highly
recommended.
... Read more

Editorial Review

The Wealth of Nations
by Adam Smith

It is symbolic that Adam Smith’s masterpiece of economic analysis, The Wealth of Nations, was first published in 1776, the same year as the Declaration of Independence.

In his book, Smith fervently extolled the simple yet enlightened notion that individuals are fully capable of setting and regulating prices for their own goods and services. He argued passionately in favor of free trade, yet stood up for the little guy. The Wealth of Nations provided the first--and still the most eloquent--integrated description of the workings of a market economy.

The result of Smith’s efforts is a witty, highly readable work of genius filled with prescient theories that form the basis of a thriving capitalist system. This unabridged edition offers the modern reader a fresh look at a timeless and seminal work that revolutionized the way governments and individuals view the creation and dispersion of wealth--and that continues to influence our economy right up to the present day. ... Read more

Reviews

Go with Bantam, February 11, 2007
If you're wondering which Wealth of Nations to purchase, get the Bantam paperback. This is Smith's complete and unabridged final version of the Wealth of Nations. It provides footnotes on Smith's wording, the historical context, and the differences between Smith's 5th edition and previous editions. In addition, the margin of the pages contain useful notes which summarize Smith's writing. For the price, this is clearly the superior choice.

Now, if you're wondering whether you should undertake such an endeavor, let me just say that Adam Smith was a professor of rhetoric. He explains everything so precisely, yet so comprehensible. Smith's writing is by no means difficult; I actually found it a surprisingly easy read given its antique nature. Once you get through the first chapter, you get quite used to Smith's writing style. If you put adequate time and energy into it, it's not hard at all.

Foundations of micro and macroeconomics, July 6, 2005
Using a vast historical database and plenty of everyday examples Adam Smith lays the foundations of modern economics without the formalization which would come later.

He starts by exploring the need for specialization of labour once societies advance beyond the hunter gatherer phase. As a result each individual is incapable of sustaining his basic needs and thus must purchase these using his labour which Smith views as the source of all value. As a result demand and supply is created for such labour.

He makes the natural assumption that each individual pursues their best interests.

He foreshadows the concepts of marginal utility and scarcity in determining the shapes of demand curves for commodities. ( He never actually mentions curves ).

Similarly, he describes the three factors determining supply prices for commodities ( rent of land, wages and capital costs ) and the various factors which influence them ( the equivalent of modern supply/demand curves for each factor ).

He puts these together under ideal circumstances to show how supply and demand meet to clear markets ( equilibrium in modern language ).

He then turns to macroeconomics laying the foundations for GDP and shows how capital can be distributed to "unproductive labour" ( that labour used to maintain productive labour ) such as doctors lawyer entertainers etc and "productive labour" ( that labour used in the manufacture and distribution of raw and finished products ). He explores the consequences of various distribution of each from both the micro and macroeconomic perspective.

He concludes by emphasizing the importance of government in providing international and domestic security as well as providing public works and institutions especially education.

Naturally this requires state revenue and he devotes almost one entire "book" to taxes.

He delves briefly into political economy especially merchantilism and it's detrimental effects to society at large.

A great introduction to modern economics that is often missed in didactic lectures. This book gives the motivation for many modern economic concepts that is often lost in mathematical formalism.

Put on top of your reading list., July 2, 2006
A classic... mandatory but pleasant reading if you are into Economics... not boring despite the size. Read with a pencil handy to highlight the too many good quotes. Get the Bantam Classics edition--cheap, small and unabridged (doesn't get much better than this). Mind boggling how good Adam Smith is.

Insights on the Fundamentals of Wealth, August 20, 2006
This book is a modeling exercise about the components of a nation's wealth, whereby: Wealth of Nations = Land + Labour + Stock (ie Capital accumulated). This model serves as the foundation of the arguments in the entire book; and an excellent guide to analyze our modern market economies. Smith touches on various topics, ranging from market economics, history of colony establishments, state of opulence (briefly describing China in the 18th century), and of human nature and behavior in general.

Much of Adam Smith's ideas have been distorted by subsequent scholars, some of whom contorted his ideas to suit their own purposes, while others might have simply misunderstood. For example, in coining the word 'the Invisible Hand', Smith recommended free market competition as the foundation for progressive opulance. However, his implicit assumption was that people seeking their own benefits also embraced compassion and sympathy in their moral values. This 'moral value' part is often missing in contemporary economic analysis. As such, to gain an understanding of his complete doctrine, you should read this economics book together with his other book "The Theory of Moral Sentiments", which explores definitions of moral values and virtues.

Another issue worth mentioning is that lots of people thought that Capitalism was derived from Adam Smith's doctrine, and the current market economies in the USA is a descendent of this ideology. However, if we used his definitions and analysis to compare the current USA market system, you will find that parts of the US system seemed to match closer to the Merchantile System that Smith lambasted as inefficient and short-sighted.

A lot has been said about Smith's keen observations and eloquent quotes, however, most failed to mention his uncanny sense of humor. For example, in discussing about labor compensation, Smith remarked that "The public admiration which attends upon such distinguished abilities, makes always a part of their rewards; a greater or smaller in proportion as it is higher or lower in degree. It makes a considerable part of that reward in the profession of physics; a still greater perhaps in that of law; in poetry and philosophy it makes almost the whole."; when taken into contexts that Smith is a Scholar in Philosophy, and hence should expect `public admiration' as his total compensation package, this sentence is almost hilarious.

This book is an insightful read, albeit one that requires much pondering. It took Adam Smith ten years to complete the first edition of Wealth of Nations, hence I would strongly recommend taking a slow pace in this exploration of his wisdom.

You might ask whether there is an easier way to read this book, perhaps through some summary others wrote.

My opinion is really not to do that, because the gist of this book is on the thinking process and good learning does not come easy. Spend the time to reflect on his reasonings and you will gain significantly from his wisdom. Not to forget that you should get a copy of his other book "The Theory of Moral Sentiments" to fully appreciate the Wealth of Nations.

On The Wealth of Nations, November 29, 2004
As a high school student with only a rudimentary understanding of economics, if even that, I found Adam Smith's book to be very informative. Having read it with great ignorance on the subject was able to learn a great deal about economic principles with more depth than "supply and demand dictate price". I found the ideas behind taxing to be simple but effective given their presentation as well as Smith's arguements for a free market economy. Reading this historical text has also helped placed into context his arguemnts against the mercantile system and the taxing of the American colonies because the depth that he goes into about said subjects is more than any history class that I have taken has allotted. For some the wording may seem dated or old or borring but for those who enjoy a more analytical style or writing, such as the style used in the translations of Roman philosophy texts, the writing style should not be a problem. The most intimidating aspect of this book is its size, an aspect which can easily be overcome if the reader finds the text engaging for the above reason. While I cannot say that it is a "must read" or a "required read" for an understanding of economics simply because of the ignorance which I still possess on the subject, I can say that it is an informative read that explains in depth, using cited examples, areas of economics that are easy to grasp if the reader enjoys the text. To conclude this, from my strictly ignorant (although less ignorant after reading this book) point of view, The Wealth of Nations is an informative and engaging book.

An interesting, but hard read, August 2, 2004
The Wealth of Nations handles a lot of economical phenomena in a concrete but sometimes complex way. On one hand the book is filled with ideas, some convincing, some out-dated, some fundamental to the current believe in free-markets. These ideas are combined with appealing (or appalling) examples of the injustice done to people by disturbing the free-market. On the other hand however, I find that certain sections of the book require a lot of concentration. The book is an interesting, but slow and at times difficult, read.

Essentially, it is a treatise on the power of individuals to maximise their own wealth and therefor a support for the natural liberty of men and an argument for free-markets. Not as a perfect system in which there will be no misery, but as a system that gives individuals the greatest (and most just) opportunity to gain happiness and which will be the quickest to respond to changes in supply and demand (and therefor decrease the misery which is created when governments ignore gaps between supply and demand).

It is not a book that believes in the pure goodness of companies (but explicitly states that companies have a interest which is directly opposite to that of society as a whole. I.e. the interest of companies is to create a supply shortage so they can ask prices above costprice), but says that the best way to break the power of these companies is the allow free competition. It also reveals that political decisions that at fist glance seems compassionate, might in fact be inhumane, cruel and the cause of much suffering (because on the long run they lead to a supply shortage). The examples given here, are still relevant to view the decisions made by politicians in today's so-called free market countries.

Comment on review of Micheal Brady, june 13 2005:
Brady remarks that Smith was the first opponent of globalization. The (strange) evidence he gives to support this statement is that Smith supports the use of counter tariffs, if (and only if) this might lead to the removal of the initial tariff. This statement clearly shows that Smith was against protectionist measures like tariffs and only condoned them if in the short run they would lead to less protectionism and therefor more globalization! Brady also supports his statement by mentioning that Smith opposed any offshoring if the purpose of such offshoring was to supply the home market. The keyword here again being "if". Smith was against a nation stimulating offshoring because he saw no national gain. This however doesn't mean that governments should restrict labor/capital mobility, because this would go against the natural liberty of men.

A Must Read For Every Economist, December 7, 2008
This book is so widely cited and interpreted contrary to the author's original thought, that every economist should read it completely to avoid being misled by such incorrect interpretations.

First, let us take the "invisible hand" metaphor. When I have studied economy in the University, I was taught that almost the entire book is devoted to the "invisible hand" which means "self-corrective markets", "liberalism", "Laissez-faire" and "state non-intervention". After reading this book, I have found out that Adam Smith did use the term "invisible hand" only once in the entire book, in the discussion of domestic versus foreign trade.

To illustrate the point, let me quote the text where term "invisible hand" is used: "First, every individual endeavours to employ his capital as near home as he can, and consequently as much as he can in the support of domestic industry, provided always that he can thereby obtain the ordinary, or not a great deal less than the ordinary profits of stock. Thus, upon equal, or nearly equal profits, every wholesale merchant naturally prefers the home trade to the foreign trade of consumption, and the foreign trade of consumption to the carrying trade. In the home trade, his capital is never so long out of his sight as it frequently is in the foreign trade of consumption. [...]Secondly, every individual who employs his capital in the support of domestic industry, necessarily endeavours so to direct that industry, that its produce may be of the greatest possible value. [...]As every individual, therefore, endeavours as much as he can, both to employ his capital in the support of domestic industry, and so to direct that industry that its produce maybe of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it."

After reading this book, I have found out that Adam Smith was influenced by French Physiocrats. The Physiocrats saw the true wealth of a nation as determined by the surplus of agricultural production over and above that needed to support agriculture (by feeding farm labourers and so forth). Other forms of economic activity, such as manufacturing, were viewed as taking this surplus agricultural production and transforming it into new products, by using the surplus agricultural production to feed the workers who produced the extra goods. While these manufacturers and other non agricultural workers may be useful, they were seen as 'sterile' in that their income derives ultimately not from their own work, but from the surplus production of the agricultural sector.

I have found out that this book is not about "invisible hand" or "Laissez-faire". It is quite a complete study that covers almost every basic aspect of the economy, and remains an effective introduction to economics to this day.

This book is so often mischaracterized and politicized that I suggest you to read it completely by yourself. This is a must read for every economist. You can get an audio version of this book to avoid lengthy read.

Surprisingly readable, September 11, 2007
If you have any interest at all in Economics, you'll want to go to the source. This is the source. Adam Smith lays the groundwork for the study of Economics in this very readable treatise.

Though he is discussing 18th century Britain, the topics he discusses have direct analogs in the modern American economy. Taxes, trade, money, monopoly, tarrifs, and international trade balance are all tackled with aplomb.

He really lays into Mercantilism and blasts the protectionism it engenders. Never anything less than a champion of the common man, Smith decrys monopolies and other taxes on those most unable to afford them. Though he seems to be a total free marketeer, he takes great pains to examine the types of taxes which would be useful and prudent for a government to levy.

Once or twice may be fine, but Smith uses this construction for almost every sentence in the book. It is just a stylistic gripe, but the length and complexity of each sentence make digesting the information quite a bit more difficult than it otherwise could have been. I would not be at all disappointed to see this book translated to a more modern style.

Again, if you're interested in Economics at all, this book is the place to start. There is so much good information here to be absorbed and pondered. I recommend it highly.

Seminal work from the father of economics, May 25, 2007
Nobody seriously involved in economics can do without this exhaustive work, originally published in five volumes as An Inquiry into the Nature and Causes of the Wealth of Nations. This classic is a pragmatic and accessible milestone in the history of economics. Its author, Adam Smith, is woven into every economics textbook. However, Smith's theories, which today often are recounted mostly in fragments, frequently incorrectly, reveal their entire social and economic innovative power only in context. Smith burst onto the scene at a time when absolutist national states monopolized the world's precious metal reserves and tried to increase their own wealth through stringent export policies. These states were motivated by an entirely new concept about national wealth: that it stemmed from the work of the country's people, not from gold. Based on that idea, economic markets should balance themselves as if guided by an "invisible hand," impelled by each individual's self-interest. The state has to provide only an orderly framework and specific public goods and services. Even though Smith's image of idealized economic and social harmony may have developed a few cracks over the course of time, his ideas have inspired many well-known economists during the past 250 years, including David Ricardo, Vilfredo Pareto, Friedrich August von Hayek and Milton Friedman. We highly recommend this seminal work.

Invislble Hand, December 7, 2008
This book is so widely cited and interpreted contrary to the author's original thought, that every economist should read it completely to avoid being misled by such incorrect interpretations.

First, let us take the "invisible hand" metaphor. When I have studied economy in the University, I was taught that almost the entire book is devoted to the "invisible hand" which means "self-corrective markets", "liberalism", "Laissez-faire" and "state non-intervention". After reading this book, I have found out that Adam Smith did use the term "invisible hand" only once in the entire book, in the discussion of domestic versus foreign trade.

To illustrate the point, let me quote the text where term "invisible hand" is used: "First, every individual endeavours to employ his capital as near home as he can, and consequently as much as he can in the support of domestic industry, provided always that he can thereby obtain the ordinary, or not a great deal less than the ordinary profits of stock. Thus, upon equal, or nearly equal profits, every wholesale merchant naturally prefers the home trade to the foreign trade of consumption, and the foreign trade of consumption to the carrying trade. In the home trade, his capital is never so long out of his sight as it frequently is in the foreign trade of consumption. [...]Secondly, every individual who employs his capital in the support of domestic industry, necessarily endeavours so to direct that industry, that its produce may be of the greatest possible value. [...]As every individual, therefore, endeavours as much as he can, both to employ his capital in the support of domestic industry, and so to direct that industry that its produce maybe of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it."

After reading this book, I have found out that Adam Smith was influenced by French Physiocrats. The Physiocrats saw the true wealth of a nation as determined by the surplus of agricultural production over and above that needed to support agriculture (by feeding farm labourers and so forth). Other forms of economic activity, such as manufacturing, were viewed as taking this surplus agricultural production and transforming it into new products, by using the surplus agricultural production to feed the workers who produced the extra goods. While these manufacturers and other non agricultural workers may be useful, they were seen as 'sterile' in that their income derives ultimately not from their own work, but from the surplus production of the agricultural sector.

I have found out that this book is not about "invisible hand" or "Laissez-faire". It is quite a complete study that covers almost every basic aspect of the economy, and remains an effective introduction to economics to this day.

This book is so often mischaracterized and politicized that I suggest you to read it completely by yourself. This is a must read for every economist. You can get an audio version of this book to avoid lengthy read.
... Read more

Editorial Review

A common denominator among most new traders is that, within six months of launching their new pursuit, they are out of money and out of trading. High-Probability Trading softens the impact of this "trader's tuition," detailing a comprehensive program for weathering those perilous first months and becoming a profitable trader. This no-nonsense book takes a uniquely blunt look at the realities of trading. Filled with real-life examples and intended for use by both short- and long-term traders, it explores each aspect of successful trading. ... Read more

Reviews

This book ties everything together, October 25, 2003
I've read some of the reviews (or should I say criticisms) of this book. They write that it's for beginners, there are just a couple of setups, and the obligatory discipline "cut your losses" warning chapter. I think people are missing the big picture.

If you want a detailed book about technical analysis, with lots of explanations, setups, etc. etc., there's "Technical Analysis Explained" by Martin J. Pring, or you can buy something by Jack Schwager or John Murphy.

If you want a book about building and testing a trading system, there's "Trade Your Way to Financial Freedom" by Van K. Tharp.

If you want a self-help book about discipline / psychology, there are a lot of those, some in the investment section, some in the psychology section.

If you want a book about day-trading, there are a ton of those as well.

The thing I like about this book is that everything is there in one place. At the end of each chapter, the author gives you pointers on what to do and what to avoid doing to reinforce your memory of the principles. The book is written in a very readable style. I got this book about three weeks ago, and by applying some of the principles I learned from the book, I made two profitable trades (which I would not have normally made) and avoided making a trade which I normally would have made. This trade would have been a loser. As a result of reading this book, I made and saved enough money in the last three weeks to buy ten copies of this book. Isn't that why we read these books???

solid, July 30, 2004
This is probably one of the most realistic books on what it takes to trade professionally. The author starts by correctly stating how difficult it is to trade successfully. He gives a time frame of 3 to 5 years, although he states it took him seven years to be consistently successful (he refers to himself as a slow learner).

He also discusses unrealistic expectations of beginning traders, who typically open accounts of $10,000 to $25,000, and expect to make a living trading such accounts. The author notes that the best fund managers on Wall Street, who can consistently return 35-40 percent, command salaries in the seven and eight figures. Even if a beginner could produce such returns their first year (extremely unlikely), could they live on 40 percent of $10,000? When Wall Street investment firms want to hire a trader, they go to the best business schools, recruit the top graduates, pay them maybe over $200,000 their first year just to sit in training classes for months. They tell these trainees they do not expect them to make any money for at least two years, and these are individuals who have access to some of the most experienced traders on Wall Street. When they do finally start trading, they are closely watched and given only modest amounts to trade. Would you be surprised to know that the average professional trader is successful on only approximately 50% of their trades? With some futures trading systems, it is closer to 30 percent. This is why taking losses quickly is the single most important aspect of successful trading.

The book also covers the basics of trading systems, including indicators, stops and exits, typical trading system characteristics, backtesting and system writing.

While he also touches on trading psychology, this is the weakest part of the book, and is mostly biased towards his own hurdles, which were taking too large a position in too many different markets. He refers to this as "overtrading", although I would define overtrading differently. For those looking for a book on trading psychology, try Mark Douglas' books, such as "The Disciplined Trader", and "Trading in the Zone".

Finally, the book is interspersed with anecdotes about real trades and traders, which are invaluable about how not to trade, and are often hilarious. One example, the author stated he once held positions in 15 different futures markets at one time on a $5000 account, although this seems impossible, if one was to meet the margin requirements of each market.

This is the one!, February 20, 2004
At the risk of being repetitive, I'm going to have to give this book another stellar review. Like many others, I have read a hundred other trading books and this one stands heads above the rest. The author is obviously an active trader and is not ashamed to divulge his weaknesses, even current ones. He covers all of the necessary bases (psychology, money management, risk management, setups, tradeable markets, etc.) without being exessively wordy. He is one of the few traders who can actually write relatively well. He manages to explain arcane and complex trading concepts using understandable and economical word choices. The review structure at the end of each chapter is an excellent technique to enhance the learning process.

Yes, most of the information is more useful to the novice trader but one neeeds a basic comprehensive understanding of trading to get the most benefit. On the flipside, since it is so inclusive, the book could serve as an excellent refresher for the seasoned trader. That trader might even come across a concept long forgotten and be able to turn it into a profitable strategy.

HPT has become my primer. I come back to it every few months to review sections that I feel weak in. I recommend this book to everyone who asks me for that "one book" that can get them a head start in learning to trade.

Great job Mr. Link! I eagerly await your next contribution to the world of trading literature.

Not High Probabilty more like basic trading, December 9, 2004
I would re-title this book to read, "Basic Trading Concepts". The book is nicely put together and does provide a good deal of information but the title is totally misleading in my opinion. Most of the material provided is general trading knowledge and not specific "high probability trading" methods. I was expecting actual techniques and specific entry and exit systems. If you're new to trading, this book will give you the basics. If you have been trading awhile, this book is mostly milk and no meat.

JD in Pennsylvania

The best trading book I ever read, January 16, 2004
I had read tens if not over a hundred trading books (and written many reviews here on Amazon), This is by far the best I ever picked. It really helps!

The author had covered most of the topics that should be included in a compleat guide of trading (trading psychology, uaage of TA, money management, trading system development....). Some of his key points are:-

1. Top traders are essentially pro gamblers who only bet when the odds are in their favor.
2. Trading must be dealt focusedly as an entrepreneurial business with loss (must be relatively smaller than profit) taken emotionlessly as regular business cost.
3. Good money management is the common denominator of all successful traders irrespective of their style.
4. TA is bascially a trend/fact finding process to be searched through multiple time frames, verified with different indicators, and that TA can be applied on indicators as well (trendline in MACD, and CD between price and MACD)

I personally like the no nonsense and humorous writing of the author much. The summary and point form "do's and dont's" in the end of every chapter did help me to memorise what I had studied for long. His clever use of graphs in the TA tools section is really outstanding. Believe me or not, his use of less than 10 pages on the explanation of MACD is a lot more powerful than many TA books that used up over 100 pages on this single topic.

In short, it's a must read for any player who wants to improve his/her edge over the ocean of competitors in the market. My salute to the author who writes me this excellent book.

The best I've read, July 29, 2006
For starters, I do not want to pick a fight, and I am not saying this book is by any means perfect, but I hope no one is influenced by Larry Livingstone's review dated May 18, 2006. In case you don't know, Larry Livingstone is the character in Lefevre's classic, "Reminiscences of a Stock Operator", which is itself a slightly fictionalized biography of the very real Jesse Livermore. Just so you'll know. Read his review and then come back.

Again, without spending my entire review responding to the "Larry's" criticism, let me just say that if you actually read the book, these criticisms will vanish. Link is not advising traders to be loose and wild and not worry about blowing your account, as "Larry" seems to imply, rather he is stating an undeniable, plain fact....many successful traders have at one point blown their accounts.....period! Cold, hard reality. Yes, me included. Had I read this book, however, I might have prevented that. "Larry's" other cherry-picked criticisms will fade away when you read the book and understand the context of some of the quotes "Larry" provided.

Moving on....as I said this is probably the best trading book I have ever read. As opposed to books like "The Master Swing Trader", this book is very well written (like it or not, this is important), very easy and interesting to read, very practical, and very informative. Nor is he a big Wall Street fund manager (at least the book is not written from that perspective) that operates in a completely different world than the average trader. It is a very practical and realistic book that you will be able to relate to. I have read many trading books including Market Wizards and Reminiscences, and I highly recommend them, but in reality how many of us actually operate at that level? These are good books and you should read them, but Link's "High Probability Trading" is aimed at the small trader and it will have an immediate impact on your trading.

Yes, most of what he teaches can be found elsewhere, but my response is that it can be found here too; and as I said, he brings it to you in a way that you can relate to and it will help you really understand the why and the how. Just having a list of rules is not as good as having someone give you a very good example of how to implement the rule and what can happen if you don't. This is why, in my opinion, High Probability Trading, for the average trader, is even superior to books as acclaimed as Market Wizards and Reminiscences.

Link's discussion of technical indicators is very brief, but I have to say it was in some ways far superior to other, much longer, items I have read about them. What he does better than others is that he shows you how to apply them. He gives you the proper uses, and limitations, of these indicators. Not many writers do that.... some make them out to be a crystal ball, while others tell you that they have no place whatsoever. I would disagree with both.

Link does not try to build himself up in this book like some writers do, rather he is very honest about his growth as a trader, which I find very refreshing. He tells some stories about his experiences, good and bad, his mistakes, his successes, his emotions, that you can immediately relate to. You will find yourself saying, "Yep, been there... done that."

Although the book is very well written and easy to read and understand, the main reason I found it to be the best book on trading I had ever read is very simple...... it was the most realistic book on trading I had ever read.

Unless you are already at the top of the trading world and can condescend to the rest of us, I suspect you will disagree with "Larry" and find this book very helpful. I wish I had read it about 5 years before it was written..

One other book I highly recommend is Stanley Kroll's "The Professional Commodity Trader". This book is a sleeper. Again, it is very well written and is very interesting to read.

Terrific daytrading book, May 27, 2006
Probably the best practical how-to book on the subject of daytrading stocks, indices, and futures contracts.

It's all technical - that is, chart-reading - but you get a much clearer idea of how to actually trade using a chart than you do out of all the classic technical analysis books. There is nothing in this book about chart patterns (triangles, cups, flags, etc.) or about candlestick formations. Perhaps the author doesn't consider those things worthwhile, but personally I find that knowing about them is at least helpful.

His mantra is trading with the trend of a higher time-frame than the one you are trading in and basically trying to capture the meat of the next wave after a correction in the direction of that trend in your trading time-frame. He uses trendlines and channels to find the best entries and exits. If there is no trend then you are in a range-bound market and should play the range reversals at the extremes - when this fails be prepared to play the break of the range without chasing it, which usually means waiting for a pullback (in which case you have now switched back to trend-following tactics). Breaks of channels in the higher time frame create a reversal in trend and are played in a similar manner.

There is alot of material on using oscilators correctly, especially Stochastics - not just looking for reversals when it crosses and turns from overbought and oversold like most people use it. He shows how it can be helpful in both trends and range-trading.

Interestingly enough, he includes some examples of "high probability trades" that are against the trend as well - although he always goes back to saying you are better off sticking to trades with the trend. (There are a few seemingly contradictions like that but this is still a great trading book.)

Link stresses over and over that top traders will have 50% losing trades. So what trading boils down to is a probability game like poker or backgammon. Your average winner has to be significantly higher than your average loser - and that's where picking the good setups comes into play. So you want to be stepping in where different types of traders and investors in different time frames all get signals in the same direction and will act as a collective force to move the market because of it. Even with that, still expect 50% losers so these spots must have reasonably tight stops that still give the market wiggle room but when the move happens it will usually be sustained enough to make up for all the losers plus some.

Link also acknowledges that it doesn't matter how large or small your profits are when you take them as long as you are systematically taking even smaller losses. This opens one's mind to different approaches that can all be successful.

The book lacks a clearly defined trading plan - it is up to the reader to develop one of his own from these concepts. But the building blocks of a successful plan are certainly contained herein.

[...]

one of the best trading books I've read, June 2, 2003
I've been trading for 15 years and I read as many trading books as I can, and I found High Probability Trading to be one of the best yet. There is no bull or get rich quick trading system in this book, instead the Author lays out some simple but often over looked principles of how to become a better trade. For example he stresses that trading with trend has always been the way to go and one should not get to fancy by trading the counterwaves. Its a simple prinicple but one that I can forget about at times. This book was a great refresher and taught me a few things about my trading, i highly recommend it to any trader.

Encourages the formation of a plan, March 24, 2005
I gave this book 5 stars for the very fact that its the first trading book I've read that emphasises the importance of having a *plan*.

This is not really a book about how to do technical analysis - there are libraries of books out there that you can use for that which treat the subject in a lot more depth.

Marcel makes no bones about the fact that you are likely to lose money for the first couple of years, but if you have a good plan and stick to it, learn from your winning and losing trades, keep a trading diary and adjust your technique, then you have a good chance of outperforming your peers.

So in essence, this is what the book is about - creating and backtesting your own trading strategy and the disciple that is necessary to succeed.

Great Trading Manual!, November 29, 2005
I have been trading for over 15 years. My timeframe is not day trading but intermediate term. Typically my trades span 3 to 4 weeks. By reading a lot of literature, doing my own backtesting and expensive real life lessons, my own investment style amazingly parallels those described in this excellent book. Whether your trading timeframe is days, weeks, months, or years, this is an excellent manual to keep at your side. After reading it, I assure you it will not be sitting gathering dust on your bookshelf! Some experienced traders like myself will find the book elementary only because we have independently arrived at the conclusions so ably presented. ... Read more

Editorial Review

From one of the world’s best-known development economists—an excoriating attack on the tragic hubris of the West’s efforts to improve the lot of the so-called developing world

In his previous book, The Elusive Quest for Growth, William Easterly criticized the utter ineffectiveness of Western organizations to mitigate global poverty, and he was promptly fired by his then-employer, the World Bank. The White Man’s Burden is his widely anticipated counterpunch—a brilliant and blistering indictment of the West’s economic policies for the world’s poor. Sometimes angry, sometimes irreverent, but always clear-eyed and rigorous, Easterly argues that we in the West need to face our own history of ineptitude and draw the proper conclusions, especially at a time when the question of our ability to transplant Western institutions has become one of the most pressing issues we face. ... Read more

Reviews

Good Intentions and the Road to Hell, June 19, 2006
William Easterly, a New York University economics professor who previously worked at the World Bank, divides the international development aid community into two groups: there are planners, who have grandiose large-scale utiopian plans for ending poverty, and there are searchers, who favor piecemeal interventions by finding things that actually work. Planners have good intentions but don't motivate anyone to carry out their plan or hold anyone responsible for getting results. Searchers, on the other hand, find out first what the poor need then try to meet the demand.

Easterly has special contempt for aging rock stars such as Bono and Bob Geldof for soliciting money for large anti-poverty programs, but he gets apoplectic when he talks about Jeffrey Sachs' book "The End of Poverty" - which he gave a scathing review in the Washington Post. Easterly does not believe that ending poverty is a valid policy goal. He says its like mandating that a cow should win the Kentucky Derby. Anger brings out some strange analogies. Sachs represents everything that Easterly thinks is wrong with the development community.

To drive home the point, Easterly argues how "the West spent $2.3 trillion in foreign aid over the last five decades and still had not managed to get 12 cent medicines to children to prevent half of all malaria deaths. The West spent $2.3 trillion and still had not managed to get $4 bed nets to poor families. The West spent $2.3 trillion and still had not managed to get $3 to each new mother to prevent five million child deaths."

Easterly likes repeating the $2.3 trillion to emphasize how the West keeps spending and getting very meager results. Let me add one of my own: the US has incurred $2.3 trillion worth of new debt in the last five years with very little to show for it. The question is: does this spending do good or ill? What would Africa and the rest of the developing world look like if this money had not been spent? Would they be prosperous and democratic? Easterly fails to explain why aid has done "so much ill." It is pretty obvious that many of the grand development schemes of the planners have failed, but it is not obvious that these societies would have been better off without aid.

The critique of large-scale planning made in the West may appeal, at first glance, to free traders who call for market solutions to solve the problems associated with poverty. However, he is also critical of those who attempt to "plan" markets. (Think of Sachs' "big bang" market schemes for Eastern Europe after the fall of the Berlin Wall.) His years at the World Bank have made him very cynical about imposing "Washington Consensus" on other countries.

The approach favored by Easterly is to examine each culture individually and offer aid specific to local conditions. Sounds good. He offers many case studies that are very compelling, yet it is difficult to draw many conclusions because they are specific to each situation. Many of his case studies showed that aid administered actually helped rather than hindered development. One of the conclusions drawn, however, is that healthcare and primary education are two areas where aid has been successful.

In the end, Easterly and Sachs have more in common than Easterly would like to acknowledge. They both believe that it is important for the West to give aid to the rest, and that it is important that those providing aid get results and be held accountable. Where they differ is that Easterly adamantly believes that the large scale planning administered by organizations such as the UN and the World Bank will never reach the people that need it. He might be right.

This book is an important contribution to reforming the development community.

Both some good points and some ranting, January 2, 2007
Easterly's central theme is that the West is spending a fortune on foreign aid yet cheap simple things (bed nets for $4, malaria medicine at 20c a dose) don't get delivered to the poor. Increasing spending isn't the answer as it isn't lack of money that is causing these failures. Easterly lays the blame on high-level utopian planning that is far too disjoint from what the poor need.

He presents data that shows that economic success isn't tied to aid delivery and that aid programs have done very little to help the poor. But the West keeps applying the same broken formulas. Easterly asserts that what is needed isn't more money, but better spending.

Easterly argues that it is easy to dream up grand utopian plans, but these are typically focused on making the donors feel good and ignore the realities of actual local situations and needs. There is no feedback loop from the intended recipients, so money is easily lost or wasted. He argues that more aid should be driven by what he calls "Searchers" (bottom-up pragmatists) and much less by "Planners" (top-down bureaucrats). The West shouldn't seek to reform countries or economies wholesale. Rather it should work on delivering lots of piecemeal localized improvements that can be individually analyzed, evaluated, and either abandoned or refined.

He gives examples of the vast bureaucratic efforts spent on aid summits, planning frameworks and reports. These consume lots of energy in both the aid organizations and (worse) in the over-burdened target governments. He recycles the amusing point that if you apply the standard doctrines of two of the largest aid agencies (the World Bank and the IMF) to the aid process itself, they would insist that it abandon central planning and grand schemes and instead move to privatization and market-based mechanisms.

He observes that many of the target governments are wildly dysfunctional. Aid money (like oil revenue) is treated as a resource that can be exploited. However, in his proposed solutions he tends to ignore that aspect. If governments have a tendency to steal or misspend their aid budgets, then donor groups are bound to demand detailed plans and reports. And I doubt if those governments will tolerate groups that try to bypass them. Unfortunately it is exactly those countries with the worst governments that most need help.

Easterly sometimes comes across as overly dogmatic in his emphasis on "Searchers" and his attacks on "Planners". However he does a good job of making his core points: the West should show much more humility, avoid grand plans and look for detailed programs that actually help the poor and allow for both feedback and remedy.

Rather than charity, teach Africa to create value and develop its wealth, March 18, 2006
"Give a man a fish and he won't go hungry for a day." The western world has sent a lot of 'fish' to Africa, well-intentioned charity, food, foreign aid, clothing, supplies. But too much of those 'fish' have ended up rotting in warehouses, in the hands of government officials and not people who need the fish, or putting local fisherman out of business, when they can't compete with free fish distribution.

"Teach a man to fish, but he won't go hungry again." Nice idea, but sometimes there aren't any fish in the sea, or the people don't live near water, or they end up overfishing the waters. Some western practices don't fit the climate or culture of Africa, so all the fishing instruction in the world won't solve the systemic problem.

"Teach a village to raise fish." Now we have something. A skill. A chance at economic development. Not for one person, for lots of persons. Something enduring. Africa needs help in learning to help itself. That doesn't mean that starving people should be ignored. It means that feeding them for a day, a month or a year does not solve the long-term problems of Africa. Worse, this charity leaves some people satisfied that they have done their share of social responsibility and leaves some people -- westerners and Africans --mad that fish are being given away.

Easterly shows that the first form of fish relief, however well-intentioned and executed, perhaps does more harm than good. And he knows that teaching fishing is sometimes not that helpful. But long-term, sustainable, wealth-creating, economic development works. Microenterprise, microfinance, granting people title to land that they can leverage into loans -- these are some of the tools that we can teach and that Africans can use. Yes, the west has done many, many things in Africa about which we can feel guilty, but charity is not the solution or the ablution.

Don't just give a person this book. Make sure he reads it.

Tracking the West's failures of foreign aid, June 24, 2006
Reviewed by Manfred Wolf, San Francisco Chronicle, Book Review, Sunday, March 19, 2006, pages M1 and M5.

William Easterly puts the failure of foreign aid down to a gigantic act of non-listening, of imposing grand schemes on hapless, desperate countries. Easterly, now a professor of economics at New York University, was for 16 years a senior research economist at the World Bank.

In his latest book, "The White Man's Burden," he sets himself against his former employers, as well as the International Monetary Fund, and by extension against such utopians as the economist Jeffrey Sachs, for being "Planners," who impose grandly conceived solutions that the recipients can't or won't implement and for which the donors are not held accountable. (That the most grandiose form of Planning, large-scale military intervention, is equally futile should not surprise anyone.)

When there are successes, these usually result from limited undertakings. Aid organizations can score with such projects as Food for Education in Bangladesh, a stipend for parents who send their children to school, or the Rural Roads Program in Peru, but these do not flow from grandiose schemes. More commonly, successes in the huge foreign aid programs of the past 50 years derive from "Searchers," people who devise small programs with limited goals -- vaccination schemes or sanitation improvements -- that often originate locally with people searching for remedies. Because the world's poorest
have the least clout, the need for Searchers is all the greater.

To illustrate one such Searcher, Easterly tells the story first related by John Stackhouse in his book "Out of Poverty and Into Something More Comfortable," of a Ugandan chemist, George B. Mpango. To combat undernourishment, Mpango developed a high-protein biscuit -- no thanks to the aid community, which sent instruments to the chemist's lab he didn't ask for and didn't want, "since donors give us what they have, not what we need." Worse still is that aid organizations often reject local initiatives, such as helping to fund a university in Ghana founded by a U.S.-educated entrepreneur. It's almost as if the aid agencies feel they know best, condescension apparently still clinging to these efforts as when Rudyard Kipling coined the phrase that gives this book its title.

The snapshot of the Ugandan chemist is one of many scattered throughout the book, sketches of successes and heartbreaks. Easterly is keenly aware of the tragedy of world poverty and clearly upset by the inability of so many to engage it. Most of the countries that have received huge amounts of foreign aid
are now poorer than ever, though of course AIDS and wars and bad governments have contributed to making them so.

"The White Man's Burden" is almost a reference work of solutions and dilemmas, histories and prospects. Easterly touches on many subjects, ranging from the complexities of aid bureaucracies to the political contradictions of recent Western policies to the relative success of Asian economies in the past few decades. His book is filled with charts and graphs but still written in the same engaging, detail-rich style that characterized his earlier "The Elusive Quest for Growth." Among his many details is the news that sometimes corporations do better than nongovernmental organizations, known as NGOs, or Western government agencies. Thus the Shell Foundation has fought the catastrophe of African indoor smoke by thinking like Searchers and helping to set up small enterprises to produce affordable smoke-reducing stoves that will actually be used by people who need them -- this from a charitable foundation created by Shell Oil.

Not that oil ever appears to be a blessing for an otherwise poor country. Easterly explains that oil revenues ensure that the well-connected and privileged fight harder against redistribution than they otherwise would. One should think there are other reasons as well for the curse of oil, for instance, in oil-rich countries the incentives for economic diversification lessen and poor people inevitably suffer from the presence of vast amounts of money, which their lack of skills keep them from sharing. But it's fascinating to read Easterly make the point that oil revenues and large amounts of for eign aid work about the same way and bring neither democratization nor prosperity.

Equally fascinating -- and downright counterintuitive -- is that poor, developing countries have a better chance at democracy and development than do those
burdened with great natural resources. This, too, points up the need for limited, manageable help. Limited solutions for specific problems are, of course, good and sensible, but Easterly doesn't fully address why, in Africa at least, even those attempts frequently fail: a cultural clash, perhaps, between donors and recipients, with the latter's loyalty often to tribe over community, family over country. Nationhood seems irrelevant. Postcolonial Africa's nations were artificially created and are now forced to live in -- and compete with -- a world of nation-states. They have been dragged into globalized economies where they perform poorly, while some of their people are mesmerized by images of life in Europe and America.

No wonder many of them try to rush the shores of Europe rather than build up their impoverished homelands, a movement of people that Easterly's otherwise excellent book does not take fully into account in its description of what has gone wrong with aid in particular and with relations in general between the West and the rest.

A Manfred Wolf teaches literature and the history of ideas at the Fromm Institute at the University of San Francisco.

Explains a lot, May 13, 2007
If you've ever asked yourself why so much of the world is so screwed up, you might want to read this book. It is said that author William Easterly was practically driven out of his position at the World Bank after positing some of his theories, and from the bit of experience I have had with international development agencies, I can well believe it.

In short, Easterly points to Western aid dollars as the source of much of the misery in the so-called "developing" world. He traces in particular the United States' policies of giving billions to corrupt, authoritarian regimes not because they could be relied upon to use the aid to help their peoples, but because they were of (often dubious) strategic importance to US foreign policy interests. It's a long, complicated story, but told in a straightforward way that makes this book engaging reading.

Easterly doesn't let the Europeans off the hook either, with England, France and Belgium faring especially poorly. If you saw the film Hotel Rwanda you will have some idea of the role that Belgium played in setting the stage for tribal warfare when it abruptly pulled out of the Congo area early last century. And then there is the perennial mess in the Middle East, a great deal of which, according to Easterly, is a legacy of England's bungling at border-drawing after WWI.

All of this is detailed in a chapter toward the end of the book called From Colonialism to Post-Modern Imperialism, which draws some thoughtful parallels between the meddling that the US is doing today in Iraq and various countries around the world, and similar forays conducted by the European powers in the 19th and early 20th centuries. This chapter alone is well worth the price of this well-written and enlightening book.

All you need to know about the failure of development aid, May 12, 2007
William Easterly has done it again. It's hard to believe that there would be much left to say about the mess that has been development aid after his devastating critique in The Elusive Quest for Growth. However, five more year of observation and research on Easterly's part have created an even more comprehensive picture of the problem than his earlier book.
Here is what I particularly liked about this new book:
* Less economic analysis (though there is still plenty to interest the serious reader) and more fascinating anecdotes, so this is more appropriate for the general reader than Elusive Quest.
* Same lively writing style; it's a page-turner.
* Wonderful case histories of sucessful countries like Botswana, thus a little more hopeful feel to this book.
* Marvelous histories of the colonial powers and their impact on the countries they conquered (now I finally know who the Moguls were and what they did to India and then what the British did to them and India...)
* A very sobering history of the impact of our military actions on poor countries
* A really funny section quoting endless, jargon-laden, non-specific silly UN and World Bank reports that underscores why international bureaucracies who deal with corrupt governments accomplish nothing
* Finally, although he denies that there are any big solutions, he does end the book with a few clever suggestions
No matter what your political leanings, if you care about the world's poor you need at the very least to be informed about the damage good intentions wrongly applied can do. This book will do that for you in a very entertaining manner.

"idealism, high expectations, disappointing results, cynical backlash", January 12, 2008
I have been a self-described Easterly fangirl since reading his excellent book The Elusive Quest for Growth. In that book, he had managed to be precise, supported, readable, humane and funny-- all at the same time. In the world of reading about development economics, this was no mean feat.

I had known that this book was out for a while, but had only gotten around to reading it after seeing Easterly here in Amsterdam. He was debating Jan Pronk about what he calls the difference between Planner- and Searcher-based methods of developmental aid. Planners, in his terms, prefer the sweeping top-down approaches to poverty eradication-- all governed by a central committee somewhere else. Searchers adopt a more piecemeal approach to solutions, looking from the bottom up without benefit (or as much benefit) from Utopian ideals. It was a very interesting debate. The audience was full of folks working in various NGOs and developmental organization. It inspired me enough to go ahead and buy The White Man's Burden.

The arguments that Easterly make feel so intuitively correct that they make me suspicious. The bottom line for him seems to be that real situations are individual, and solutions cannot be extrapolated from overriding principles. He is savage towards the unrealistic thinking of the neo-imperialists and unsparing of many of the political sacred cows. He points out that given limited resources, tradeoffs do have to be made. Too many people forget that even given unlimited funding (which is far from the case), resources can still be scarce-- attention, will power, distribution infrastructure, etc. He also says that if goals in aid programs are failing, then throwing more money at them will not help.

I think that Easterly's stand is often miscontrued based on the last point. I have heard detractors say that he is arguing towards limiting aid to the needy poor. There is no substantiation of that-- at least not in his books or in the lecture I attended. Instead, what he argues is that if unrealistic goals and cumbersome structures prevent aid from reaching the poorest, then adding more money on top of the pile will not fix the problem. For any experienced project managers out there, this is going to feel very "right". Easterly is not calling for less spending; he is calling for more sensible spending. He is calling for accountability, practicality, focus and honest evaluation. These are things that should be self-evident, but are apparently very difficult to achieve. He asks the very disturbing question whether the developed countries are more interested in selling their personal ideology in the form of a Utopian vision than they are interested in achieving real change on the ground where it is needed the most.

Other topics include examples of successful "Searcher" strategies for bringing change to the life of the poor; historical numbers looking at the effect of aid on growth; a discussion of the different aid agencies and their limitations; and some thinking about the role (or lack of one) in local governments when it comes to development initiatives.

The White Man's Burden is, as The Elusive Quest for Growth, precise, supported, readable, humane and funny. I think that it is in many respects a stronger book as it better integrates the stories of the poor with the structure. There are many fascinating pointers for further reading. I would have appreciated an annotated bibliography instead of just pulling references from the notes, but I guess that you cannot have everything that you want in a single book. Recommended reading.

Thought-provoking and memorable, June 4, 2007
As a former Peace Corps volunteer in Africa -- but someone without a lot of formal training in macroeconomics or knowledge of the politics and history of the IMF, World Bank, and associated other organizations -- I picked this book up hoping for a cogent and intelligent perspective on the "larger picture" driving what I observed on the ground. I wasn't disappointed.

Easterly arrives at many of the same conclusions I did, backed up with reams of analysis and a deep understanding of the nature of the IMF, World Bank, etc., as well as the historical roots explaining why they are the way they are. I found the book to be slow-going in parts, but that's probably more because much of the content was totally new to me: it's dense, but that's a good thing. And even though it is dense, I thought it was very readable.

One thing that I thought would have been valuable was more of a discussion about how a foreign policy oriented around a bottom-up, "Searcher" type approach could be sold. He acknowledges that the reason "Planner" solutions are so popular is that they make us feel good, like "something is being done" -- but, unfortunately, the psychological power of that is so strong that a fundamental shift in policy will not occur simply on the basis of rational evidence that it doesn't work. That said, I don't think it's impossible: it's just about appealing to a different aspect of our psychology. Peace Corps, for instance, I think does a pretty good job of selling the Searcher ethos, and it does so by emphasizing the small-scale stories of success, as well as the OTHER benefits of being a Searcher (such as learning from the other cultures). A Searcher-based foreign policy, on the larger scale, could sell itself similarly -- buzzwords like "empowerment" and "grassroots" spring to mind. Anyway, I would have appreciated more of a discussion about that (or, if these ideas are silly, a discussion of exactly why).

Still, this book is important reading for anyone interested in foreign policy and foreign aid. And it should be required reading for the people in charge of such things.

Intelligent critique of foreign aid policies, May 18, 2007
At the World Economic Forum in 2007, author William Easterly gave the audience some distressing news: The $2.3 trillion in aid sent to Africa since the 1950s had done nothing to increase Africa's GDP. It had been largely a waste of money. Bill Gates, who was sitting next to Easterly that day, admonished the author for focusing on narrowly economic benchmarks: "You don't eat GDP," Gates said petulantly. Easterly's riposte came a few days later in The Wall Street Journal, where he chided the world's richest college dropout for missing "the economics class that listed the components of GDP, such as food." Readers who enjoy such debates will love this acerbic, clearheaded book. Easterly, a former World Bank economist who is fervently committed to global prosperity, demolishes the myths that prop up ineffective efforts to help developing nations. He points his wrecking-ball at photo-op celebrities and utopian economists who feel that big plans and big aid budgets will eventually build big economies (the last 50 years of contrary evidence notwithstanding). Ah, you say, at least they are trying to do something good, while many others simply watch the impoverished world's agony in dismay. Instead, the author argues, only alternative, pinpointed aid tactics can succeed, but only if they use local knowledge and implementation. We recommend this to anyone interested in economic development and emerging markets, and to lovers of intelligent polemic on issues that matter.

Frustrating and Illuminating, September 3, 2007
I found The White Man's Burden frustrating and illuminating at the same time. I was frustrated by the fact that despite masses of foreign aid little seems to have helped Africa, Latin America, Asia, and the other areas known as "the Rest". It was illuminating in that William Easterly oes such a good job of analyzing the reasons why so much good will and so much money have accomplished so little.

Basically, Westerners who seek to help the rest of the world have largely been Planners, Easterly's term for people and organizations who think the way to help others is to help them become more like themselves. Despite historic, cultural, religious, and a host of other differences, the West tries to improve the Rest by trying to make it into a New West. On the other hand, there are the Searchers, who try to find ways to help and to help the Rest help itself. Unfortunately, too many agencies and too many powerful people are Planners, and far too few are Searchers. Easterly dissects the failures of the Planners and compares them with the successes of Searchers in a scholarly, well researched manner that leaves room for the occasional witticism.

As I read The White Man's Burden I recognized so many of the same problems that I, as a public school teacher, face dealing with bureaucracies full of Planners, who think the way to solve a problem is to come up with a big overall Scheme and throw tons of money around, usually unsuccessfully. Easterly has performed a valuable service by revealing the problem and identifying the solutions. Maybe someday the Searchers will be in charge! ... Read more

Editorial Review

More than a decade after establishing itself as the number-one book on international business etiquette, Kiss, Bow, or Shake Hands has been fully revised to reflect the profound global transformation that has occurred since its debut. In this new edition, author Terri Morrison McCarthy-the leading expert in this field-has included:

Editorial Review

Most businesses still operate according to a world view that hasn't changed since the start of the Industrial Revolution. Then, natural resources were abundant and labor was the limiting factor of production. But now, there's a surplus of people, while natural capital natural resources and the ecological systems that provide vital life-support services is scarce and relatively expensive.In this groundbreaking blueprint for a new economy, three leading business visionaries explain how the world is on the verge of a new industrial revolution. Natural Capitalism describes a future in which business and environmental interests increasingly overlap, and in which companies can improve their bottom lines, help solve environmental problems and feel better about what they do all at the same time.Citing hundreds of compelling stories from a wide array of sectors, the book shows how to realize benefits both for today's shareholders and for future generations and how, by firing the unproductive tons, gallons, and kilowatt-hours it's possible to keep the people who will foster the innovation that drives future improvement. ... Read more

Reviews

Natural Capitalism Right on the Money, February 1, 2000
In the summer of 1999, the Harvard Business Review treated the business community to a glimpse of a bold new model for business and industry in the 21st century. The HBR has been filling requests ever since for the article by Amory Lovins, L. Hunter Lovins and Paul Hawken titled "A Road Map for Natural Capitalism." The article described how businesses could profit by employing strategies built around a more productive use of natural resources. The authors explained in a very practical, yet compelling manner how these strategies could go a long way toward solving many current environmental problems.

Business readers and anyone concerned about the changing global economy and its impact on the ecosystem will want more than copies of the HBR article once they realize it was actually a tantalizing synopsis of the authors' new book, "Natural Capitalism: Creating the Next Industrial Revolution" (Little, Brown, 1999). This important book can take its place alongside such touchstone volumes as "Future Shock," "Megatrends " and "The New New." The authors describe in vivid detail how business and industry can gain competitive advantage through a new business model based on doing much more with much less.

The authors set out to prove that changing realities of the information economy and global competitiveness are already transforming industry and commerce in ways unforeseen even a few years ago. The new business model takes into account the values of all forms of "capital" including human, manufactured, financial, and natural. "Natural Capitalism" starts with an elegantly simple premise: economies need no longer be based on the idea that human capital is finite and natural resources are infinitely abundant when the obvious truth of the 21st Century is exactly the opposite.

With mounting confidence, Lovins, Lovins and Hawken predict that the latest industrial revolution will create "a vital economy that uses radically less material and energy." Businesses that recognize the trend toward this new type of industrialism will gain advantage over their less alert competitors. Those that postpone this shift will be left behind and will eventually, make themselves irrelevant in the new economy.

Theirs is not merely a detailed updating of Buckminster Fuller's "small is beautiful" thesis. Rather, the authors describe a step-by-step process of business restructuring that should result in more efficiency at the corporate, national and global level. Such a process, if carried out across several industries simultaneously, would make it much easier for governments to promote social equity and conserve or even restore the natural ecosystems reaching across traditional borders.

This next stage of industrialism, the authors' "natural capitalism," is founded on four core business strategies already being adopted by the most innovative corporations across the globe. The strategies suggest that companies need to:

1) employ technology and design innovations to use resources much more productively. This results, of course, in companies using fewer resources, reducing pollution, and setting the stage to create more jobs;

2) practice "biomimicry" by redesigning industrial systems to be more like biological systems, leading to an elimination of even the concept of waste;

3) shift from an economy based on goods and purchases to an economy based on service and flow. This concept leads to a quantum shift in how manufacturing companies service their clients, especially in terms of inventories, sales strategies, etc; and

4) reinvest in "natural capital" to sustain, restore and expand the resources on which industry, and ultimately all life, and therefore all livelihood, depends.

"Natural Capitalism" is not a "gloom and doom, industry vs. the environment" anti-consumerism rant. Neither do the authors fall into the trap of proposing a Pollyanna hypothesis that begins with "if only we could change our basic cultural values." Lovins, Lovins and Hawken make elegant use of facts and examples from several industrial sectors and actual case histories of large and small companies based in the US and overseas.

Consider the "Hypercar," a synthesis of emerging automobile technologies developed in 1991 by the Rocky Mountain Institute, the think tank founded by Amory and Hunter Lovins. Imagine "a family sedan, sport-utility, or pickup truck that combines Lexus comfort and refinement, Mercedes stiffness, Volvo safety, BMW acceleration, Taurus price, four-to eightfold improved fuel economy (that is, 80 to 200 miles per gallon), a 600 to 800 mile range between refuelings, and ZERO emissions."

If such technological innovations sound like eco-friendly pipe dreams, think again. Today, DaimlerChrysler, Ford, GM, Honda, Toyota, Volkswagen and others are actively competing to bring this revolutionary vehicle to the market within the next few years.

As global a corporate presence as DuPont is already feeling (and no doubt, influencing) a sea change in manufacturing philosophy. The Delaware-based chemical giant is on record in favor of "comprehensive resource productivity". In DuPont's words, "sustainable growth has to be focused on a functionality, not a product. The next major step toward sustainable growth is to improve the value of our products and services per unit of natural resources employed." To that end, DuPont is "down-gauging" its polyester film, making it thinner, stronger and more valuable so that it may sell less material at a higher price.

What the Lovins and Hawken have given us with "Natural Capitalism" is nothing less than an up-to-date business manual for the next century, complete with clear explanations and solid, real world examples. Their thinking finds common ground between business and environmental interests and makes the common sense case for how the two outlooks are merging into a new, practical, eco-friendly approach to making a profit.

Just as business and civic leaders in Atlanta and elsewhere are redefining how sprawling cities should grow, "Natural Capitalism" redefines how businesses and ultimately the entire planet should grow to sustain a prosperous and equitable quality of life for the indefinite future.

Beyond Darwin, January 4, 2000
As this new century begins, if there is only one book which everyone on the planet should read, it would be Natural Capitalism. Why is it so important? In my opinion, because it provides the most convincing, the most compelling argument in support of Wendell Berry's assertion that "what is good for the world will be good for us." Darwin's concept of natural selection becomes irrelevant if there is no environment in which such selection can occur. The authors introduce us to "The Next Industrial Revolution" with all oif its emerging possibilities. In subsequent chapters, they continue to examine natural capitalism in terms of "four central strategies": radical resource productivity, biomimicry, service and flow economy, and investment in it. According to the authors, natural capitalism "is about choices we can make that can start to tip economic and social outcomes in positive directions. And it is already occurring -- because it is necessary, possible, and practrical." For me, the information provided in Chapter 3 was almost incomprehensible in terms of the nature and extent of waste. Of the $9 trillion spent every year in the United States, at least $2 trillion is wasted annually. How? For example: Highway accidents ($150 billion), highway congestion ($100 billion in lost productivity), total hidden costs of driving (nearly $1 trillion), nonessential/fraudulent healthcare ($65 billion), inflated and unnecessary medical overhead ($250 billion), and crime ($450 billion). All of this waste can and should be reduced, if not eliminated. What the authors present, in effect, is a blueprint for the survival of the planet. All manner of statistical evidence supports their specific recommendations. Unless "The Next Industrial Revolution" succeeds in implementing those recommendations, natural capitalism will eventually be depleted ...and no one left to regret its loss.

A very detailed analysis of sustainability, July 18, 2006
Just a couple comments and caveats to add not covered in the in-depth Spotlight Reviews. First, this book is absolutely loaded with stats and data and provides a more rigerous, academic treatment of working towards more sustainable way to grow businesses and communities. The fact that the references at the end go on for 55 pages attest to this level of detail!). Given that the authors are from one of the most prominent "think tanks" of eco-capitalism - The Rocky Mountain Institute - explains this level of detail and expertise. But, it really can come across as a "brain dump" where every fact the authors knew of are piled into the chapters (whose origins are earlier position papers). So, if you really need hard data and lots of factoids, this book is a top, well-researched and dependable reference.

Another missed opportunity is its rather ineffective and non-visual layout - just page after page of small text (uhh). So much more could have been done to lay out the chapter divisions in an easier-to-read format. Like mining gold nuggets from tons of ore, extracting the main points from this tapestry of various position papers takes sifting through tons of text - and it is a voluminous text. But, if you are serious about this topic, this is one of the prominent, "must-have" references.

Alternatively, a somewhat less detailed, more headlined overview of "eco-capitalism" (the environmental crisis, renewable energy, hydrogen economy, eco-efficiency, sustainable cities and overall environmental economics) is ECO-ECONOMY by Lester R. Brown. It gives the reader an excellent overview of the problem and potential solutions along with a strong dose of both reality and inspiriation. Not all experts make great writers, but Brown seems to be both.

Compliments and Complement, November 9, 1999
Paul Hawken is an excellent writer, clear thinker and first-rate synthesizer; Amory Lovins is a genius; and Hunter Lovins is a world-class organizer and positive force. So it's not surprising that this team has written a very important, must-read book. Capitalism does have its advantages after all, but as it is currently practiced it will lead us to our collective grave. Fortunately the dynamic trio, shows better ways of doing business.

For those of us who aren't CEO sorts (and can't immediately implement the type of innovations Natural Capitalism advocates), yet who still want their financial life to move us in a positive direction, I highly recommend The Mindful Money Guide. This book is an excellent complement to Natural Capitalism as it thoughtfully guides us to a healthier (in all senses of the word) and simpler financial life. It's also very well written.

The One Book That Can Save Capitalism & The Planet, December 12, 2006
Edit of 19 Jan 08 to add links.

This book is pro-business, pro-market, and pro-life. It outlines how profits can be made by going green and getting in touch with the actual cost of goods and services. It demonstrates how efficiencies can produce a 71% per year after tax Return on Investment (ROI).

On page 261, the following quote summarizes the intellectual victory that this book represents over economic fundamentalism: "That theology treats living things as dead, nature as a nuisance, several billion years' design experience as casually discard able, and the future as worthless."

The three authors are "originals" whose genius dates back to the 1980's, and I am finding that the books written in the 1970's and 1980's were a quarter-century before their time of acceptance, and now pressing urgent and relevant.

They advocate a shift from a production economy that disregards the actual costs of goods, toward a service economy in which durability, ease of repair, and the elimination of waste transforms commerce so that we have sustainable profit, not short-term destructive profit.

The basic premise of the book is that in the next 100 years the population will double while available natural resources will drop by one half to three quarters.

The authors are damningly trenchant when they point out that we have taken just 300 years to consume 3.8 billion years of natural capital by turning scarce resources into permanent waste.

I am at one with these authors when they suggest that labor is now abundant--I for one believe that national leaders must demand full employment and cease substituting technology, which requires natural capital, for human capital. We need to reverse the process and restore full employment, community-based resource allocation.

In the course of two days with this book, I pulled 21 key ideas that I list here in tribute to these authors and their work:

1) Cars can generate electricity during the 90% of the time they are parked, and this will allow the replacement of ALL coal and nuclear plants

2) We waste 1 million pounds per person per year in the USA

3) Authors are saving business, not fighting business

4) Two trillion out of nine trillion in the total economy per year is waste of no value, including time spent in automobile gridlock

5) Real-time feedback is the number one resource saver

6) Biological processes create Kevlar strength silk (spiders) and walls (oysters)--we should emulate them instead of continuing our toxic ways.

7) Green buildings increase human productivity while reducing waste

8) Continuous education of designers and engineers is the single best investment for continually updating our ability to eliminate waste

9) Point to point air travel in smaller more numerous aircraft is a much more efficient alterative to the hub systems

10) We must end our perverse subsidies of wasteful agricultural, energy, forestry, fishery and other harmful practices by publicizing the foolish budget allocations

11) We should tax pollution and waste rather than income

12) Agricultural residues can be used to make paper, which can be recycled and substituted (e.g. electronic). We must end junk mail and unneeded packaging that outlasts its contents.

13) Restore localized agriculture, deep sustainable farming that does not deplete topsoil, get smart on water and fuel consumption.

14) Get a national water policy and water education, recover all rain (which can meet all of Africa's needs), use gray water; get a grip on toilets to include separate capture of urine and feces.

15) Protect the climate

16) Conserving energy is cheaper, faster, better than trying to produce more

17) Canceling or updating antiquated laws long overdue (for example, giving away billions of gold based on 1800 laws, for pennies)

18) Adjust prices to reflect external costs

19) Implement no fault insurance purchased at the pump

20) Create information feedback loops at all levels

21) Need systemic approach (what I call the ten threats, twelve policies, eight challengers) to avoid unintended spill-over consequences

22) The market cannot do it all. We need government.

Above all intelligence and information can make this happen. Simply labeling switches allows localized awareness and individual actions to save energy. The lack of accurate and up to date information is the largest correctible deficiency

I put this book down hoping that I might one day be able to take the secret intelligence budget of $60 billion a year, cut it by two thirds, and apply one third of that budget to implementing this book's ideas, and one third to creating a new form of global education that is continuous, free, online, in every language, and equally balanced between structured human teaching, interactive social networking, and self-paced online learning through serious games.

There is plenty of money and plenty of brainpower to save our planet and our quality of life while elevating the five billion poor, what we lack is inspired political transpartisan leadership, and a model, perhaps a model to be created in British Columbia, Washington, and Oregon.

I want to be part of this "big push" and am in awe of these authors and the big ideas they represent.

My top ten green to gold books:
The Limits to Growth
Seven Tomorrows
Silent Spring
Ecological Economics: Principles And Applications
High Noon 20 Global Problems, 20 Years to Solve Them
The Future of Life
Plan B 3.0: Mobilizing to Save Civilization, Third Edition
Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
Cradle to Cradle: Remaking the Way We Make Things

I would also point with enormous respect to books on green chemistry, beneficial bacteria, sustainable design, and what I think of as the "home rule" literature: an end to corporate personality, localized agriculture, localized credit (e.g. Interra Project), and an end to absentee landlords and mega farms that produce indigestible corn for cattle whose waste gets into our spinach, and for fuel (one tank of ethanol consumes enough corn to feed an individual for an entire year).

A Breath of Fresh Air, August 29, 2000
I thought this book was amazing- I came upon it in the most random way (another book by the same author was lying around my office) and, wow, it was worth it! I doubted that it could deliver on its sweeping claim from the first chapter, but deliver it did, and then some. Some of the most compelling ideas that I found were: The beautiful aquariums set into the architecture of a company headquarters- that was also a sewage treatment facility! The fact that simply changing the piping setup for installing a backup water pump can vastly improve the efficiency (and the bottom line)of a factory. And, perhaps the most eye-opening chapter for me, the city of Curitiba in Brazil that was completely renovated under the watch of visionary city planners with (for example) the most effective bus system in the world. If any of these things pique your curiosity, READ THIS BOOK. It goes from the most nitty-gritty considerations of what gadge wire should be used in building codes to the most far-reaching aspirations of how our civilization is capable of reforming itself. I am nineteen years old, I've read lots of books, and this is one of the five best, hands down. I have since checked out the Rocky Mountain Institute (the organization that produced the book) and I am hoping to intern there one day. That is how important Natural Capitalism is.

Response to review by John A. Matthews, April 1, 2001
I wish Mr. Matthews had read our book more carefully. Every factual claim he makes is incorrect. The book does mention industrial ecology four times, including the famous Kalundborg example in Denmark. Takeback/producer responsibility laws are also discussed, with specific reference to Japan and with German examples. Although Enron is mentioned in different contexts than he wishes, the chapter on markets does indeed discuss creative ways (many of them invented at Rocky Mountain Institute) to make markets in saved resources. While I fear we did not satisfy Mr. Matthews's preferences for emphasis and ideology, our book does not have the defects he ascribes to it. -- ABL

Possiblity for Peace in Our Time, March 18, 2000
Do you remember Cat Stevens' song, "Peace train gonna take this country/Come, take me home again"? When that song came out in my young adulthood, I felt it as somehow true. A few years ago Dolly Parton released a wonderful cover of the song. When I heard it I had the troubling realization that while I still had the hope, I no longer believed that this could happen in my lifetime.

The first chapter of Natural Capitalism led me to realize that I have been stuck in thinking of our natural resources of materials, methods, people and ideas in an unnecessarily limited way. Paul Hawken, Amory and L.Hunter Lovins explain how we do not have to resign ourselves to sustainable living only for the rich or only in miserly conditions. We have the clear and practical possibility of sufficiency and equity for all of family earth. I consider this a condition for peace, allowing right livelihood, social equity and justice for all.���

Editorial Review

Features forex market guidelines and sample trading plans

The fun and easy way to get started in currency trading

Want to capitalize on the growing forex market? This nuts-and-bolts guide gives you a step-by-step action plan for understanding and trading the forex market. It offers practical guidance and savvy tips in everything from comprehending currency quotes to using leverage, trading with fundamentals, and navigating technical analysis.

• Identify trading opportunities
• Understand what drives the market
• Choose a trading broker
• Execute a successful trade
• Minimize risk and maximize profit
• Analyze currency charts

Reviews

Good basics, but miss a HUGE point, June 24, 2009
Let me be honest here:

This book provides some really good advice about trading the forex market. Which currencies have what tendencies, which times and reports to look out for, how to manage trades and money, etc. It provides the basics for any beginner. But, if you are a beginner, you will NOT notice something EXTREMELY important that the authors of this book did not mention ON PURPOSE. The authors, in full disclosure, state they are associated with [...](i.e. Gain Capital). And while in the book they make it seem that since [...] is part of/is a(n) FCM/CFTC/NFA (basically throwing out terms to a beginner to make it seem safe and legit), the author's on purpose do not mention that [...]is NOT an ECN broker, and hence you'd think that with all those acronyms they'd be credible, but think otherwise. In real short, what this means is that if you are not an ECN broker, you are allowed to, and most disclose in very fine print hidden among pages of other details they know few will read, take on purpose trades opposite of yours (hedge), in order to make more profits and ensure that begineers get wiped out and even good traders don't last for the long term. There are many more terrible practices these bucketshops use like fishing for stops, spread manipulation, etc, and [...]has the "white gloves" implied in this book very much dirty. Just google it if you don't believe me.

Just thought I'd throw this out there for any beginners. Choose your books wisely, but don't trust everything they say, and make sure you know what they failed to say and why.

EDIT: I don't mean to pick on Gain Capital specifically. All I am saying is when you do go to choose ANY forex broker, keep my information in mind since it wasn't outlined in the book.

Edit#2: Just in case, another point that wasn't mentioned: rememmber that if your broker is not FDIC insured, and they go under, all your money with them will almost certainly never be seen again (don't fall for their sales/marketing ploys of "we're the biggest ones" or we have a safe and positive balance sheet; if you never heard of Enron, GM, WAMU, then you'd need to read a bit about them). The only FDIC insured FX broker I know of is CITIFxPro, which, if you read in fine print, is managed by Saxo Bank, not CitiBank.

Best Beginner Book on FX Trading Currently on the Market, February 3, 2008
Overall, I thought this book gives a great overview on how and when the Interbank FX market operates, a basic overview of technical analysis, and some useful tips on practical matters of trading like how to choose a broker/platform and what to consider when setting up a trade. Having traded the Forex market for over 2 years now and having read a number of books specific to Forex trading, I think this book is the best book geared toward novice traders currently available.

However, I felt this book could have done better in a few areas: it walks you through considerations to construct a trading plan but doesn't provide a detailed example of one (preferably the authors'). This book actually walks through a trade set up (shorting the USD/JPY) and details the things to consider, but it was picked seemingly at random (based on a double doji) and not from some back tested trading methodology. Also not covered in the book are tools to effectively back test strategies and what a sample trading journal should look like.

But like I said at the beginning, this book is a lot better than most of the other FX trading books you find on retail book stores/sites--books that are filled with marketing fluff and little practical guidelines to actual trading. Currency Trading for Dummies actually has a lot of substance and value for the novice trader.

Best Forex Trading Book Period!!!!!!!, January 31, 2008
I thought this book would be typical nuts and bolts book.I was soooo wrong.
This book is a book of strategy,fundamentals,mental game and a lot more. If you are just starting or a veteran purchase this book... It gives you those jewels that you hear and wonder," where that come from?". The indicator section is the best. So many traders are always trying out the new indicator. Truth be told they all are the same. Your overall package as a trader is what makes you profitable, not 50 moving averages crossing. I hope I helped someone to make a proper choice in a great overall book on Forex. Forex is the best market out here period, but the books and information available are lacking real substance. Do not let the title fool you. This book is written by owners of Forex brokerages. They hold nothing back. This book is for dummies and pros a like.

Currency Trading Primer, August 31, 2007
Covers the field of currency trading for a beginner very extensively. Take it together with "Technical Analysis for Dummies", and exercise on a few demo currency trading accounts for about three months. Then you can start trading on a real account like a real pro.

Currency trading for dummies and intelligent people alike, January 25, 2009
For the money, this book is worth every cent. Prior to reading this book, I had only read one other book on currency trading. The first book I read was unfortunately a sales pitch for the author's retail software. After reading this book, I regained confidence in the idea that one could gain objective information from a beginners guide to FOREX.

I have an undergraduate background in international business and economics and learned a tremendous deal about how the actual mechanics of the FOREX market work as opposed to the theory behind fundamental analysis, FED policy, interest rates, inflation, and the like.

I highly recommend this book as a beginners guide to currency trading. There were many things that I read which whetted my appetite to learn more about the field. As far as my opinion goes based on further reading of trading and analysis of markets, I don't believe that this book will teach you how to become a profitable trader but it will definitely give you a solid foundation to build upon.

Great for Newcomers to the Foreign Exchange, April 7, 2008
The authors provide a great overview of trading in the Forex market, and I would definitely recommend it to anyone new to the field (like me). It provides enough education to get you motivated to get started, and helps you decide what specific topics you'd like to research further. Read this book first before making any other purchase on the topic.

Good! But it could be better!, February 19, 2009
MINUSES:
1."American" language.
If you live in Europe, you will have some problems with authors' expressions.
2.Sometimes- illogical and chaotic writing style.
One theme can begin in chapter3, then to continue in chapter6, and then end in chapter9.
3.Some terms are not explained.
4.Weak chapter about technical analysis.
5.Few and weak trading setups.
6.Mistakes.
I found 2-3. (I have no time, to explain those.)

PLUSES:
1.The most exhaustive book about forex in book market.
2.This book converts you from dummy to intermediate immediately after reading.
3.In this book there is important information you will not find in other books or sites.


It is valuable book, but it could be better and I hope-next editions will be better!

So- I highly recommend this book to all forex dummies!
If you are forex dummy- start with this book!

Don't be fooled by the title., January 9, 2009
You only need to read the 'about the authors' section to know you are about to be well informed by two very successful individuals with deep experience in the forex market. It's a good and easy read. While reading it you feel like you're being handed the keys to the kingdom, and you are, to a certain extent. I personally felt a great sense of excitement while reading it. Here is a book that is truly giving you a great overview of all that you'll need to learn and investigate further in order to be successful in the forex market. For anyone looking for a 'Dummies' book, you're getting so much more here than you bargained for(in a good way) for your money.

At first I was annoyed a bit by some of the repetitiveness, but as the read went on I realized that it actually helped in the memorizing and driving home different points. I think I only fast forwarded maybe 10 pages throughout the entire book, which is really good for someone with a short attention span like me.

I only gave it 4 stars because I tend to read the negative reviews more so than the positive ones and make my decisions on those. For like only $16. bucks or whatever it was you can't go wrong with this one.

Remember, the only difference between the 70% losers and the 11.5% winners is knowledge, and putting in the work to make it happen. It'll become reality for you if you keep at it and don't give up. Stay in it for the long haul.

Good Introduction, October 25, 2009
Any time an investment vehicle hits the front page of the WSJ where relatively unsophisticated individual investors are "making millions" - as currency trading did in the Fall of 2009 - I need to look into the next potential individual investor nightmare.

The book was written by the founders of [...]. As the title notes, this is a book on trading, not hedging - and the authors do a great job in giving an overview of the currency trading markets. In a relatively brief 325 pages or so, they discuss in some level of detail:

* What the FOREX market is
* How it works
* Macroeconomic factors impacting currency rates
* Fundamental analysis techniques
* Technical analysis - including charting, trend analysis, candlesticks
* Developing a logical trading plan
* Trade execution - includinga couple of examples
* Common mistakes and best practices
* Risk Management
* Other resources

The relatively high leverage levels in currency trading (100:1 is common) lend to the potential of high risk, high return trading strategies. The authors are not shy about pointing out the risks and the recurring theme of having a trading plan.

I also agree with a number of the other reviewers that the authors do tend to use a lot of terms (both FX and economic) without real adequate definition, and a few more trading examples would be helpful. Nevertheless, if individual traders follow the advice in the book - particularly around these two subjects (including post-trade analysis) - they shouldn't get burned completely by a very sophisticated and reasonably efficient market. If you are looking to get into FOREX trading, and are new to it, read this book and follow the authors' advice on planning and risk.

A bit of a mugs game but if you are going to do it, know what you are doing., July 4, 2009
Currency trading seems to be a bit of mugs game - I would advise against getting into it based on my own experience. I made some very big gains and then lost it all but have to say that there was a lot of randomness to it. It is easy to make money when a trend goes your way. But trends end.

This book gives practical enough information about the trading side but won't really help you to make money. You really have to know what you are doing. ... Read more

Editorial Review

Reviews

ECONNED, March 3, 2010
I've written quite a bit about the financial crisis, and God knows I've read nearly every book on the subject, and I have no hesitation in saying that if there is one book that gets it whole, and gets it right, and is THE book for the intelligent, thoughtful reader to turn to, it is ECONNED. This is not an anecdotal recitation of deal gossip (like, for example, Sorkin's book); it's not "source-based" journalism reflective of the way certain participants in the dire events that unfolded in 2007-2009 wish themselves to be seen. It lays out, in what is easily as clear, as direct, as smart and with as much force of fact as any financial writing today how exactly the fun and games that have nearly wrecked our economy and the lives of so many of us went down. Yves Smith is, unlike so many other writers feeding off the crisis, writing about it from the inside: with an unfailing grasp of where the details (where the devil lurks) fit into the larger pattern of financial perfidy and destruction, in this Doomsday Machine that Wall Street put together. The intelligent reader will understand that if you want to know why you're suffering from acute ptomaine, you have to understand what went into the sausage you got it from. And then you have to be made to see plain the kind of restaurant or market that serves up this toxic offal. And then the regulatory failures that allow such places to be licensed. We have undergone one of the great crises in this nation's history. It needs to be seen plain and understood. Deadline-driven blahblahblah won't get the job done. But ECONNED does. I cannot recommend it highly enough.

Great ECON Blogger Now in Book Form, March 3, 2010
I have been a huge fan of author Yves Smith's Naked Capitalism blog for years now, and this book is a major triumph, putting in one place and fully developing the major themes that Smith has explored on her blog over the course of the recent financial crisis. While this might appear to be well-plowed territory, Smith tells it as an economics story that is really a story of a failed democracy. The linchpin of her work is the ascendant power of Wall Street over Main Street during the Greenspan era and now the Bernanke era. Complicit with politicians, financial regulators, and the revolving door of government service, the big Wall Street firms and banks have, according to Smith, seized the political process to serve their narrow, financial interests instead of those interests that serve a well-functioning polity. However, despite the seemingly inflammatory thesis, this book is no rant. Smith, an industry insider, is one of the smartest and expert observers of the flawed process that we now have, and the book is loaded with incisive explanations that pull it all together for the average reader in clear and at times thrilling language. In the broadest sense, this is a moral tract as much as an economics and political one. The moral outrage, while controlled and polite, is palpable on every page. In essence, this is a deeply informed book that does what economics and political tracts almost never do: it tugs at the heart as well as at the mind.

How the Invisible Hand is picking our pockets!, March 3, 2010
I was skeptical that we needed another book on the current financial crisis. But Econned provides a different and invaluable take on the issues. The book shows how corporate and governmental misunderstanding -- coupled with misuse of free market ideology -- enabled predatory practices in the financial services industry, and how current systems can't correct the problems. The book held my interest more than most economics and business books with its anecdotes, historic perspective, and Smith's engaging (sometimes irreverent) writing style.

While Econned covers technical points on economics and financial instruments, it's jargon-free enough that I can share this one with my non-business friends. And I plan to share it, since the explanations enable the author to build the case by Chapter 9 of how one company in particular structured operations to maximize its own profits while devastating major economic sectors. The book achieves a hat-trick of sorts: cogently explaining how and why the current policies are flawed, naming names and revealing exactly how some players took advantage of the flaws, and showing how current reform proposals need to be changed to fix the problem.

In the great tradition of investigative journalism, March 7, 2010
"The result has been a massive transfer of wealth, with its centerpiece the greatest theft from the public purse in history. This campaign has been far too consistent and calculated to brand it with the traditional label, "spin". This manipulation of public perception can only be called propaganda. Only when we, the public, are able to call the underlying realities by their proper names--extortion, capture, looting, propaganda--can we begin to root them out." -- Yves Smith, Econned

Econned is the story of how our financial system has become a mass ruse, allowing Wall Street and the largest banks to become predatory, treating their clients as lambs to be fleeced and fatted calves to be slaughtered. It is the story of how a very small group of people gained complete control over the American, and much of the global economy, driving it into the ground, then walking away with trillions of more dollars, while the economy remains on life-support.

Econned is an excellent read and needs to be read by all. It is the story of a criminal class, who have separated themselves from the majority to seek their own profits. It is the story of how our political economy is broken. In the end, it is a call to the American people, in the great tradition of this republic, to step-up and fix it.

Conned or just ripped off?, April 17, 2010
The basic premise of the book is that economic theory facilitated the current pathology of Wall Street that lead to the 2008 meltdown. This cannot really be true.

Why? Because we have had sociopaths extracting money from people via the financial markets a lot longer than economics as a study even existed, and certainly before the post WWII "mathefication" of economics. If economics did not exist, you would still see much of the behavior that we see today. [Read "This Time is Different" to get a history of banking crises and panics on a global scale]. However, one could certainly see economists as the "useful fools" that facilitated the emergence of a market based, rather than rules based financial system, that allowed the predatory behavior to occur again, by providong the rationale to remove the regulations put in place after the banking collapses in the Great Depression.

That aside, where this book truly excels, is the explanation of what CDOs and CDSs are, and how their development was a, if not the, proximate cause of the 2008 meltdown. The story that Smith weaves is cogent and well written. If main street read this book widely, politicians doing the bidding of Wall Street would be seriously reconsidering their actions to wrist slap the banks and instead put in some serious regulations to control the industry. The only thing that politicians fear more than loss of funding for their elections is an electorate that is mad as hell and going to sweep them out of office for not attending to the needs of their constituents, rather than special interests.

Read this book just for the clear explanation of what happened in the previous decade and use it to understand how Congress is [or more accurately insn't] dealing with the problem.

It's the theory, stupid, March 19, 2010
Yves Smith does a credible job of exposing the underlying issue with the current financial crisis, and that is that the neo-classical theory has been proved wrong again. And yet the purveyors of this nonsense are still in denial. Some still argue that this failure was due to too much government control, too much regulation; despite the fact, as Smith points out, that the vast bulk of the financial instruments that have caused this disaster were in fact unregulated. What we currently have is a group of academics that are heavily invested in the current theory/paradigm and cannot denounce it, without denouncing their life's work. They are wedded to the modern equivalent of the phlogiston theory. Evidence will not persuade them that they are wrong. As Kuhn pointed out paradigms are not overthrown, they die away as the believers die away. Unfortunately in economics the death rate is much too slow.
The moral of this tale is that you can tinker with regulations and banking rules, but unless we fix the underlying economic theory then we will relive this again in a few years. It really is the theory, stupid.

Neoclassical economics as a universal door opener for financial oligarchy, September 25, 2010
There are many good reviews of the book published already and I don't want to repeat them. But I think there is one aspect of the book that was not well covered in the published reviews and which I think is tremendously important and makes the book a class of its own: the use of neoclassical economics as a universal door opener for financial oligarchy. I hope that the term "econned" will became a new word in English language.

Neoclassical economics has become the modern religion with its own priests, sacred texts and a scheme of salvation. It was a successful attempt to legitimize the unlimited rule of financial oligarchy by using quasi-mathematical, oversimplified and detached for reality models. The net result is a new brand of theology, which proved to be pretty powerful in influencing people and capturing governments("cognitive regulatory capture"). Like Marxism, neoclassical economics is a triumph of ideology over science. It was much more profitable though: those who were the most successful in driving this Trojan horse into the gates were remunerated on the level of Wall Street traders.

Economics is essentially a political science. And politics is about perception. Neo-classical economics is all about manipulating the perception in such a way as to untie hands of banking elite to plunder the country (and get some cramps from the table for themselves). Yves contributed to our understanding how "These F#@king Guys" as Jon Steward defined them, economics professors from Chicago, Harvard, Columbia, Princeton and some other places warmed by flow of money from banks for specific services provided managed to serve as a fifth column helping Wall Street to plunder the country. The rhetorical question that a special counsel to the U.S. Army, Joseph Welch, asked Senator McCarthy: "Have you no sense of decency?" applies.

The main effect of neoclassical economics is elevating unregulated ( "free" in neoclassic economics speak) markets into the key mechanism for distribution of the results of economic activity with banks as all-powerful middlemen and sedating any opposition with pseudo-mathematical mumbo-jumbo. Complexity was used as a powerful smoke screen to conceal greed and incompetence. As a result financial giants were able to loot almost all sectors of economics with impunity and without any remorse, not unlike the brutal conquerors in Middle Ages.

The key to the success of this nationwide looting is that people should be brainwashed/indoctrinated to believe that by some alchemical process, maximum level of greed results in maximum prosperity for all. Collapse of the USSR helped in this respect driving the message home: look how the alternative ended, when in reality the USSR was a neo-feudal society. But the exquisite irony here is that Bolsheviks-style ideological brainwashing was applied very successfully to the large part of the US population (especially student population) using neo-classical economics instead of Marxism (which by-and-large was also a pseudo-religious economic theory with slightly different priests and the plan of salvation ;-). The application of badly constructed mathematical models proved to be a powerful tool for distorting reality in a certain, desirable for financial elite direction. One of the many definitions of Ponzi Scheme is "transfer liabilities to unwilling others." The use of detached from reality mathematical models fits this definition pretty well.

The key idea here is that neoclassical economists are not and never have been scientists: much like Marxist economists they always were just high priests of a dangerous cult -- neoliberalism -- and they are more then eager to stretch the truth for the benefit of the sect (and indirectly to their own benefit). All-in-all this is not unlike Lysenkoism: state support was and still is here, it is just working more subtly via ostracism, without open repressions. Look at Shiller story on p.9.

I think that one of lasting insights provided by Econned is the demonstration how the US society was taken hostage by the ideological views of the neoclassical economic school that has dominated the field at least for 30 or may be even 50 years. And that this ideological coup d'�tat was initiated and financed by banking establishment who was a puppeteer behind the curtain. This is not unlike the capture of Russia by Bolsheviks supported by German intelligence services (and Bolshevics rule lasted slightly longer -- 65 years). Bolsheviks were just adherents of similar wrapped in the mantle of economic theory religious cult, abeit more dangerous and destructive for the people of Russia then neoclassical economics is for the people of the USA. Quoting Marx we can say "History repeats itself, first as tragedy, second as farce".

That also means that there is no easy way out of the current situation. Ideologies are sticky and can lead to the collapse of society rather then peaceful evolution.

Empirically validated account of 2008-9 financial meltdown, March 23, 2010
ECONNED is the most deeply researched and empirically validated account of the financial meltdown of 2008-2009 and how its unaddressed causes predict similar crises to come. As a long-time Wall Street veteran, Yves Smith through her influential blog "Naked Capitalism" lucidly explains to her over 2500,000 unique visitors each month exactly what games market players use and how their "innovations" evolved over the years to take the rest of us to the cleaners. Smith is that unusual combination of scholar, expert, participant and teacher, who writes with a clarifying sense of moral outrage and disgust at the decline of ethics on Wall Street and financial markets. What makes ECONNED so valuable is Smith's deep grasp of how faulty, outdated theories underlying economics led to reliance on faulty mathematical approaches and bogus asset valuation models derived from the ideologies of "efficient markets" and "rational actors."

Many others have examined Modern Portfolio Theory (MPT), Capital Asset Pricing Models, Value at Risk, even the famous Black-Scholes Options Pricing models, and exposed them as based on unreal assumptions and extrapolations of past market behavior. Robert Nadeau, Herman Daly, Steve Keen, Nassim Nicholas Taleb, Pablo Triana and I have ploughed this ground. Even earlier, Hyman Minsky, Herbert Simon, John Maynard Keynes and Thorstein Veblen exposed the same theoretical economics house of cards. For over a century, economists have ignored these critiques, including those from physicist Fritjof Capra, mathematician-historian of science Nicholas Georgescu-Roegen and Nobelist chemist Frederick Soddy. Never a science, the economics profession expanded, colonizing other disciplines from psychology, brain science, anthropology to complexity and systems analysis - now bestriding decision-making in both the public and private sectors.

Yves Smith endorses many of the obvious reforms still opposed by the financial lobby and stymied by financial campaign money to Congress members. They include separating retail deposit-taking banking and regulating its activities as a public utility; banning rating agencies from being paid by issuers of securities they rate; gradually raising the costs to issuers of credit default swaps to guarantee their promises; raising bank capital adequacy reserves, reducing leverage and other reforms. Throughout, she interweaves her revelations about Wall Street shenanigans with deep analysis of causes, deficient theoretical underpinnings, the gradual devolution of capital markets in a race to the ethical bottom.

Yves Smith is silent on the growing calls for financial transaction taxes, as I have proposed for decades (see The UN: Policy and Financial Alternatives, 1995, 1996, and Building a Win-Win World, 1996, now an e-book). She also misses the efforts of many real Nobel prize winners, as well as Nassim Taleb, mathematician Ralph Abraham, economic historian Robert Nadeau, myself and even Peter Nobel, descendent of Alfred Nobel, to de-link the phony "Nobel Memorial Prize in Economics," set up by the central bank of Sweden to legitimize economics as a "science," from the real Nobels. Nor does she stray outside of the "money box" to examine the deeper paradigm problem of our corrupted, overloaded money circuits. We see money printed daily on TV, but we often miss the huge volume of transactions now made electronically in online barter worldwide, amplifying the existing barter or counter trade which is traditionally estimated as up to 25% of all global trade. The new plans to bypass Wall Street (see [...]) include the plans in Michigan and other states to create state-owned banks like that of North Dakota, local credit and the many programs like time banking and currencies such as the Berkshares in Massachusetts. These trading platforms lie beyond money circuits and will continue to speed the transition from fossil fuels to the Solar Age, including using new, inflation-proof currencies based on energy: KWHs and BTUs.

Yet, this courageous book is the best guide to tackling the unwarranted power and unbridled greed of the bloated financial sectors preying on our real economies. Read it!

Hazel Henderson, Ethical Markets: Growing the Green Economy, The Politics of the Solar Age, Alternatives to Economics

Whose looking after our interests?, March 9, 2010
Roseanne Rosannadanna used to say "I'm sorry, never mind" and we'd howl with laughter.

On the other hand when Alan Greenspan sheepishly delivered his version in October `08, "The whole intellectual edifice...collapsed in the summer of last year.", the reaction was more WTF?

To help understand what the Oracle might have meant and what it means to us , Yves Smith examines that edifice, piece by piece, player by player (Fed Treasury, ratings agencies, bankers, think tanks) to describe a kind of con that resulted from adopting flawed psuedo-scientific economic theories that drove monetary and (de)regulatory policy.

Those policy choices had consequences. For example, she describes an underreported strategy that employed some of the derivative `innovations' that accelerated the flood of money into subprime mortgages just at the point where it was becoming obvious to anyone with a pulse, including policymakers, that this ship was going down, and soon. The money needed to keep the lending programs alive was provided by those investors who were clever enough to game the system to pump and dump subprime.

This turns the conventional wisdom that the bubble is the fault of greedy homebuyers on its head and lays responsibility back where it belongs, at the feet of policy makers and the bankers we've protected. That critical point needs to be heard, loudly and frequently as we try to evaluate solutions to both the systemic banking crisis and the foreclosure crisis dumped on the government, and us, as a result of this economic belief system.

One of the best books available for understanding the financial crisis, September 22, 2010
ECONNED is near the top of the list of books which should re required reading for anyone needing an understanding of what happend to cause the financial crisis, how it developed and why no one in authority acted in any meaningful way to repair the flaws in the system. Yves Smith understands the system and is a brilliant "explainer". ECONNED is an excellent place for someone to start to come to grips with the "real world" of political finance. There are other books which should be included in order to fully appreciate just how far down the road toward financial and political armageddon we have been walked -- most with no real understanding of why or how it happened. Some of them are: Bad Money by Kevin Phillips; A Demon of Our Own Design by Richard Bookstaber; Debunking Economics by Steve Keen; The Myth of the Free Market by Mark A. Martinez; The Collapse of Complex Societies by Joseph Tainter; Free Lunch by David Cay Johnson; and, Contagion by John R. Talbott -- and many more. (see links below)

However, anyone seriously interested in the whys and wherefores behind the crisis should, above all, read Hyman P. Minsky's Stabilizing an Unstable Economy. Minsky, Keen and Yves Smith are among the few who truly understood the brilliance of John Maynard Keynes (mostly thanks to Minsky) and just how his economic theory was distorted, abused and finally blamed for all that is currently wrong with our political economy. It is probably too late to actually "fix" the problems which are and will continue dragging the empire down, but it is never too late to come to an understanding of why it is happening and what the consequences are likely to be for all of us.

In addition to the books mentioned, there are a number of excellent blogs which are currently providing the best and most current information on the state of the economy. Among the best are Yves Smith's Naked Capitalism; Dave Cohen's The Decline Of The Empire; Calculated Risk; and, at times (it's quirky Libertarianism) Zero Hedge. Also of interest is Yahoo's Tech Ticker and the world's best newspaper, The Financial Times (which is indispensible for news of the world - not just for finance). Rest assured that you will not find any useful or even accurate information staying gluded to the cable news / finance channels - these are now almost entirely "infotainment". So, if you truly want to be informed find the good authors who know what they are writing about, buy and read their books and, when available, patronize their web sites - you, and the rest of us will benefit enormously from this patronage.

A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial InnovationStabilizing an Unstable EconomyBad Money: Reckless Finance, Failed Politics, and the Global Crisis of American CapitalismDebunking Economics: The Naked Emperor of the Social SciencesThe Myth of the Free Market: The Role of the State in a Capitalist EconomyThe Collapse of Complex Societies (New Studies in Archaeology)Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and StickYou with the Bill)Contagion: The Financial Epidemic That is Sweeping the Global Economy... and How to Protect Yourself from It ... Read more

Editorial Review

"The hour of capitalism's greatest triumph" writes Hernando de Soto, "is, in the eyes of four-fifths of humanity, its hour of crisis." In The Mystery of Capital, the world-famous Peruvian economist takes up the question that, more than any other, is central to one of the most crucial problems the world faces today: Why do some countries succeed at capitalism while others fail?

In strong opposition to the popular view that success is determined by cultural differences, de Soto finds that it actually has everything to do with the legal structure of property and property rights. Every developed nation in the world at one time went through the transformation from predominantly informal, extralegal ownership to a formal, unified legal property system. In the West we've forgotten that creating this system is what also allowed people everywhere to leverage property into wealth. This persuasive book revolutionizes our understanding of capital and points the way to a major transformation of the world economy. ... Read more

Reviews

Two Cheers for de Soto, November 25, 2000
Attempts to explain why the 3rd world (and the 2nd world, now that communism has largely collapsed) is different from the developed world tend to fall between two poles. At one end are those who seek an Archimedean point--a single underlying cause which, once grasped, will allow us to quickly move developing countries up the socio-economic ladder. Such explanations have the virtue of being useful to people who actually work in 'development', because they convince us that we know how to produce fundamental change. But they run the risk of oversimplifying and, if taken as a guide to policy, of raising expectations only to see them dashed by the complexities and historical quirkiness of the real world.

At the other pole are holistic, multifaceted explanations, taking into account history, culture, economics, religion--the whole nine yards. Such accounts may be more intellectually satisfying, but often lead to frustration by convincing us that the problems are too complicated, too resistant to quick fixes, for practical solutions.

The Mystery of Capital falls for the most part in the first camp. It's author, Hernando de Soto, is one of the 3rd World's most dedicated and intelligent reformers. He wants desperately to do something to help the poor, and has been heroically influential--and successful--in arguing against the failed statist solutions long in vogue in Latin America. Now he wants to move beyond criticism to a positive agenda for change. De Soto's impeccably pro-capitalist credentials make his initial criticism especially convincing: actual capitalism in most of the world is restricted to a small elite, while most remain on the outside looking in.

The question is whether de Soto's solution is equally convincing. He does not believe poverty is due to the evil intentions of capitalists or capitalist countries (though he acknowledges that powerful interests in developing countries do not want to make the system more inclusive--a subject which could use more discussion). Nor is it because of culture or any inherent faults in the poor, or in poor countries. No, the real problem lies in a kind of intellectual or historical blindness, which has kept everyone from seeing what the real source of wealth is: real property, or more exactly well-defined and socially accepted property rights. Once a society has this, it has the secret of capital, since these assets can then be used to generate loans, credit, insurance, liabilities and the whole apparatus of capitalism.

It is hard to argue, looking at the real experience of the undeveloped or maldeveloped world, that the lack of property rights is not a huge impediment to economic growth. De Soto and his team have done tremendous work in documenting exactly how this holds back and frustrates the poor and disenfranchised.

But it is equally hard to believe that this is the key or only reason. More accurately, it seems--from de Soto's own account of what is required--that having property rights is a sort of 'meta-cause'. It depends on such a host of other developments in the economy, in society, in the political system (where access historically often depended on property, limited to a few), in the legal system, in the informal norms and mores, that it is hardly practical to point to it as 'the solution' to 3rd world poverty. For this reason, it seems unlikely that simply pointing out that developed countries have complex systems of property rights, though useful, will be enough to allow for the development of similar systems in the developing world.

If de Soto is right, why is China developing so fast, without anything like the formal, all-encompassing property system he thinks is essential? Why did European economic development begin to outpace the rest of the world centuries before the property systems which, he points out, in most Western countries were only arrived at within the last 100 years?

As a recipe for action, The Mystery of Capital is excellent in pointing to a dimension of development that has been neglected, and for its path-breaking research on the ground, discovering what it takes to bring the newly urbanized poor into the modern economy. But as a satisfying account of what ultimately causes poverty and why some countries are rich and others are not, it falls short. For this, one should go to books like David Landes' The Wealth and Poverty of Nations, or Jared Diamond's Guns, Germs and Steel.

Trickle-Up Economics, October 13, 2000
The Mystery of Capital, by Hernando DeSoto, could be among the most important books on economics of any century. DeSoto notes that more than a decade after the fall of Marxism, the expected capitalist revolution has not occurred. Capitalism has been successful only in the developed nations and has made little progress in the third world or in the former communist states.

He and his team are convinced that the problem is the lack of well defined property rights. He notes that the poor in under-developed countries have assets, but that their real property is often owned informally, and thus cannot be used to generate capital. As a result, the crucial role of real property is simply absent in under-developed countries.

He proposes the obvious solution --- formalization of informal property rights and notes that acquisition of property through informal means (squatting) has a storied history in the United States and other developed nations. DeSoto understands that formalization will be politically difficult, but points out that both rich and poor will benefit economically. One might call it "trickle up economics."

Finally, formal property rights are under attack in developed nations, through overly intrusive land use and environmental regulations. It is well to reflect upon the potential for slipping toward a system that allows virtual squatters to seize or nullify property rights through regulation, threatening a principal source of national income.

Wendell Cox

This Ain't Your Father's Economics!, January 31, 2004
In the past five years I've read a shade under a thousand books, and this is easily the most important of them. In it, Peruvian economist de Soto sets out to do nothing less than explain why capitalism has worked in the West and been more or less a total disaster in the Third World and former Communist states. This has long been a pivotal question for anyone interested in the world beyond their own back yard, and there have been plenty of attempts to explain it before (often in terms of history, geography, culture, race, etc.). However, de Soto's is the most compelling and logically argued answer I've come across. But it's not just me. I don't generally quote other reviews, but my general reaction echoes the most respected policy journals, newspapers, and magazines, who tend to repeat the same words in their reviews:"revolutionary", "provocative", "extraordinary", "convincing", "stunning", "powerful", "thoughtful". Perhaps my favorite line comes from the Toronto Globe and Mail: "De Soto demolishes the entire edifice of postwar development economics, and replaces it with the answers bright young people everywhere have been demanding." Of course readers (especially those on the left) will have to swallow a few basic premises from the very beginning, such as "Capitalism stands alone as the only feasible way to rationally organize a modern economy" and "As all plausible alternatives to capitalism have now evaporated, we are finally in a position to study capital dispassionately and carefully." And most importantly, "Capital is the force that raises the productivity of labor and creates the wealth of nations.... it is the one thing that the poor countries of the world cannot seem to produce for themselves no matter how eagerly their people engage in all the other activities that characterize a capitalist economy." No matter how badly some of us may want to hold on to cherished ideals of collectivist economies, the reality is that at present these are only viable on a micro scale. For the moment, capitalism has won, and the only question is how to make it work to improve the lives of the bulk of the world. De Soto writes: "I do not view capitalism as a credo. Much more important to me are freedom, compassion for the poor, respect for the social contract, and equal opportunity. But for the moment, to achieve those goals, capitalism is the only game in town. It is the only system we know that provides us with the tools required to create massive surplus value."

According to De Soto, the problem outside the West is that while the poor have plenty of assets (land, homes, businesses), these assets lie overwhelmingly in the extralegal, informal realm. De Soto's on the ground research reveals that this is the result of an accelerated process of urbanization and population growth, coupled with the inability of legal systems to adapt to the reality of how people live. What has happened is that throughout the Third World, the costs of making assets legal (obtaining proper title to a house, registering a business, etc.), are so prohibitive both in terms of time and money, that the assets end up being what de Soto calls"dead capital." In the West, a web of financial and legal networks enable people to use their assets to create further wealth, through such tools as mortgages, publicly traded stocks, and the like. Outside the West, most people live and work outside the kind of invisible asset management infrastructure that we take for granted, and thus are unable to use their assets for the "representational purposes" we are able to. Thus the full set of capitalist tools are not available to them and it becomes incredibly hard to realize any kind of upward mobility.

One of the key sections of the book is "The Missing Lessons of U.S. History", in which de Soto demonstrates how the US faced the exact same challenge several hundred years ago. The difference is that the legal system was flexible enough over a century and a half to realign itself with the reality being created on the ground by an energetic citizenry. However, it occurred over the long-term and long ago, and has thus been forgotten by history. What de Soto says needs to be understood is that the less developed nations of today are trying to accomplish the same thing over a much shorter time and with much greater populations, and without a clear understanding of how the West managed to do it. The ultimate challenge is raising the social awareness and political backing necessary to implement major legal change in the face of resistance from an entrenched bureaucracy and elites who benefit from the status quo. This is a daunting and provocative challenge-but not impossible.

Of course, all of the above is greatly simplified, so anyone interested in the state of the world should read it for themselves. De Soto's writing is remarkably clear (especially for an economist), and no background in economics or law is needed to follow his argument. There is a little repetition here and there, but always in the service of making sure the reader doesn't miss the big picture. In the end, whether you agree with his thesis or not, I guarantee it'll challenge your preconceived notions about global capitalism.

A book by an economist, May 26, 2001
The Mystery of Capital is recommended, among others, by no less than Milton Friedman, Ronald Coase, Margaret Thatcher, and William F. Buckley Jr. That's not why you should read the book. De Soto examines a necessary and misunderstood topic: why are poor countries poor? His arguments and insights make the book a necessary read for the economist, or other educated person.

The main point of The Mystery of Capital is that the seemingly intractable and hopeless situations in Third World countries is due in large part to one common problem: the issue of property rights. Macroeconomic policies make piecemeal improvements (or may improve nothing at all). Money is not the source of the wealth in a nation. Capital is the source of the wealth of nations! Facilitating the proper legal environment is an integral part of the creation and growth of capital, something First World nations had to develop, and something de Soto argues that Third World nations can develop.

The book gets a bit dry in the latter half, but is definitely worth the read. De Soto covers legal ramifications and reforms that will help build a bridge for "dead capital" to be converted to "live capital". The Mystery of Capital will be a surprise for some, because of de Soto's synopses here and there about what life is like for those who live in Third World countries, and the enormous amount of (untapped) wealth the people of Third World Nations possess.

De Soto is a decent economist, in part because he draws from so many disciplines and sources. He also did a prodigious amount of observation and collection of data (hardly an ivory tower academic). If you have an interest in developmental economics, law and economics, entrepreneurship, History of Thought, Economic History (especially that of the U.S.), or political science, among other areas, The Mystery of Capital is especially for you. I recommend the book to any social scientist - the book is so well done and relevant that you may find yourself developing an interest in any of the above!

econ

Brilliant, September 14, 2000
I spent 5 years in Cambodia doing development/legal reform work and never could figure out why it was so often frustrating and kept running into dead ends. I only wish I had had this book at the beginning of my time there. It reveals what needs to be done to bring the third world out of poverty. Full of simple but powerful ideas. I only hope the development bureaucracy will adopt it. Sound property laws enable land and other assets currently not marketable, saleable or mortgageable to be used as collateral for enterprises (as in the West), and there is more of such property out there in the world than all the Western aid since the beginning of time to all other countries! The author has done his homework on the ground and has compelling and important ideas. An interesting read even if you are not involved in this area.

Valuable if you're interested in 3rd world countries, July 12, 2002
Why Capitalism failed everywhere but succeeded in the West? This is a question that haunts many politicians and economists in 3rd world countries and in the West as well. Eventually the mystery became a quarrel between the two worlds, having the third claiming that Capitalism is just a hoax for the West to tap into their trifling fortunes, and the first claiming that 3rd world countries are failing to implement Capitalism efficiently.

The author of this book, Hernando De Soto, is siding with the second team in this dispute. And for that purpose he extends a very strong argument, which is that 3rd world countries failed to utilize the most basic element of Capitalism. And that would be Capital itself!

De Soto defines what he calls "Dead Capital" as property and real estate that is not fungible and can serve only in its most basic usage. Capital goes dead when the government fails to establish a real estate system that is accessible to the common public and is appropriate to the people and their property. What De Soto found after years of research and study is that in most developing and ex-communist countries the real estate systems are troublesome, drastically complicated, and out of touch with the real world. These systems nurtured a burgeoning extralegal style of living, where capital and businesses are not adherent to the legal systems of those countries. Instead, they work based on laws and regulations the people developed themselves among their social circles.

De Soto extends many shocking statistical information proving that 3rd world countries posses vast amounts of dead capital in their extralegal sectors. The author describes this capital as dead because property in extralegal sectors cannot serve as collateral for loans, are not fungible, and their transactions are not protected by the law. De Soto believes that the poor people living in extralegal sectors of 3rd world countries are the real entrepreneurs of their countries. They are very innovative in creating jobs and forming their own systems of protecting assets and their transactions. The author says that the biggest mistake of their governments is that they are trying to enforce the legal system on them when they should adopt their systems instead.

But how come the West never encountered this problem, you wonder. Wrong, the author tells you. The West did go through this and had to sort out many extralegal property and real estate into the legal system. But the West didn't enforce the law on extralegal property, instead they adopted the various extralegal systems and integrated them into the law. The author extends a thorough research in the U.S. history to explain in detail what created the problem of extralegal property and how the Americans overcame it.

One thing you'll notice if you read the book to that point is that the book is too long for its topic. And even though it's little less than 300 pages, but by page 150 I felt that the author had said everything he wanted to say. I believe that once an author begins to say "like I said in chapter x" numerous times he should stop immediately.

However this is a valuable book indeed and I learned a lot of lessons from it. De Soto is a man who will not make a claim without being able to back it with intensive and thorough research and study. His arguments are sound and make a great deal of sense.

If you're interested in the economies of 3rd world and ex-communist countries then I recommend buying this book. This book might fail to appeal you otherwise.

de Sota supplies one component for economic growth, April 15, 2002
The Mystery of Capital attempts to "reopen the exploration of the source of capital and thus explain how to correct the economic failures of poor countries." I believe the author makes an interesting argument within the book concerning the failure of capitalism to catch on in developing and post-communist countries. His argument deals with institutions we here in the West take for granted-property rights and other legal institutions. The connection between these legal institutions and economic growth is clear-and de Sota is clear on this point as well.

He states that an individual living outside the West faces an impenetrable wall of rules that bar them from legally established social and economic activities-such as deleterious bureaucracies that retard growth by wielding red-tape. De Sota sent teams to Peru, the Philippines, Egypt, and Haiti and they experienced firsthand how it takes several years to obtain legal verification of assets-years compared to days here in the West. Under these burdens, individuals create new laws-extralegal laws. These social contracts have created a vibrant but undercapitalized sector. This sector is known in economic layman's terms as the underground or informal economy. The author estimates that over half on the inhabitants in developing countries engage in this sector-using Dead Capital. The value of the assets in the informal markets are huge-surpassing the assets of rich countries sometimes. De Sota has brought attention to the core of the problem-he then states that the solution can be found at the heart of the countries.

He supplies the formula to fix the backwardness of the nascent capitalist nations. The first objective is to unify the many social contracts already existing in the extralegal sector into one, all encompassing social contract-by listening to the "barking dogs", or the people. Past attempts with this aim have failed because they have lacked the legitimacy and support from the current extralegal world. De Sota creates a bridge to fix this dilemma-a bridge that integrates old social property customs into a new all encompassing social contract. By working with their people, government leaders can forge a new regulatory framework. The second task is a task of a political nature because the plan outlined above requires the support of the poor, the elite, and the lawyers. The poor will gain the most because they will greatly increase their economic lifestyles with a more unified social property system that will enable them to use their assets as full functioning capital. The elite will harvest gains as well; they will benefit from an expanded market and growing capitalist economy. The lawyers must not use the current law, but instead fine-tune the law and change it to make it work for all.

De Sota's real world studies and solutions make sense in my mind. He identified a problem and supplied the solution. He may fall short though in his solution because a complex capitalist economy requires much more infrastructure than only property rights-of course I mean other forms of capital, such as human capital. By De Sota is on the right tract; a capitalist economy demands strict and discrete property laws that enable individuals to utilize their assets. His premise is right-under capitalism, the rich get richer, and the poor get poorer. In the third world, the poor don't have access to their assets, and they thus flounder in the extralegal sector.

Several important points, but de Soto oversells and is mind-numbingly repetitive, February 4, 2006
De Soto fundamentally argues that the reason poor countries are poor is because they have bad property rights: it's incredibly difficult for poor people (specifically, recent urban migrants) to get legal title to their land. As a result, the poor make "extralegal" arrangements, squatting on and using land that neighbors (but not the government) recognize as theirs. But because they don't own the land, they can't get a mortgage on their house to start a business, electricity and water companies are less likely to reliably provide services, the government has difficulty taxing them because they don't have a legal address, and so on. And so on.

It's a very important point but de Soto oversells, arguing with exaggerated (and oft-repeated) ideological claims but weak empirical evidence that solving this problem will actually enrich the poor.

He occasionally shares insights from his interesting field work. For example, he has helped businesses in Peru to navigate the overwhelming bureaucracy and become legal, and he has found that most businesses would rather be legal and pay taxes than be illegal and pay bribes: a useful bit of empirical information, but those gems appear all too occasionally.

Before reading this entire book, I recommend going to the website of de Soto's foundation (the Institute for Liberty and Democracy at www.ild.org.pe) and reading the main point there (in one tenth the words).

Filling in the gap between theory and reality., January 12, 2001
The Mystery of Capital attempts to explain the reasons why a capitalist system has not favored all people in third world nations in the same degree. Although Hernando de Soto focuses primarily in urban areas, he explains that there are far too many, if not difficult, obstacles for most citizens of third world countries to truly benefit from a capitalistic system. He has research poor neighborhoods in third world nations, and has found plenty of dead capital that could be put to use for the benefit of all people in such nations, if only politicians and lawmakers realize the enormous potential. Apparently, the value of property and extralegal businesses are far greater than the aggregate value of decades of foreign direct investments into those third world countries researched. Such assets are considered dead capital because they have been obtained or developed extralegally. Buildings and businesses exist, but they were not properly registered with the corresponding authorities, and in most cases developed in Government-owned land. A seemingly vibrant extralegal economy goes unnoticed. Why? The level of bureaucracy is overbearing, and therefore it becomes expensive for most people to go through the necessary steps for property establishing a business.

Hernando de Soto does not give you a definite method as to how to unlock "hidden capital", but it does give guidelines for developing a meaningful way to turn such unregistered assets into capital; the basis of a capitalistic system. He also offers some history as to how this kind of predicament was tackled by lawmakers in developed nations such as the United States and England. By using history, Hernando de Soto attempts to fill in the gap between theory and reality.

Simple but Revolutionary, August 12, 2001
The implications of De Soto's book are simple but revolutionary: economic and social development will not be achieved by throwing money at the problem but by dramatically changing the legal systems to allow and encourage the efficient and legal exchange of capital.

De Soto thoroughly documents his arguments estimating that "the total value of real estate held but not legally owned by the poor of the Third World and former communist nations is at least $9.3 trillion." $9.3 million is a staggering number -- especially in the context that it is forty-six times all the World Bank loans in the past 3 decades.

De Soto follows the processes and legal barriers to gaining title on property: to gain property rights and construction permits in Egypt can take up to 14 years and that it can take up to 4112 days to gain a five year lease in Haiti! With the amount of time and money required, people have skipped the process of legalizing their property resulting in their lack of liquidity.

De Soto speaks with the authority of a practitioner having put in place the groundwork of formalization in Peru with significant results. Is this truly the panacea to world poverty as De Soto comes very close to arguing? Given the results and the dead capital that exist in the world, it may very well be.

With the increasing number of violent protesters who will stop at nothing but the complete annhilation of capitalism, De Soto stands firm in his arguments that the problems are not with the concept of capitalism but the legal systems to allow for the creation of capital. For this reason, De Soto's The Mystery of Capital will be always be unpopular and attacked by those who cannot look beyond their own ideologies to see his greater message. ... Read more

Editorial Review

For many years now China's economy has seemed unstoppable. A slow appreciation of the renminbi in 2007 brought wave upon wave of liquidity into China and allowed its companies and banks to raise hundreds of billions in dollars via stock market listings. State banks that had started the new century as bankrupt relics of a communist past became the darlings of international investors.�

Even the collapse of Lehman Brothers in 2008 and the ensuing global financial crisis seemed to have little impact on China as the government quickly responded with a huge stimulus package. But the Lehman collapse was a dramatic wake up call to the Chinese leadership. This model of bank and capital market reform had been studiously emulated for more than a decade and had brought great benefits to China. But now, although they believed it to be bankrupt, the Chinese government were bereft of new ideas. In the face of the global financial crisis the government returned to what it knows best, massive state intervention via the banking system. Ten years of banking and capital market reforms were dead.

In Red Capitalism, Carl Walter and Fraser Howie detail how the Chinese government reformed and modeled its financial system in the 30 years since it began its policy of engagement with the west. Instead of a stable series of policies producing steady growth, China's financial sector has boomed and gone bust with regularity in each decade. The latest decade is little different. Chinese banks have become objects of political struggle while they totter under balance sheets bloated by the excessive state-directed lending and bond issuance of 2009.

Looking forward, the government's response to the global financial crisis has created a banking system the stability of which can be maintained only behind the walls of a non-convertible currency, a myriad of off-balance sheet arrangements with non-public state entities and the strong support of its best borrowers--the politically potent National Champions--who are the greatest beneficiaries of the financial status quo.

China's financial system is not a model for the west and, indeed, is not a sustainable arrangement for China itself as it seeks increasingly to assert its influence internationally. This is not a story of impending collapse, but of frustrated reforms that suggests that any full opening and meaningful reform of the financial sector is not, indeed cannot be, on the government's agenda anytime soon. ... Read more

Editorial Review

Route 312 is the Chinese Route 66. It flows three thousand miles from east to west, passing through the factory towns of the coastal areas, through the rural heart of China, then up into the Gobi Desert, where it merges with the Old Silk Road. The highway witnesses every part of the social and economic revolution that is turning China upside down.

In this utterly surprising and deeply personal book, acclaimed National Public Radio reporter Rob Gifford, a fluent Mandarin speaker, takes the dramatic journey along Route 312 from its start in the boomtown of Shanghai to its end on the border with Kazakhstan. Gifford reveals the rich mosaic of modern Chinese life in all its contradictions, as he poses the crucial questions that all of us are asking about China: Will it really be the next global superpower? Is it as solid and as powerful as it looks from the outside? And who are the ordinary Chinese people, to whom the twenty-first century is supposed to belong?

Gifford is not alone on his journey. The largest migration in human history is taking place along highways such as Route 312, as tens of millions of people leave their homes in search of work. He sees signs of the booming urban economy everywhere, but he also uncovers many of the country’s frailties, and some of the deep-seated problems that could derail China’s rise.

The whole compelling adventure is told through the cast of colorful characters Gifford meets: garrulous talk-show hosts and ambitious yuppies, impoverished peasants and tragic prostitutes, cell-phone salesmen, AIDS patients, and Tibetan monks. He rides with members of a Shanghai jeep club, hitchhikes across the Gobi desert, and sings karaoke with migrant workers at truck stops along the way.

As he recounts his travels along Route 312, Rob Gifford gives a face to what has historically, for Westerners, been a faceless country and breathes life into a nation that is so often reduced to economic statistics. Finally, he sounds a warning that all is not well in the Chinese heartlands, that serious problems lie ahead, and that the future of the West has become inextricably linked with the fate of 1.3 billion Chinese people.

“Informative, delightful, and powerfully moving . . . Rob Gifford’s acute powers of observation, his sense of humor and adventure, and his determination to explore the wrenching dilemmas of China’s explosive development open readers’ eyes and reward their minds.”
–Robert A. Kapp, president, U.S.-China Business Council, 1994-2004


From the Hardcover edition. ... Read more

Reviews

4.5 Stars... Slightly different take on China adds new perspectives, August 11, 2007
I have been reading quite a few books on China, as I am fascinated with and intruiged by the country's amazing economic transformation, and the potential consequences elsewhere in the world, including here in the US. (Among the better ones are China Shakes the World by James Kygny as well as The Elephant and the Dragon by Robyn Meredith). If you listen regularly to NPR Morning Edition and All Things Considered, Rob Gifford will be a familiar voice.

In "China Road: A Journey Into the Future of a Rising Power" (344 pages), Gifford, who has had a lifelong fascination with China and speaks Mandarin fluently, takes us on a journey across China on Road 312, the Chinese equivalent of our Route 66. Starting in Shanghai and working his way west, Gifford meets ordinary and not-so-ordinary Chinese and simply lets them do the talking. It makes for compelling reading. Talking to a well-known radio talk-show host in Shanghai, the host remarks that "morality--a sense of what's right and wrong--doesn't matter anymore".

At some point in his journey Gifford runs into a man holding a big sign that reads ANTICORRUPTION JOURNEY ACROSS CHINA. The man tells Gifford that "You see, in the West, people have a moral standard that is inside them. It is built into them. Chinese people do not have that moral standard within them. If there is nothing external stopping them, they just do whatever they want for themselves, regardless of right and wrong".

When Gifford runs into an Indian national, he hopes to have a discussion about how things are evolving in India versus in China, but the man is not interested in having the discussion. Gifford then dryly writes "So in the end, I have the conversation with myself over dinner and I conclude that I don't want to be a Chinese peasant OR an Indian peasant. But if I have to take a side, despite all the massive problems of rural China, I'll go for the sweet and sour pork over the chicken biryani any day of the week". Gifford spends a fair amount of time giving thought whether China can ever become a real democracy. Looking back at the 13th century, Gifford writes "There are many ways in which China was far head of Europe, in terms of technological development and prosperity. But for some reason, their system never developed any real checks on state power, and since in the West these checks did emerge, it has become a real contention between the two sides".

I could go on giving more quotes from the book, but suffice it to say that Gifford brings story upon story, and observation upon observation about China the culture, the people, the country, just superb. I was in China earlier this year and happen to be in a number of the cities that Gifford talks about in the book, in particular Shanghai, Suzhou, Nanjing and Xi'an, and this book brought back some great memories. This book is not just a "travelogue", but instead a wonderful mix of facts and observations. Highly recommended for anyone interested in China!

Rob Gifford dissects China beautifully., May 30, 2007
Following the "silk road" is an adventure in itself, and one covered extremely well in other travel books, but here Rob Gifford is cutting across China with one underlying question: Where is China heading? The answers are a little bit scary. As we travel with Gifford (what a great travel partner he'd make!) we meet many people who show by turn resilience, entrepreneurship but also something a lot more desperate: an element that has been described elsewhere not so much as 'dog eat dog' but 'man eat man'.

The writing here is attractive, and often very entertaining, but the picture that Gifford reports isn't always a pretty one. With the world's biggest economy ballooning as it is, there's still a burgeoning, clambering desperation among the poor to get onto the ladder before the opportunities elude them. In some of the poorer, more remote areas, this fact - one can readily see, is already causing sad social consequences. There's a tone of fascinating regret here: a question about whether the price of progress is always worth it. Well recommended.

Entertaining, Informative, Thought-provoking, May 31, 2008
I am very glad that I read China Road before the recent earthquake because the background that the book gave me on Chinese culture and politics has helped me better understand the news coverage of the disaster. This is the mark of a book that is truly worth reading, in that it helps the reader deduce meaning from world events.

The premise and structure of the book are appealing. The author, Rob Gifford, an American journalist, hitchhikes across China on Route 312, China's equivalent of the US's Route 66, and writes about the places he visits and the people he meets. Along the way, he muses about China's history, its current building boom, its social structures and traditions, its problems related to its emergence as a global economy and its likely future as a world power. This makes for fascinating reading and, certainly for me, an entertaining way of getting to know a nation and a people who are increasingly affecting the lives of everyone on Earth.

As soon as I heard about the collapse of school buildings in the poorer provinces of China during last month's earthquake, I realized that many parents would have just lost their only child due to China's one-child policy. This, it seemed to me, would be one of the things more likely to create the kind of anger and dissatisfaction that the government will be unable to buy off by putting more consumer goods into the hands of China's growing middle-class. Sure enough. The news continues to be full of stories about the anger and resentment felt by many lower middle class parents whose children died in poorly constructed schools while the children of the wealthy survived because they attended well-built schools that did not fall during the quake. Some of the devastated schools stood right next to others that were barely scratched. That is exactly the type of situation that Gifford warns about in China Road -- an event that exposes the corruption of local governments, the results of which are so heinous that the people refuse to be appeased by more stuff.

Through reading China Road, I also came to better understand the conflict surrounding what is called Greater Tibet, some of which is actually a part of traditional China, and now see that the situation there is not quite as black and white as I once thought.

By the time Gifford reached the end of his tale of Route 312, I felt as though I had received a solid tutorial on a country that I had once only the most rudimentary knowledge about, and I was sorry to see the end of the road. Highly recommended.

Honest and lucid work, September 7, 2007
Rob Gifford has writtent this book in a remarkably honest and lucid manner. He strikes a balance between the details he describes and the broader issues that relate to those details. He tries to look beyond the narrow focus on China's stunning economic development that many authors take. He makes abundant mention of the signs of the Chinese economic miracle that he sees on his 3000-mile journey across the country. But he has also tried to present the opinions of ordinary Chinese people ("old hundred names") as well as his own analysis of their problems, hopes, and future.

He highlights the severe problem of pollution in Chinese cities. He mentions the ubiquitous sex-trade that employs 10-20 million women. He mentions the severe shortage of marriage-age women in many areas. He mentions the problem of official corruption. And he highlights the severe political repression and colonization of Muslim Uighurs and Buddhist Tibetans by the Han Chinese.

He mentions his talk with a "family planning" doctor and learns that it is her job to go around in the villages and enforce the one-child policy. This means persuading pregnant women who already have a child to undergo abortion. Sometimes she has to abort 8-month old fetuses, sometimes kill them with lethal injection, and, if a baby still manages to be born alive, to kill it after birth.

He contrasts Hui Muslims in Gansu province with Uighur Muslims of Xinjiang. The Hui Muslims are loyal Chinese citizens, who don't like American and British policy and wars in the Muslim countries, and admire Osama bin Laden. The Uighur Muslims, by contrast, chafe under Han Chinese colonization, they like Westerners more than the Han Chinese, dislike fundamentalist Muslims like Osama bin Laden and the Taliban, and even justify the wars in Afghanistan and Iraq.

He comes across a group of Hui Muslims students cycling across the desert in Western China, trying to explore their country. He comes across Uighur youngsters who dress like their Han Chinese counterparts, even though their mothers wear burqas and headscarves. He comes across Uighur children who have been given the "opportunity" to study in Chinese schools thousands of miles away in eastern China because they excelled in school back home in Xinjiang. He comes across Uighurs who believe that dreams of independence from China are futile and so they must embrace the modernization and economic opportunity that China brings to make the best for themselves and their Uighur race.

Gifford honestly admits that he is a religious Christian who, at one point in his life, was hoping to become a missionary. He visits the graves of two long-dead Christian missionaries, stops by at a church in a remote area, and reminisces about three British Christian missionary sisters who preached on the edge of the Gobi desert about a hundred years ago. He estimates that there are at least 75 million Christians in China, clearly more than the 70 million Communist Party members.

He comes across a prostitute who took up the oldest profession not because of poverty but because she was jilted by her boyfriend. He comes across Han Chinese men who believe that it is ok for married men to have one or more mistresses if they can afford it. He comes across Han Chinese women who despise the darker skin color of ethnic minority people. He comes across a desert town where corrupt government officials have sealed off the town's only well to force town-dwellers to buy drinking water from their private company.

Interestingly he compares India with China, and after some debate, decides that the lot of the Chinese peasants is better than their Indian counterparts. He admires the awesome infrastructure development taking place in China, specially the highways, the buildings, and broadband Internet connectivity. He mentions the 450 million cellphone users, a number that is growing by 5 million every month.

Gifford is not very optimistic about democratic political change in China. But he says that this does not mean that the system will eventually collapse. He notes that with the rapid economic development, the Communist government is effectively trying to "buy off" the people. There is now a "safety valve" to the pressure cooker that Chinese peasants in the countryside live in. If their crops fail, they can always move to the cities to work on jobs where they make several times more than in the countryside. Their lot is much better than the parents' generation. The development of highways and railways means that poor peasants from even remote countryside villages can easily travel to the coastal cities to look for work. And a large middle class is developing in the cities. So, Gifford thinks that it is quite possible that the status quo may continue indefinitely, with relative peace between the people and the government, provided there are no major shocks that disrupt the economic development of China.

Gives a very interesting Western view of China, November 23, 2007
China Road
By Rob Gifford, Published 2007

Rob Gifford has written an interesting and worthwhile reading book. I read the book, from cover to cover, very carefully, so careful that at times I would re-read a passage several times making sure that I did not misinterpret his ideas and intention. Yes, his intention which I analyzed with great caution and observed the body-language of his language used throughout the book that revealed a great deal what he had in his mind that he did not want to come right out stating his thoughts that he might not even aware of.

Spent about two decades of his Youngman hood in China did help him to be familiar with the history of China but his view of China, along with her history, is always shadowed with his, I regret to say, his very colored perspective or just plain bias.

The kind of initial love for China is quite common among many Westerners after reading the books by Pearl Buck a daughter of a Presbyterian missionary family in the 1890s in the then small city Zhenjiang a short distance east of Nanjing. Rob Gifford was also deeply inspired by an English missionary James Hudson Taylor who had been in China some forty years earlier before Pearl Buck, also did his missionary work in Zhenjiang area. Taylor, at the early age of twenty-two, felt a sense of divine calling to China and devoted about 50 or so years in his work there with a style mingling with the people there refusing to be separated from the locals in more comfortable houses for the Westerners. All of these deeply touched Rob and, reading between his lines we can see that Rob went to China with similar zest to ��save�� Chinese with his Western vision, richly wrapped into Western religion, Christianity, but he was not allowed to be a missionary in China today and this is where his body-language seeps through all throughout the his book.

Rob��s mental makeup is so deeply soaked in his Christianity background that this is principally his yardstick to measure so much in contact with him in China. His frequent, often quite lengthy, analysis and criticism about Chinese tradition, culture, history, political system, wither current or historical, are all based on his personal background in England as a young man, almost about the same age as Taylor 160 years ago. But it is amusing that he gathered very little about how most of the educated Chinese are rather resentful of foreign religious missionary and this is not something existing only China today since 1949. It is important for the average Westerners to understand that not being religious, such as being a Christian, is a sign of ��backward�� but such is not the case with the much better educated Westerners and slowly more better educated Westerners realize that Chinese were very fortunate not being so culturally dominated by any religion, Muslim or Christianity such as what we see the terrible struggle between the Fundamentalists and the more Secular directed Americans in the U.S. today. With his contract with NPR, an American organization, as a correspondence, he would frequently speaks as though he were an American, or perhaps he thinks the two are really just one.

His arguments against current Chinese political system very much as an extension of the very ancient political and cultural systems are surely quite upsetting to many Chinese but I think the Chinese have nothing to lose if the arguments are taken as something to ponder over with open mind whether they agree or not.

Rob��s many encounters with the Chinese ethnic minorities almost always with some hidden with to stirrup troubles and he seems disappointed if the Chinese ethnic minority he met did not blast all the Han Chinese. But he did report that one Tibetan school teacher who teaches Chinese language to other Tibetan students and saying that the Tibetans are doing better today under the current government than staying as the traditional nomads as in the past. As one born in China and deeply concern and sympathetic to all the ethnics around the world I was uplifted by the forward looking Tibetan young teacher Rob had encountered in Gansu Province. The story Rob has told about this Tibetan teacher echo my wish for the Navajos in Arizona where I have had some wonderful contact with since the 90s and I tried hard to convince my Navajo friends to strive for the best to complete a solid education while also trying to preserve their traditional culture.

In a fleeting passage Rob briefly mentioned that Zhao Zi-Yang was attempting to initiating even before the 1989 Tian-An-Meng protest and the policy released was fully approved and supported by Deng Xiao-Ping. It is a profound regrettable event that the students in Beijing were very impatient with the progress made in political reform and the demonstration turned out to be one of the greatest political set back in modern China. Despite of the fact that Deng was the paramount leader he had to deal with the still very powerful old CCP members from the way back in their 80s or 90s and Deng still, of course, remember the two political purges and what he was put through by the wild students Red Guards during the so-called Cultural Revolution, the fear is very real for one at his age he gave in to the hardliners headed by Li Peng (����) to crash down the protest with Liberation Army. Rob is one of the few Westerners mentioned this factor but filed to provide any degree of evaluation of Deng��s role and only his endorsement of economical development.

The expressions Ocean People and the Old Hundred Name are used very frequently in the book but both terms are very important to the Chinese than to the Westerners and the loss of the Chinese flavor here is a real substantial missing elements. Rob should have explained at the beginning and use Yang Ren for Ocean People and Lao Bai Xien (�ϰ���) for the Old Hundred Name because the term is used to denote the common folks, not really the surnames much like when we say that we are the taxpayers in this country because we are so heavily taxed and barely able to get by unlike the top 1% particularly under George W. Bush government. .

Rob��s final chapter is an extensive analysis that I wish he had save for himself for perhaps another 30 years then he would be able to make some revision. But I would not be telling the truth to say that I did not enjoy reading this book. I did, and very much so.

Highly Recommend Book - China Road, August 13, 2007
China Road: A Journey into the Future of a Rising Power

I am reading some books recently (to name a few, the China Road, Collapse)...

I like Rob Gifford's book China Road very much. It is very interesting to read, and offers a great angle to analyze the real problems and hopes of China.

Let me tell you why I love this book.

The Idea

The idea behind the book is to take a journey along the China State Road No. 312 from Shanghai to north-west border of China. This idea itself is attractive.

What is road 312, or G312 (G means Guo or State)? It is a road starting from Shanghai, cross the mainland of China, and travels along many provinces like Anhui, Henan, Shaanxi, Gansu, Xinjiang... It is something like the mother road Route 66 in the United States.

It is a long road. It is 4825 km long, and the diversity in both natural and social scene is huge enough for anyone who are willing to understand more about China.

The idea is appealing to me as well. Maybe one day I should also take the trip of G312 to know China - I never claim I know China. I only know part of it, and I, myself, was often shocked by some facts I found out about China. In this sense, Rob knows China much better than I do.

The Trip

During the trip, Rob didn't just completed the trip - he explored deep inside. He visited places normal people live and normal travelers don't go. He talks with people who are saying something very familiar to me. He visited "dangerous" and "sensitive" places like Shangcai (I didn't make typo here. It is letter "c", not "h") in Henan Province, the AIDS village under the pressure of the local police... The trip was amazing, and I pleasantly followed his article to travel with him.

The Thinking

It is definitely not just a travelogue. It is a book full of his thought, not just observation. Let me just mention few of them.

In Shanghai, Rob noticed the difference of two party members. One still believe Communism is the future, while the other (I am like her) don't believe it. I laughed since it is common discussion I heard in my daily life.

Like in Xi'an, he thought about the question why China don't have its own Runnymede or Magna Carta. He thought it was rooted to the unification of the country in 221 B.C. when Qin (Chin) unified the whole country, by force. (I didn't repeat the whole story, but I think you can find out more).

After his trip, he event thought about the China's history in a while, and claiming that the country is going through circles:

China's history has only ever been about uniting and then collapsing, reuniting and then being invaded, overthrow, collapse, reuniting and collapsing again. Why should the future be any different?
-Rob, Page 276, A road is made, China Road

He then list some reasons why the future of China can be different...

My Thoughts

I appreciate Rob's thoughts, and his effort to report what China is today, and try to predict (although it is one of the hardest thing to do in the world) its future. The thought and deep sympathy are very rare in the books I read most of the time.

What about the China's future? This is a serious question. There are given answers that most people in this country can recite and even written in the constitute. However, I don't believe in. People should think about this question seriously (despite it is highly encouraged by the government that not to think about it at all).

Totally Addicting, August 12, 2007
I bought it and read 100 pages in one two-hour sitting! What I really appreciated about this book is the interweaving of China's past with its present. How can we understand the China of today if we don't fully appreciate its past? The author does a superb job of this. I can tell you that his insights and the experiences he had with Chinese citizens on his trip are completely and totally in synch with what I hear from my Chinese friends and colleagues. If you want to understand China, read this book!

Outstanding Insights Into China, June 18, 2007
Gifford spent about 20 years living and studying in China, and also speaks and reads Mandarin. "China Road" summarizes his two trips taking about 12 weeks across that nation on Route 312 - its Route 66 equivalent running about 3,000 miles from Shanghai to the border with Kazakhstan. Besides providing a physical description of the road, travelers and sights, "China Road" goes much further - summarizing the opinions of its workers, officials, travelers and other citizens, and offering well-grounded historical insights into China's history that help explain its national "psyche."

Gifford begins in Shanghai, telling us of its 13 million population, 300 miles of elevated roadway, world's fastest train (reaching 270 mph over its 20 mile course), world's tallest hotel building, and a phenomenal rate of growth. (The World Bank says China has lifted 400 million out of poverty since 1978 - greater than the entire population of South America.)

On the other hand, we also learn that the rural population has received little of these new benefits - in fact, that population is constantly presenting the central government with thousands of "mini-uprisings" - despite the fact that the ringleaders typically end up in jail for an indeterminate length of time. Complaints include overbearing taxes, officials displacing farmers from their land in favor of developers (pay higher taxes), corruption, and little or no free education and health care. Government malfeasance in one rural area also led to a major AIDs/HIV outbreak associated with contaminated blood-collections that infected both donors and recipients. And the "one-child" family is sometimes brutally enforced if a woman becomes pregnant with a third child.

We also learn that China is an amalgam of some 56 recognized ethnic groups, as well as 400+ others. Thus, its variety of cultures, languages, etc. require a strong leader - a lesson Americans should take to heart in various situations. Gifford pushes the point, wondering if China is better off without democracy - its economic growth now greatly exceeds that in India, though India did avoid the horrible mistakes of Mao and his immediate successors. (Gifford also reminds readers that Russia's experiment with democracy did not end well, nor has China succeeded with anything in that direction previously.) Regardless, one way China attempts to integrate these various groups is to offer top ethnic-group students free schooling in its traditional Eastern Chinese schools. Further, it is also clear that the Chinese government has to run as fast as it can to manage the economic and other needs of its huge and growing population.

Pollution and water shortages are growing problems for China, as well as accessing sufficient energy sources to power its needs for economic growth.

China previously has suffered greatly at the hands of the Japanese, and its efforts now to modernize, and strengthen its armed forces can reasonably be explained as an outgrowth of a "never again" sentiment. Wanting to attain respect on the world stage reinforces its military build-up. Gifford's informal "polling" also reveals China's citizens see the U.S. as a war-prone nation.

Most every Chinese town has an Internet bar. The Chinese language is made up of 214 "radicals," combined to make characters. Writing on a computer requires entering a character's transliteration in the Western alphabet, all of which have multiple characters making the same sound, and choosing a character that is most appropriate.

Summarizing, "China Road" is an excellent and thoughtful source for those seeking to better understand our growing rival.

A summary of problematic western views on China, May 21, 2009
A splendid book "China Road" has been in its early chapters. The author asks insightful and important questions and formulate well documented responses.

But as he gets into chapters 5 and later, you gradually realises that despite subtleties, almost all his underlying tones are negative, almost as if paid by some agencies to make China sound inferior despite superficial improvements. And I am almost 100% sure he's not. And herein lies the problem of western views on China. An inert sense of need to reaffirm their own superiority through a constant need to criticise other societies.

I have recently made long trips through China with a western friend and the behaviours of himself, my friend and western tourists in his book all seem to fit the same pattern. Wishing to spend no time figuring how the Chinese government can manage to increase health and educational standards so rapidly in recent decades, he would rather focus time of his trip to travel to the poorest parts of China to see its flaws. An unconscious and constant need find the victims of communism and try to help them escape their brainwash with his more ethical views.

For instance, in the section on the Tibet issue, he and the western travellers instantly change tone when travelling to ethnically non-Han parts of China. The sky is suddenly bluer, the people suddenly more spiritual and the aura of evil that surrounds coastal China suddenly disappear. They have somehow decided for the Tibetans that they would be better off in their squalor and lack of social services and infrastructure. Because these visitors are too lost in their faithless pursuit of capitalistic goals in their home countries, they come to value spiritualism and the simplicity of the lives of the cultural minorities of China but simply refuse to understand that these minorities have desires to lead better lives as well. Despite the author's previous attempts to legitimise his claims with reliable sources in the preceding chapters, he seems to have concluded without visiting Tibet that the Tibetans are better off without the communist party despite his interviewees thinking otherwise.

He has even gone to such extends of disliking optimism in the minds of the Chinese citizens that foreseeing how his interviewees might give the typical optimism that their lives are not perfect but it's a lot better than 10 years ago and it's getting better, he would refuse to see that interviewee to opt for more hateful, communist-bashing interviewees instead.

Of course, he is not doing any of that consciously. He loves and respects Chinese culture but here lies the greatest danger. He has made his mind before even embarking on his trip and his trip only serves to help him find evidence to his already formed conclusion while ignoring those that opposed his conclusions. All his actions with locals on sensitive issues has shown him completely reassured that he has the moral high ground. The issue lies not simply with the fact that he refuses to see or accept differences in values but the fact that he cannot see his own tendencies to believe his own values are superior to those of others. While it's perfectly fine that he wants to write a book criticising China (a perfectly noble goal in itself), he will never be able to do so without realising this.

Often Interesting and Funny, but Sloppy, January 30, 2008
Gifford's observations are interesting and often insightful; particularly because he has experience investigating subject matter that is officially "off-limits" and censored by the government. He hints at the suppression of many people's stories in China that deserve to be told and pursues, to varying degrees, sensitive issues (i.e. AIDS epidemic in Henan, forced abortions, etc.).

One aspect that I found annoying and shallow is that he consistently views Chinese as basically lacking a moral compass and my sense from more than one passage is that he believes this is due to their lack of a monotheistic religious tradition. My own experience in China informs me that Chinese struggle with questions of morality to the same extent that any Western or Judeo-Christian culture does. Regardless, both history and modern society confirm that moral righteousness is not synonymous with the presence of a monotheistic religion.

Rant over. The book is an easy read and very funny at times. However, concerning books on modern China, Oracle Bones by Peter Hessler is much deeper (Oracle Bones: A Journey Through Time in China (P.S.)). ... Read more

Editorial Review

An accessible guide to trading the fast-moving foreign exchange market

The foreign exchange market, or forex, was once dominated by global banks, hedge funds, and multinational corporations, but that has all changed with Internet technology and the advent of online forex brokers. Now, hundreds of thousands of traders and investors around the world can participate in this profitable field.

Written by forex expert Kathy Lien, The Little Book of Currency Trading will show you how to effectively invest and trade in today's biggest market. Page by page, she describes the multitude of opportunities possible in the forex market, from short-term price swings to long-term trends, and details practical products that can help you achieve success, such as currency-based ETFs.

• Explains the forces that drive currencies and provides strategies to profit from them
• Reveals how you can use various currencies to reduce risk and take advantage of global trends
• Examines financial vehicles that can help you make money without having to monitor the market every day

The Little Book of Currency Trading opens the world of currency trading and investing to anyone interested in entering this dynamic arena. ... Read more

Reviews

Excellent advice for all traders, December 27, 2010
I found this book to be an invaluable guide to trading the forex markets. Although short, the author manages to pack in helpful advide and strategies for both short and medium term traders. Trading the news and technical analysis are covered along with setting profit targets and stop losses. Highly recommended ... Read more

Editorial Review

Reviews

Entertaining, educational and funny, January 16, 2008
One of the principle complaints of conservatives is that all education in America is deliberately skewed with a "left-wing" bias from kindergarten to college. And yet the field where this "bias", (if you accept this view) is clearly undone is the field of economic education. Whether you read the business section of the New York Times, the Harvard Business Review or National Public Radio, the actual bias present is really for the neo-classical economic model (AKA, neo-liberal economics) of the laissez-faire variety.

Dr. Chang, a professor of economics at Cambridge and former World Bank researcher, deconstructs in general and in detail many of the prevailing myths of the neo-liberal school of economic development. My favorite chapters were these two:

Chapter 1-The Lexus and the olive tree revisited. In this chapter Dr. Chang explains why he thinks that NYT columnist and author Thomas Friedman is full of crap about the benefits of globalization for ordinary people [pages 19-40].

Chapter 3-My six-year-old son should get a job. Says Chang: "I have a six-year-old son. His name is Jin-Gyu. He lives off me, yet is quite capable of making a living. I pay for his lodging, food, education and health care. But millions of children of his age already have jobs. Daniel Defoe, in the 18th century, thought that children could earn a living from the age of four. Moreover, working might do Jin-Gyu's character a world of good. Right now he lives in an economic bubble with no sense of the value of money. He has zero appreciation of the efforts his mother and I make on his behalf, subsidizing this idle existence and cocooning him from harsh reality. He is over-protected and needs to be exposed to competition, so that he can become a more productive person. Thinking about it, the more competition he is exposed to and the sooner this done, the better it will be for his future development. It will whip him into a mentality that is ready for hard work. I should make him quit school and get a job. Perhaps I could move to a country where child labour is still tolerated, if not legal, to give him more choice in employment" [page 65].

I found this tongue-in-cheek style of criticism of global capitalism both hilarious and enlightening.

There are many more examples of Chang's knowledgeable and funny criticism of neo-liberalism I could list here, but I don't want this review to be a spoiler. So go read Chang's book.

Speaking truth to power, helpful revisionism, February 22, 2008
While other books (linked below) have focused on the evils done in our name, this is the first book I have seen that dissects economic history in order to demonstrate the hypocrisy of the current regime that bullies lesser developed countries with the IMF-WTO-World Bank interlocking conditionalities.

The author comes down solidly in favor of protectionism, foreign investment controls, state-owned enterprises, avoidance of privatization, not allowing patents to clash with the public interest, the need to defy the marketplace and respect the role of manufacturing, and the influence of culture (and changing the culture through government direction).

This is a nuanced book that trashes the neo-liberals while speaking truth to power. On any given prescrption, the author will say "it depends" and avoid leaning to one extreme over another.

He touches on democracy as not necessarily good for developement, and corruption not necessarily bad.

Other books that I respect as much as this one:
The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It
The End of Poverty: Economic Possibilities for Our Time
The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (Wharton School Publishing Paperbacks)
Confessions of an Economic Hit Man
The Shock Doctrine: The Rise of Disaster Capitalism
Manufacture of Evil: Ethics, Evolution, and the Industrial System
Open Society: Reforming Global Capitalism
The Pathology of Power - A Challenge to Human Freedom and Safety
Blessed Unrest: How the Largest Movement in the World Came into Being and Why No One Saw It Coming
The Unconquerable World: Power, Nonviolence, and the Will of the People

See also my varied lists.

Time to Update Economics, February 4, 2008
"Free Trade" has been progressively wrecking America's economy for at least two decades. Meanwhile, economists in our colleges continue, almost without exception, to warn of protectionism while extolling the writings of Adam Smith and David Ricardo - written long before today's gross wage imbalance between Asia and the U.S., instant communications, and fast, economical international transportation. Finally, a Cambridge economist, Ha Joon Chang, brings facts and common sense to the debate - aided considerably by the free-trade ignoring successes of his native country, South Korea - eg. Samsung, and Pohang Iron and Steel. (And then there's Toyota - started out in textiles, was protected by auto tariffs, and now the world's #1 auto manufacturer and teacher of advanced management techniques.)

"Bad Samaritans," as Chalmers Johnson points out, refers to "people in the rich countries who preach free markets and free trade to the poor countries in order to capture larger shares of the latter's markets and preempt the emergence of possible competitors." They are saying "do as we say, not as we did" and take advantage of others who are in trouble. He also points out that all of today's rich countries (INCLUDING the U.S.) used protection and subsidies to encourage their manufacturing industries - anathema in today's economic orthodoxy and contrary to the WTO, IMF, and World Bank. As a result, third-world nations' growth rates have fallen to less than half of that recorded in the 1960s (1.7 percent instead of 4.5 percent).

As for corruption being incompatible with high growth, Chang points to Zaire vs. Indonesia. Both suffered from murderous corruption, yet the former's living standards fell two-thirds while Indonesia's tripled. The difference was that corruption funds in Zaire fled to Swiss banks, while those in Indonesia remained in the country to help create additional jobs.

"Level playing field" rhetoric is often used to justify WTO and IMF prescriptions. Chang, however, reminds us that this is inconsistent with our practice of segregating sports by size and age, and that it is similarly unrealistic to expect eg. Honduras to compete evenly with the U.S.

Chang also points out the strong agricultural subsidies in Europe (milk), the U.S. (corn), and Japan (rice). The good news is that these subsidies keep farming viable in those areas and the nations involved more independent; the bad news is that U.S. corn is exported to Mexico - making economic survival impossible for their farmers and driving them to illegal immigration into the U.S.

Free-trade reduction of tariff revenues also plays undermines national budgets in poor countries because they lack efficient tax collection capabilities and tariffs are the easiest taxes to collect. Combined with free-trade-caused damage, the struggling nations are left far less able to fund health care and education for their citizens.

Still another Chang insight is his pointing out that pursuit of copyrights and patents are simply a sophisticated form of protectionism that again works against third-world nations by preventing their starting important new industries (eg. drug manufacture) that boost not only their economy but citizens' health as well. (97% of all patents and the vast majority of copyrights are held by rich countries - these are also a special problem for poor countries wanting textbooks. IMF also insists on enforcement mechanisms, further adding costs to poor nations.) Chang sees the U.S. as the worst offender in this area. Chang asserts that self-development of new technology is difficult in third-world nations, using North and South Korea as examples. North Korea has tried to be self-sufficient (and done poorly), while South Korea has assiduously copied wherever possible and is now an industrial powerhouse.

Chang suggests that third-world countries use tariffs to protect their developing industries. However, he does not propose that the U.S. do likewise - perhaps in his next book. Nonetheless, "Bad Samaritans" punches enough holes in free trade thinking to help others rethink America's self-destructive commitment to it.

4.5 Stars-A return to the wisdom of Adam Smith, January 23, 2008
Ha-Joon Chang(C) demonstrates that the standard neoclassical international trade theory (model) applied by the economists at the World Bank(WB),the International Monetary Fund(IMF),the Import-Export bank,the World Trade Organization(WTO),and advocated by Thomas Friedman, is basically an artificially constructed ,purely mathematical,blackboard and chalk model that generally ignores major,relevant variables and necessary political and social prerequisites,as well as the time it would take to implement these kinds of institutions.The current collapse of Kenya is precisely the type of failure that results from the gross ignorance of the economics profession of the ancient wisdom of Adam Smith.The so-called " miracle" of Kenya was a chimera from the beginning. The absence of these institutions(overlooked,ingeneral,by C) doom the application of the model from the beginning.The theory works only if certain prerequisites are in place .For example,necessary prerequisites are (1) the existence of political,corruption free legal,governmental, and political institutions that enforce contracts impartially and uphold the rule of law, and (2) the existence of an independent,impartial,corruption free judiciary that will apply the law fairly.These necessary prerequisites do not exist in China,India,Africa,Mexico,South America,and Central America.They have evolved and are functioning effectively in the First World countries of the West and Japan.These institutions are barely present in the Second and Third World.These countries can be regarded as "infant" countries.C extends the argument based on the protection of infant industries to the protection of infant countries in chapter 3.The standard free trade prescription can only apply to " grown up"(1st world)countries.
C overlooks,in general,the extremely important policy discussions carried out by Adam Smith on pp.434-439 of the Wealth of Nations that support his overall position (1776;Modern Library (Cannan)edition).Smith (a) supports retaliatory tariffs if there is any probability greater than 0 of changing the policy of the offending country;(b)supports revenue tariffs ; (c)would dismantle protectionist tariffs carefully, in very slow gradations, in order to prevent the collapse of those industries that are being opened up to imported goods,and (d) recognized that a 100% free trade policy is a pipe dream, given the social and political realities of any society.
I recomend this book.C can easily get a full 5 stars from me by explicitly connecting his analysis to the wisdom of Adam Smith.Adam Smith would fire all the economists at the WB ,WTO,and IMF for gross incompetence and negligence.

Why do some countries still fail to industrialize?, February 13, 2009
Elsewhere on this site, on a discussion about a book on immigration across the Mexican-American border, someone said: "If you feel we owe Mexicans so much, why don't you go down there and try to help them build their own country up from third-world status?" Here was my reply...

This is a very legitimate question. I will take a stab at answering it.

The reason that third world countries have not developed in the last 50+ years is largely because of the anti-protectionist (free trade) requirements that Western countries have, pretty much without exception, always added as a condition of their aid and so-called "development" loan money.

An undeveloped country's industrial sector can't compete with the established industries of the first world. Yet through free trade, they have no choice but to try. For example: a new Indonesian carmaker can no more compete with Toyota, Ford or BMW for the global auto market, than a little corner convenience store could hope to compete with Wal-Mart.

If third world countries would be protectionist, they might have a chance. To continue with the same example, Indonesia could close itself to auto imports so that Indonesians all bought ONLY Indonesian-made cars. Eventually, one or two Indonesian carmakers would come to dominate the domestic market. By this time, these carmakers would be providing cars for tens of millions of Indonesians--meaning that they would now be big enough (your size is directly proportional to how much risk you can absorb) and experienced enough to at least have a *fighting chance* on the global auto market. So at this point, Indonesia would be able to open up the auto market to free trade, allowing foreign companies to sell in Indonesia in exchange for them allowing Indonesia's company to sell in their country. The Indonesian car company would sink or swim, but at least it would have been given a realistic chance.

However, protectionism isn't usually considered an option. The West forces unrestricted free trade on everyone else. It does this, for instance, by making anti-protectionist rules a contingency of loan and aid agreements. Thus, if you are a third world country, the West will agree to give you the startup capital necessary to try developing your own industries, in the form of a loan; but simultaneously, the West will ensure that you never succeed in this venture by refusing to let you GROW your industries via protectionism. So most of the money ends up simply being consumed (including in the form of graft, but this is neither here nor there, really) instead of being turned into productive wealth, i.e. national capital.

This is really all that "globalization" is: ever-expanding, unrestricted free trade. The result of it all is that, in the global production scheme, the West provides the capital and the rest of the world provides the dirt cheap labor. They can't develop their own capital.

Ha-Joon Chang has written several couple books that elaborate this argument: Bad Samaritans and Kicking Away the Ladder. He not only outlines the argument, but supports it solidly with examples proving that the "chosen few" countries which the West has wanted to allow to develop (like Japan, South Korea) have done so, while the majority of the world, busy scraping for ironically-named "development" loans, have not. Here is a short development of the argument by Chang himself:

[...]

Development is really not rocket science. There are enough examples in the world, by now, of countries that have done it. And they have all followed roughly the same path: strong protectionism of their industrial sector in its early years (with optional free trade policies for agriculture). The reason so many countries which are simply *overflowing* with raw materials and human labor have still not experienced explosive industrial development is that Western governments and financial institutions have carried out a more-or-less concerted effort to prevent them from becoming new competitors. If we are interesting in developing the third world, we don't really have to do anything, we just just have to STOP forcing free trade on them through agreements signed by silly men in Western-style business suits who pretend to represent them.

You were correct in suggesting that development is the only real long-term solution; anything related to open borders or immigration is merely a short-term fix for the present poverty of 4/5ths of the world. The U.S. and Europe can accept a lot of people, but not the whole world. Nor should people have to uproot themselves from their homeland to enjoy a decent standard of living.

I'll just leave you with a statistic:

"For every $1 in aid a developing country receives, over $25 is spent on debt repayment.

Based on World Bank data (accessed March 3, 2008) as follows:
* Total debts of the developing world in 2006: $2.7 trillion
* Total official development assistance in 2006: $106 billion"

You may say, "but that's accumulated debt versus assistance provided in just one year". Yet that's exactly the point. The debt should not be accumulating if the "development" loans were really working as they were supposedly intended to, as seed money.

-----

If you need any more reasons to buy this book, here's one: Chang is an actual, Cambridge-trained PhD, and one of the world's most highly regarded development economists--not simply a loud-mouthed journalist, like Thomas Friedman.

a vital new look at an old history, October 6, 2009
Do not simply cast this book aside as a piece of economic nonsense from the left. Admittedly, the title may not welcome a broad economic audience, however, after the first chapter Chang will have any reader thinking, at the very least, 'you know, that's a damn good point.' By using the most powerful weapon to backup his claims- history- a thought-provoking and necessary criticism of current orthodox, neo-liberal economics is made.

Orthodox assumptions on FDI regulation, currency manipulation, the principal-agent problem, corruption, public enterprise, and, of course, free trade, are challenged and scrutinized. The next time someone says, "all a country needs to do to develop is just open their markets," please include this book in your list of suggested readings that say..."actually, i think it's a bit more complicated."

Realism, not ideology, at last!, March 21, 2008
There are just waaay too many books on economics that precede from faulty premises, with impeccable logic, to faulty conclusions. Many even go into extensive math to "prove" their conclusions, as if the emotional actions of individuals can be simulated by a computer program that assumes all actors always behave in their own rational self-interest.

I'm glad to say that Prof Chang relies here on history, on what has actually happened, rather than on the wishful thinking of free market economists who, having taken David Ricardo on faith, never seem to understand why things don't work out the way they expect. (Though, finally, World Bank economists have begun admitting they haven't actually helped any of the countries they intended to be helped.)

This book is a great antidote for all those, including the economic advisors of at least the last 4 presidents, who associate protectionism with the Great Depression, overlooking the fact that the US has *always* had tariffs and always been protective of its industries that needed protecting (and a number that didn't).

Prof Chang makes in interesting analogy: that asking countries who have just begun creating a product to compete on an equal basis with countries who have decades of experience in that field is like asking children to compete with adults. What these countries need is not a level playing field, but a helping hand. (Much as the Marshall Plan did for Europe after WWII.)

I won't further repeat what's been said in other reviews here, other than to offer the opinion that this is one of the most readable books on economic policy you're likely to find, with a lot of historical research and some excellent insights. Not a perfect book -- I think Prof Chang could have included some data that didn't always make his point, lol -- in this world, nothing is ever perfect -- but it's a must-read for anyone interested in the debate on whether or not globalization should be monitored and regulated.

Free Trade and Economic Development, March 25, 2008
Neoliberal economics, also known as the Washington Consensus, maintains that a developing country's surest path to economic development requires that it have low or no tariffs, private rather than public ownership of the means of production, balanced budgets, and an openness to foreign investment. Once these policies are put in place the market simply does its work in the efficient distribution of goods and the creation of wealth. These policies are advocated by the IMF, World Bank, WTO, and the wealthy countries that control them. Now Cambridge economist Ha-Joon Chang tells us that not only are these policies unfair, they will hinder the long-term economic development of those countries.

According to Chang, one of neoliberalism's most famous advocates Thomas Friedman got it wrong in his book The Lexus and the Olive Tree. The superefficient factories of Toyota did not arise from neoliberal policies. Ford and GM were evicted from Japan in 1939, and after World War II Toyota received subsidies and protection for about 30 years. The initial launch of Toyota in the US in 1958 was a failure. Chang's point is that some of the most successful companies and countries of the 20th century did not develop according to free-market principles; successful countries protected and nurtured their industries.

Looking back even further, Britain and the US did the same in the 19th and early 20th century. The US was heavily protectionist until the beginning of World War I. The secret history of capitalism is that wealthy countries today are asking developing countries to adopt policies that they themselves never would have accepted.

Chang points out that the growth rates of most developing countries were lower during the neoliberal period (1980-today) than they were during the government interventionist years of the 1960's and 70's. The greatest success story of the neoliberal period was China, which was very cautious and measured in opening its economy to foreign competition. The fact that a communist government can guide a capitalist economy to 10% annual growth rates for more than two decades appears to support Chang's thesis. The system Chang praises seems to work well in East Asia were populations are highly skilled, educated, and organized, and were relatively uncorrupt governments let business take care of business - Japan, Taiwan, and Chang's South Korea are good examples. However, these conditions were not present in Latin America, were there has been a backlash against neoliberalism.

Those who believe in the myth of free trade are either fools or hucksters. But that is not to say that most of the world's countries believe in capitalist economics since it is the most efficient way to distribute goods and create wealth. Capitalism, however, is not necessarily just, therefore the market has to be managed and regulated. The freeness of a market is only a question of degree. (Read William J. Baumol's Good Capitalism, Bad Capitalism, and the Economics of Growth and Prosperity for more on this topic.) Free trade is a myth. Trade is almost always managed, and for those who believe it is free will find that they have mismanaged it. Witness the US's $700 billion annual trade deficits; only a free-trader will tell that these kinds of deficits are natural and harmless.

Chang believes that "free markets are not good at promoting economic development." This was certainly the case for Chang' native South Korea in the years following the war. South Korea became an economic powerhouse by nurturing certain industries. He advocates a certain kind of protectionism and industrial policy that requires good governance and an educated workforce. Without the latter two, protectionism won't work, it will only further impoverish.

Chang's message goes against the current orthodoxy and will probably not be taken seriously by most of the industrial world's governments and NGO's. However, in light of recent events, when the titans of Wall Street are asking the government for bailouts rather than lower taxes and fewer regulations, it is a timely reminder that untrammelled free trade does not only not solve all of our problems, it can create some as well. This book is an excellent contribution to this discussion.

Preaching to the wrong audience, February 12, 2008
Ha-Joon Chang categorizes Bad Samaritans as:

1. Opportunists: Those who advocate implementation of destructive policies in poor countries as a condition of bailing them out of financial trouble, with the intent to exploit and prevent them from becoming future competitors.

2. The ideologues: This group is genuinely convinced neo liberal economic policies are necessary to promote economic wealth. They are more difficult to contend with, as "self righteousness is often more stubborn than self interest."

3. Conformists: Neither opportunist, nor ideologue, conformists are just too lazy to challenge the conventional held beliefs that contribute to the economic failure of poor countries. The author's hope is to convince this group in particular, which in his opinion comprises a majority of Bad Samaritans to combat the status quo of neo liberal ideas.

The author's intent is to dissuade Bad Samaritans from advocating and imposing destructive policies towards poor countries through the IMF and the World Bank. These destructive policies are borne out of neo liberal ideas for building and maintaining successful economies, including low inflation, small government, private enterprise, free trade, friendliness towards foreign investment etc. Mr. Chang accuses rich countries of hypocrisy, as most of them practiced virtually everything they now preach against to aid them in their colossal success. This "do as I say, not as I did" attitude has been primarily responsible for the decline of the 3rd world.

While Chang agrees that the co-existence of state protectionism with economic development may not prove cause and effect, he puts the bourdon of proof on free market economists to explain how free trade has helped rich countries get rich when history clearly shows otherwise. Chang uses numerous examples of the checkered pasts of economic titans of today, e.g. the United States, England, South Korea, and to what extent they manipulated markets to their advantage with high tariffs, government interventionism and protectionism, ignorance of intellectual property rights etc. to attain their supreme status. And once on top they kicked the success ladder away, and instead, imposed ill conceived policies on poor countries suitable only for strong, mature economies.

Mr. Chang advocates a level playing field; a playing field where poor countries should be allowed to impose high tariffs, ignore intellectual property rights, control foreign investment, implement state owned enterprises, utilize government protection and subsidies etc. to nurture their "infant industries" until they can stand on their own and not be crushed by established global competitors. Therein lies the author's biggest fallacy: To what degree should poor countries be allowed to engage in unfair practices, and who decides when it is time to scale down? Rich countries of today have committed many atrocious acts unrelated to economics that aided their ascent to the top, e.g. pillaging and taking land by force (colonialism). Should poor countries follow in these footsteps too?

What could possibly compel rich countries to contribute to the creation of another South Korea?

Chang does a magnificent job of exposing neo liberal economic ideas as failures, but he preaches to the wrong audience. His critique was scathing, and no one halfway contributing or approving of the prevailing policies towards poor countries is spared his sword. He hopes to change the world by enlightening influential groups he readily trashes. This sounds a bit counterintuitive.

The captive audience here is not the conformists of neo liberal economic ideas as Chang hopes. Instead, poor countries would greatly benefit from studying Chang's ideas of long term economic development. While it is difficult to adopt his ideas of leveling the playing field when they depend on the IMF and World Bank for funding, they should strive to adopt as many of Chang's ideas as possible to minimize the risks of failure.

Bad Samaritans, October 25, 2009
An accessible and compelling analysis of the effects of globalism and "free" trade.

I was disappointed that the book does not go beyond the effect of trade policy on rich and poor countries. In the US, a "rich" country, millions are displaced by the globalist policies of outsourcing and worker visas, as well as the loss of manufacturing. This makes the country rich only in the sense that if Bill Gates visits a bar, that bar will temporarily have the wealthiest clientele in the world.

That's perfectly acceptable for a book which takes a more global perspective, but just know what you're buying.
... Read more

Editorial Review

The dollar is in trouble. Its value on foreign exchange markets has been falling for the past six years, and now its gradual decline is about to become a rout. This spells big trouble for the American economy—but potential riches for smart investors. In The Collapse of the Dollar and How to Profit from It, financial gurus James Turk and John Rubino show how the dollar arrived at this precipice, why it will continue to plunge, and how you can profit from the resulting financial crisis.

The United States today is the world’s biggest debtor nation. To finance this mountain of debt, we’re flooding the world with dollars. The resulting oversupply of dollars will cause its value to decline until it is displaced as the world’s dominant currency. Precious metals will soar in value, and gold will reclaim its monetary role at the center of the global financial system.

James Turk, a leading gold authority and the founder of GoldMoney.com, and John Rubino, editor of the popular Web site DollarCollapse.com offer strategies for investing in gold coins, gold stocks, gold-based digital currencies, and other hard assets to create a profitable portfolio.

The Collapse of the Dollar and How to Profit from It is a must read for every citizen and investor. ... Read more

Reviews

Timely Advice for Our Fiat Currency, March 26, 2006
I just finished reading The Coming Collapse of the Dollar and How to Profit From It By James Turk & John Rubino published in 2004. James Turk is founder of GoldMoney.com, the leading digital gold currency payment system. John Rubino is the author of How to Profit from the Real Estate Bust.

I've posted a lot about inflation and gold, the Federal Reserve, and the destruction of the US Dollar. I have read about the inflation that Germany experienced after WWII, the devaluation of the Mexican Peso and the Argentine Peso. If that is our future, I wanted to have some idea of what is in store for us and. The book is divided into four parts and is well written and difficult concepts are explained well:

Part One - Why the dollar will collapse
Part Two - Money Then and Now
Part Three - Wht Gold Will Soar
Part Four - Profiting From The Dollar's Collapse

In part one we learn that we have a fiat currency, backed by nothing except a decree that the US Dollar is legal tender. Throughout history, in order for governments to satisfy demands without raising taxes, a government not only begins to debase its money, but inflates as well. Both are happening in the US and no government has been successful. We have a history of that in this country with the Continentals and the Confederate currency, both worthless.

Another fact that dooms our currency is that we have too much debt. Total unfunded liabilities of the US are in excess of $43 Trillion, as a society we owe another $37 Trillion and Derivatives are in excess of $200 Trillion.

Then we have a trade imbalance which just topped $800 Billion for 2005. We have been up in arms lately by the Chinese wanting to buy Unocal, then Dubai wanting to own our eastern port management companies and Dubai wanting to own some of our critical defense industry by trying to buy Doncasters Turk and Rubino point out on p31:

Foreign investors now own about $8 trillion of U.S. financial assets, including 13 percent of all U.S. stocks, 24 percent of corporate bonds, 43 percent of Treasury bonds, and 14 percent of government agency debt. By the end of 2003, about a third of Fannie Mae's mortgage-backed bonds were being sold outside of the U.S.

That was in 2003 and it has gotten considerably worse. What's in store for us:

Over time, the gap between tax revenue and the demands placed on government tends to grow, and spending, borrowing, and currency creation begin to expand at increasing rates. Inflation accelerates, and the populace comes to see the process of "debasement" for what it is: the destruction of their savings. They abandon the currency en masse, spending it or converting it to more stable forms of money as fast as possible. The currency's value plunges (another way of saying prices soar), wiping out the accumulated savings of a whole generation. Such is the fate of every fiat currency.

The government wants to keep this game going as long as possible by issuing phony CPI numbers, then by excluding energy and food, concentrating on a "core" rate. Phoney low inflation numbers keep bond yields down and "COLA" adjustments low. What is the housing bubble, but selling USDs for a tangible asset. Gold is a warning sign and a rising gold exchange rate is fought by capping and leasing gold, until the central banks are short 12,000 to 16,000 tons. And now one of the tools Turk and Rubino use, The Fear Index, to gauge where gold is going in the next few years will be handicapped by the ending of release of M3 data.

Turk and Rubino do an excellent job of instructing you in Part Four. Can you profit from your knowledge of an impending collapse of the dollar? How can you protect yourself? How can you protect your accumulated savings?

I highly recommend this book to professional and novice, alike.

More than a little extreme ......., February 24, 2005
The authors do a good job of explaining how to invest in gold and how to put a portfolio together (from coins to mining stock).
Following the advice and investing all your funds into gold and a limited number of stocks could be self destructive though.

However, as the authors point out, the Government has confiscated gold before - and could again. If things get as bad as they suggest Governments could nationalize mines ........

If the authors are on target with their predictions, investing now in an assault rifle, a cabin in the woods and alot of tinned food would make a better investment than gold.

Gold could very well make a great investment given a sliding dollar; the argument that the dollar will collapse completely is taken to an absolute extreme (the Dollar Crisis, Causes Consequence Cures, covers the same ground more convincingly).

Useful book - worth considering as part of your personal investment strategy. However, I wouldn't plan my portfolio around the authors advice alone - having too great a dependance on any one asset class can be bad. Advice on how to invest in gold (practicalities)is very good though.

Good Advice...If Things Go Their Way, February 27, 2005
The authors are convinced that the dollar will collapse, but their book is far from convincing. Even if the dollar does collapse, it might not do so for years or even decades. They offer up historical and theoretical reasons why the dollar should collapse, and they sound persuasive, but they never show exactly WHY the dollar MUST collapse.

That said, if the dollar does collapse, then following their advice should prove fruitful. They present a number of different ways for both relatively conservative and aggressive investors to profit. But, embarrasingly, one of the contra-dollar mutual funds they recommend (PIMCO Foreign Bond) is actually a dollar-hedged bond fund, meaning it's not designed to benefit from a dollar decline. I guess they didn't bother to read the prospectus.

Their model portfolios would have even "conservative" investors basically place all their bets on a falling dollar. This is arrogant and irresponsible. Unless you're a speculator who can afford to lose big, you need some diversification (cash, short- term U.S. bonds, dividend stocks, etc.) so that a dollar rally won't lead to huge losses. I'm about 1/3 gold/contra-dollar, 1/3 cash/short-term bonds, and 1/3 dividend stocks. (I am avoiding long-term bonds completely until we see at least 7% yields to compensate for the risk.) When I become bearish on stocks, which I expect to do by 2006, then I may go up to 49% contra-dollar and 51% cash, but I'd never bet more than half my dough on a single investment strategy and no responsible advisor would suggest that you do.

Strangely, the publisher touts praise of the book from ultra-bear Robert Prechter, whose predictions have been pretty lousy of late. Prechter is a deflationist who has been a long-term bear on gold for quite some time. Did Prechter bother to read this gold bug tome before he lavished praise on it?

Gold is money, yes, and everyone should have some. But that doesn't mean "money" is or will be the most profitable asset to hold. We just don't know. If this book can convince some of those people who have been taught by Wall Street and CNBC that all they need is S&P 500 index funds -- and maybe some bonds -- to diversify into hard assets like gold, it will serve a useful prupose. If it turns sane people into raging gold bugs who mortgage their house to stockpile gold coins and go on margin to buy shares in mining companies (something the authors actually suggest since they're so sure gold is going up), then this book is just another vehicle for creating more gold bug losers who get caught up in a mania and ride it down to the inevitable crash (the irrationally euphoric gold bugs of the late 70s are STILL trying to recoup their losses).

Reality catches up, April 19, 2005
The world is today awash with liquidity. Thanks to the extravagant living backed by paper currency, America is today the world's largest debtor nation. Though debt by itself is not bad, it is dangerous both to the borrower and the lender if it is not backed by productive assets. This book is about the origin and consequences of such a situation and the currency that has helped inflate the global monetary bubble on a scale that is threatening to burst on our faces.

First the book gives a good definition of money as a standard of value, store of value and a medium of exchange. Going by this definition, over the centuries mankind has experimented with several monetary equivalents including cattle, sea shells, metals and the like. Whatever the medium, there was a definite asset equivalent attempted to be stored in money. This system got refined over the years and ultimately gold emerged as the undisputed monetary standard in the nineteenth century. Under this system, governments and central banks had to maintain gold equivalent in their vaults for the paper currency issued by them. Excessive government spending was thus effectively curtailed and exchange rates were automatically balanced. It is the gradual deviation and debasement and later the outright abandonment of this system in 1971 that seems to have led to today's situation where the dollar has just over 1% of its value as gold reserves with the Fed.

In an imminent possibility of a virtual run on the dollar by creditor nations and oil exporting countries, the dollar is bound to plunge. Gold expressed in dollar equivalent will surge. This logic does not need any further explanation. But what is more interesting is the discussion on alternate investment strategies that can outperform gold in real terms. Silver emerges as a surprising and sure alternative. Unlike gold, silver gets consumed in large quantities in industrial use and not reclaimed. Hence the quantity of silver available above the ground is actually reducing. When there is a rush to convert paper currency into precious metals, the authors expect silver to rise faster than gold due to these fundamentals. If gold is a Boeing 747, silver will be an F-16 is a good analogy.

The book discusses some facts on mining of gold and different categories of companies involved in this industry. Depending on factors like asset base, quality of mines, financial and operational leverage, quality of management and country risk, each of these are analyzed for their risks and potential returns.

Numismatics also gets a fair share of the coverage.

The book is however bound to come under severe criticism on the following grounds.

- Gold is not the only possible store of value
- The fundamental principles on which monetary expansion kick starts economic expansion is completely ignored
- In a global economy where currencies are tightly linked and freely traded, only the dollar is isolated for criticism
- Unbridled monetary expansion is bad, but return to gold standard is ridiculous in a modern knowledge based economy
- Large transaction and holding costs in buying gold is not the efficient way to deal with investments.

Despite these shortcomings, gold will continue to retain its excellent qualities and reading this book will only add glitter to this noble metal whenever you see it.

timely and thought provoking, March 29, 2005
I like the book. Bottom line for me is that trouble is coming and we all need to be prepared. Recently, on the 5 year anniversary of Nasdaq's high , I was reading in our local paper about the dramatic downturn and thinking about the many people I know who are in the tech industry and lost much of the value of their 401K's not to mention their jobs and are still desperately today looking for work. Many of these guys have taken huge paycuts just to keep working. WE are still feeling the effects of that bubble. The weird thing is that I also recall briefly reading a review of John Rubino's book about the tech bubble before the burst and feeling that he was probably wrong.

I think its wise to consider their advice as there are many things to take from this book that will help provoke thinking ( and then compare to the daily news). Inflation is rising, people are strapped for cash, with huge credit card debt, plus their mortgage rates are rising. I personally know people here in the Bay Area who have put no money down on a half million dollar 2 bedroom condomiums and are barely making ends meet now. If there is an accompanying recession, it will be doubly painful as most have no savings or fall back plan. For me, it is a chance to take a good look at what I am doing with my money and my investing so I appreciate the research they have done.

I do not consider myself an investment guru or pretend to be, just trying to look out for myself when I sense things are terribly wrong.

I recommend this book !

The First Practical Guide To Investing In Precious Metals, January 13, 2005
The title and subtitle of this book really should be swapped. However, the choice is understandable - gold has a stigma unmatched by any other investment. Gold has been a money pit for longer than most people can remember. If you want a definition of a bear market, look at the price of gold over the last 25 years. As such, there has not been one single good book on investing in gold. Until now.

The book is in two parts. The first part makes the case for a weaker US dollar. Although Mr. Turk and Mr. Rubino hit all the important points, it is far from thorough. Those who do not know that the US dollar has been declining for four years will be in for quite a shock in these chapters as this information has been glossed over by every major financial publication in the US. Those who do know and understand why will want to skip forward or read Richard Duncan's "The Dollar Crisis" which is much more thorough but also much more dry.

The natural hedge against a declining US dollar is gold. This leads to the second part which is far more valuable. They thoroughly discuss all possible ways to invest in gold and its cousins. This is not a theoretical treatise. For example, the authors describe how to buy gold and even name places where you can go to buy gold. They cover gold stocks, both big and small, naming specific companies. They even cover a new breed of options for gold stocks. Model portfolios are provided. Websites for gold related news are cited. Gold related newsletters are listed. No other book that I know of provides this type of specificity and thoroughness.

Controversially, Mr. Turk and Mr. Rubino see no problem in putting 100% of your assets in gold and gold related investments. In fact, they make the argument that anything other than gold is imprudent. It should be noted that even those who agree with their premise will dispute this assertion. But as I mentioned, the subtitle of the book is the more appropriate title - this is a book about gold, plain and simple. One may not agree with the authors' narrow recommendation, but this book still provides an excellent guide to the portion of your assets that you do choose to invest in gold.

This is a timely and unique book.

Some acceptable basic information and very poor advice, February 20, 2005
This book has some good introductory information, and is probably of some use to anyone considering gold or silver as an investment.

With that in mind, these guys are gold bugs, or hucksters putting the hard sell on for gold. Period. Their portfolio "diversification" strategies are basically between holding actual gold and mining stocks. I mean...thats it! NOTHING else. That is just plain loopy, and frankly irresponsible to recommend. We are to conclude that NO other commodity would be worthy of investment? We are to conclude the entire world will only want to hold gold, and no other asset? Yes, in an absolute financial melt-down, gold and silver would offer some big benefits, but folks owning other basic materials would not do so badly either. Maybe better. That bears discussion, but gets very little.

They are either lazy in their writing, or are deliberately overlooking certain facts in conveying their advice. For instance, in their chapter on direct investment in gold, they make it sound like holding physical gold basically has no advantages to investing in digital gold. I found that curious, since there are obvously some advantages to holding the actual gold, versus the representational forms. Then, later in the book, they finally fessed up and said that James Turk is one of the main backers of "digital gold". After putting a figleaf on how it is a conflict to recommend this means of owning gold, they devote a whole chapter to how this will be the NEW currency, and the only way to hold "cash."

Their advice is poorly considered in at least a few places, so it makes me wonder how much thought they put into anything else. Their discussion of aggressive strategies very briefly discusses buying mining stocks on margin. They show the gross profits from margin trading, but do not even mention the cost of borrowing the funds to do so. Yet, in other chapters they rant about how its VERY dangerous to have variable rate loans, since these rates will go through the roof! So guys, wouldn't it be worth understanding how a soaring rate scenario would affect your margin holdings? Nah! Just throw out a few numbers and move on to the digital gold thing.

I have just read "Hot Commodities" by Jim Rogers, and it is a clearly superior book. No obvious hype, a lot more facts and logical thinking. By the way, he makes a pretty good argument why gold is likely not such a good investment compared to other commodities. Now...he too is selling his RICI index of commodities, so he is not fully objective. But at least he makes a reasonable attempt at proving out his thesis.

As for some of the above reviews, they smell a lot like shills. They are so over the top in praise of this mediocre book, I would discount them considerably.

Good Background Info...Wrongheaded Portfolio Advice, March 24, 2005
It is the authors' contention that gold will rise to a thousand dollars an ounce. Properly viewed gold's value as a medium of exchange for essential commodities will not actually rise. It will likely still buy the same amount of food or oil absent transient shifts in supply and demand that it has for decades. It will hold its value because gold is money. It will be the U.S. greenback that will lose its purchasing power because it is a money "substitute" a fiat currency subject to government mishandling (viz. inflation).

History provides ample evidence of governments expanding and diluting their money supply to satisfy their various constituencies. Expensive social programs buy stability and growth. At the same time printing more currency to fund these programs avoids having to tax society with the bill. But the question a reader must ask is whether the authors have made a persuasive case for this happening in the immediate future. Investors believing the latter might follow this book's recommendation to build a portfolio consisting mostly of gold and precious metal assets and their mining company stocks. The decline of the dollar and our mushrooming trade deficit's impact on the dollar is a cause of legitimate concern. Richard Duncan's THE DOLLAR CRISIS [2003]covers this topic in forceful detail. But while post World War I Germany defined hyperinflation in just a few years Rome lasted for centuries before its economy imploded. Does the investor divert their resources to build a shelter today gambling that the dollar's end is near, or is it better to continue to address the multiple risks of today by diversifying and gradually weighting their recommendations as evidence mounts.

Proponents of gold have always had a survivalist gene in their thinking. It is helpful to their case to remind us skeptics that in 1933 FDR prohibited the "hoarding" of gold and a year later devalued our currency relative to it by almost seventy percent! But opening foreign bank accounts as the authors suggest has legal and logistical impediments and ignoring currently beneficial investment opportunities outside their metallic frame of reference may be like building a shelter for that inevitably approaching but ultimately uncertain asteroid.

The value of this book is not in adopting its too aggressive and too narrowly focussed portfolio recommendations. Readers will profit by recognizing the value of including precious metals in their holdings, and even more so if they decide to diversify their portfolio to include commodities and natural resource assets in addition to stocks, bonds, and real estate. If you should subscribe to the authors' thesis exchange traded funds (ETFs) that track underlying gold indices may be an efficient and more prudent way of adjusting an investor's allocation than storing gold and evaluating individual mining stocks.

Compelling case made for return to 1970s, September 1, 2006
Turk and Rubino make a very convincing case for a repeat of the 1970s bull market in gold and silver based on the debasement of the US dollar - in what is becoming a mad sprint to win the competitive devaluation war. The deflationary effects of cheap manufactured goods from Asia over the last decade or so, especially China, have lulled people into a false sense of security - but that may well be about to change. China is proving now to be a double edged sword as it's energy demands now start to change dramatically. The revaluation of the Chinese Yuan - under pressure from the US - may also start to create increasingly inflationary pressures.

But will the masses rumble this cocktail of government deception in hiding the true extent of inflation and money hardly worth the paper it's printed on before it's too late? Probably not, because of the sad fact that economics is not "cool". A great pity because a financial crisis does now seem assured - and not that far off.

The book makes clear that people can very easily protect themselves through the early purchase of hard assets like precious metals. However, the authors also advocate buying shares of relevant mining companies but I believe this could be a very rocky road to salvation - at least in the initial panic as they are a paper asset. Moreover, such companies are now experiencing steadily rising costs associated with more expensive energy - a pity the theory of Peak Oil, which was not on most people's investment radar when the book was written is not dealt with in depth as it could only add greatly to the case. Back in the 1970s many share prices were forced down into single digit p/e ratios as a result of high interest rates!

Though a pity this book was not written a year or two later as it would have made the case doubly compelling, the authors make a superb case for the purchase of physical precious metals and unlike so many works covering this type of subject, the book is so very readable. A "must read" for those wishing to protect themselves against the coming debacle - but how many will do so - or take action?

Should Be Read by All Investors, September 21, 2005
This remarkable book should be read by everyone who has a savings account or a 401K. Even if you don't act on the authors' recommendations, you will see what is REALLY taking place in today's financial markets. I can guarantee that you won't hear any of this on CNBC.

Be warned: the authors are doing something very rare. They're telling the truth.
... Read more

Editorial Review

In his stunning memoir, Confessions of an Economic Hit Man, John Perkins detailed his former role as an "economic hit man" in the international corporate skulduggery of a de facto American Empire. Now Perkins zeroes in on hot spots around the world, drawing on interviews to examine the current geopolitical crisis, and providing a compassionate plan to reimagine our world. ... Read more

Reviews

Valuable Perspectives, Though Weak on Details, June 19, 2007
"The Secret History's" Prologue provides an outstanding summary of the dark side of American generosity as exemplified by the World Bank's actions. The U.S. holds veto power over major World Bank decisions, and its president is appointed by the U.S. president. Perkins asserts that the World Bank's mission quickly became synonymous with proving the capitalist system superior to communism, and to further this role, its employees cultivated cozy relationships with multi-national corporations. This opened the door for economic hit men (EHM) to channel funds from the Bank into schemes appearing to serve the poor while primarily benefiting a few wealthy people.

In the most common scheme, staffers would identify a developing country possessing resources our corporations desired (eg. oil), arrange a huge loan for it, and then direct most of the money to our own corporations and a few collaborators. Infrastructure projects (eg. power plants, airports, industrial parks) would then spring up - however, they seldom helped the poor, and the nation was unable to be able to repay the loan about 50-60% of the time. The EHM could then demand eg. cheap oil, U.N. votes on key issues, and/or troops for eg. Iraq.

Perkins substantiates his "American Empire" label by asserting that the U.S. is run by a big group who collectively act much like a king. They run our largest corporations, and through them, our government. They cycle through the "revolving door" back and forth between businesses and government, fund political campaigns and the media - resulting in a great deal of control over elected officials and the information we receive, regardless of who is elected.

National disasters, like wars and aid projects, are highly profitable for big businesses. A great deal of money for rebuilding is earmarked for U.S. engineering firms and large corporations owning hotel, communications and transportation networks, banks, insurance companies, etc. Sometimes they also provide an opportunity for local governments to extend their oppression - eg. just prior to the 12/26/04 tsunami the Indonesian government was ready to reach an agreement with Aceh rebels largely favorable to them - however, after the disaster disorganized and weakened the Aceh, it instead sent in additional forces to break their resistance in the resource-rich (multinational target)Aceh sector.

Overseas bribery is usually accomplished without violating U.S. law by leasing eg. equipment from companies owned by the target (and friends) at excessive rates; they can then subcontract portions to others at inflated prices. This model can be used to contract for food, housing, cars, fuel, etc. Another means is to offer to arrange for the target's children to attend prestigious U.S. colleges while covering all their expenses and paying consultant/intern salaries while they are in the U.S. U.S. companies also pay local militias for protection, thus weakening local control over them.

Little specific proof of the preceding is offered - however, it follows Perkins' earlier "Confessions of an Economic Hit Man" and numerous other sources. "The Secret History" then goes on to reference vague specifics in Asia, Africa, and South America in a conspiracy-mongering manner.

Some useful specifics come through, however. Examples include privatizing water in South America and then significantly raising rates to the point of provoking a mini-revolt, engendering political change in another country through energy-extraction agreements that provide little for the resident nation, etc.

Our "bottom-line" seems to be "go along with us or we'll foment revolution and/or assassinate you." Mid-East examples include Iran (early 1950s), and Iraq (early 1960s). (No wonder leaders are leery of American-style democracy.) Those wondering why the U.S. is so concerned about Israel's welfare have the answer provided by Perkins - Israel is America's foot soldier in the area, there to help keep the Mid-East in line.

Where have we ended up? Over half the world lives on less than $2/day, over 2 billion lack basic amenities such electricity, clean water, sanitation, land titles, phones, police and fire protection, the cost of servicing Third World debt exceeds their spending on health and education and is about twice what they receive in foreign aid, developing countries' 1970 trade surplus is now an $11 billion deficit, and U.S. corporations now pay less than 10% of federal taxes - down from 21% in as recently as '01 and over 50% during WWII.

Finally, Perkins is at his weakest in prescribing where we go from here. He senses environmentalism may offer the crisis for reform, and suggests that we all become less greedy.

Bottom Line: Despite the general weakness and generally conspiratorial tone of the book, I still found "The Secret History" to offer compelling perspectives in enough areas to be highly worthwhi

A View from the Seedy Underbelly, July 2, 2007
As a fifty-five year old man, my own history runs from a youthful idealism born in the frenetic 60's to a current disillusionment derived in part from a Supreme Court coup, a piecemeal destruction of the Constitution and a criminal Executive Branch that creates its own laws and ignores legislated ones.

When I read "Confessions of an Economic Hitman" a year ago, the questions we all have about how the world got to this point in history suddenly became much clearer.

From a first-person perspective, Perkins exposed the seedy underbelly of the economic giant called the United States.

As Americans we've gotten used to angry epithets being thrown at us from around the world; by "dirty commies", by "tinhorn" South American dictators, by various types of anarchists and by "ignorant" peasants.

And the chant they repeated most often over the years was that the US was an IMPERIALIST nation.

The asbsurdity of this accusation was enough to make make most Americans ignore whatever else these people might have been trying to communicate to us.

But after reading this new Perkins book about the seriously evil deeds our national government and closely allied corporations have been up to for the last sixty years, we are forced to conclude that Empire is perhaps the kindest way to describe "unofficial" American foreign policy since World War II.

Perhaps the most intriguing section of his book--and most pertinent to today's most unsettling issues--is his discussion of the the Mideast's modern history as planned and executed by the major Western powers.

The perception and understanding by these powers that economic success depended on an unlimited and uninterrupted oil supply has underscored virtually every foreign policy initiative by the West since WWII.

The anger and hatred felt by a growing number of Muslims, Asians and other third world citizens did not arise in a vacuum. It has been building for the last six decades--much longer in our own Southern Hemisphere. The West, with the US spearheading the assault, has focused with laser precision on exploiting and safeguarding any lands around the world that have oil under those lands. Most thinking people by now know that Saddam had nothing whatsoever to do with 9-11. So what the hell do you think we're over there for? For God's sake, it was our own economic hitmen and jackals (CIA) who put him in power there in the first place!

Not content with only taking their oil, the corporations that do the actual work have exemplified the worst elements of unbridled capitalism by despoiling the land and water of those countries while giving almost nothing back to the people who are the rightful recipients.

Over the years, I've seen the concept of "unquestioning patriotism" become preeminent in our nation. Those who we depend on to ask those questions--the national media--have become part of the corporatocracy that conspires to create this world empire we call The United States.

John Perkins spent the first part of his life as an important element in the drive to create this empire. He now intends to spend the rest of his life trying to undo what he helped to create.

In a more-enlightened nation, these two books together would be required reading in every high-school history class. Only by seeing past the sophomoric belief that everything we as a nation do is good and that any criticism is unpatriotic will we also be able to hear beyond the angry slogans shouted at us throughout the world by those who have been victims of this; the American Empire.

Time to Take the Red Pill....!, April 2, 2008
Funny how all the deniers and thos who rate this author's books as "impossible" or "a fabrication" do so, I am willing to bet, from the comfort of having never left their own zip code. How can it be, if their scred "free market" and the government are forces of "freedom and justice"???

As a fomer officer of the Guatemalan Army, charged at one time with guarding those "advisers" and "experts" recommended by the US Embassy, witnessing the granting of unfathomable amounts of money and visas to the US for ministers and their families, as rewards for granting this or that contract to a selected few companies, I can assure you everything Perkins says is true. For those who ask for ironclad proof, it should be an invitation to get off their behinds and do some research of their own, the facts are out there but that would be too much to ask. There is a saying in Guatemala: No hay peor ciego que el que no quiere ver. "The worst kind of blindness is the one that refuses to see"
I really despair when I see the situation the country and the world are in nowadays and still there are those who claim it's all good. But as far as these books, they are an eye opener to how business is REALLY done outside the golf and country clubs of the US.

Why Do They Hate Us? Perkins Provides Answers that Won't Make You Proud, July 28, 2007
My mind reels as it did after reading "Confessions of an Economic Hitman." The obvious greed and lust for power of the American "corporatocracy" grows and continues. Can this be accurate? Can the United States have fallen so far as to rape and pillage the rest of the world?

Looking at conditions around the world, feeling the hatred that so many hold for "the Americans," I am forced to believe the witness of my own eyes.

Africa, South American, Middle East - American economic traps span the world. American embassies tote home the loot. America's reputation grows darker. Should we continue to wonder why they distrust and hate us?

Without doubt, the events related in this volume are filtered through the mind of a single participant. Therefore, they do not and cannot reflect the whole truth. But should they be as much as 50% accurate, the implications are chilling and shameful. The United States corporatocracy is guilty of immoral and illegal acts.

Like "Confessions," this volume will undoubtedly come under attack by NeoCon shills. Do yourself a favor. Ignore them. Ignore me, too. Read this book for yourself, painful though it will be, and then draw your own conclusions. Should you choose to accept the mission, Perkins suggests concrete ways you can change the world. America's can-do spirit is still alive.

65 Vignettes, Roughly Ten Years Behind Ecotopia, December 17, 2007
I have mixed feelings about this book. The author repeats his claim to have worked for the National Security Agency (NSA) and I for one do not believe it. Like his first book, I find roughly 15% of what he writes to be delusional.

In no way does that lessen the value of the rest of it. This is a solid four star book with 65 vignettes spanning the world. It is suggestive rather than definitive.

The author appears to be elevating his consciousness and the book is, as he himself describes it, optimistic about our being able to solve problems we created. He has done some homework, incomplete, on entry points to a living democracy.

I will use my allowed ten links below to suggest that the US government and the US economic system has finally broken down. If We the People do not reconstitute Congress and elect a transpartisan leader in November 2008, all signs are that we will go straight into a major economic depression. There are 177 failed states today, up from 148 in 2006 and 75 in 2005.

The list below, for which I have provided reviews, begins with the worrst and ends on an upbeat note--Wall Street now "gets it" and they are ready to support a return to moral capitalism and legitimate governance.

Vice: Dick Cheney and the Hijacking of the American Presidency
Running on Empty: How the Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do About It
The Sorrows of Empire: Militarism, Secrecy, and the End of the Republic (The American Empire Project)
Rogue Nation: American Unilateralism and the Failure of Good Intentions
The Shock Doctrine: The Rise of Disaster Capitalism
A Power Governments Cannot Suppress
The Battle for the Soul of Capitalism
Society's Breakthrough!: Releasing Essential Wisdom and Virtue in All the People
Day of Reckoning: How Hubris, Ideology, and Greed Are Tearing America Apart
Independents Day: Awakening the American Spirit

One final note: Lawrence Lessig has said he is committed to outing corruption, and that is a good thing. It is corruption that allows corporations to loot the commonwealths of other Nations while also picking the taxpayer's pocket. The sooner we get total transparlency and demand that all legislation be posted online a week prior to the vote, the sooner we can eliminate secret earmarks where our money is used to repay corporate bribes and contributions. For a sense of the ten high-level threats to humanity, the twelve policies that must be harmonized, and the eight challengers for whom we must develop a compelling alternative model for the future, visit the Earth Intelligence Network. The weekly report, GLOBAL CHALLENGES: The Week in Review, is free.

A must read book for all who care about peace and humanity!, October 25, 2007
John Perkins continues in his tradition as a former economic consultant to plutocratic institutions who realized the hidden agenda of such organizations and wanted to reveal to the ordinary citizens of this country what "foreign assistance" actually entails. He uses material from his previous best seller CONFESSIONS OF AN ECONOMICS HIT MAN and expounds on it to provide a thorough in depth examination of the politics and intrigues of economic development projects and its profiteers. Perkins, an economist by training, documents thorougly the close ties between economics and poltical realities often with detrimental consequences for the majority of the world's citizens while benefiting certain elite groups who are determined to build a new global order. In doing so, the scarce resources of this planet are being destroyed, and unneccessary conflicts are being created to add to the coffers of these global elitists. I was so glued to this book's amazing factual information and the thorougness of Perkins' research that I found it quite difficult to put down for even a moment!

I am an economics professor myself and try to conduct my classes using a real world approach rather than asking students to memorize esoteric graphs and charts which practical economists such as this author would probably scoff at. Perkins gives insight as to why many people in the world view Western aid projects subsidized by such organizations as the World Bank with skepticism and contempt. Throughout the book, Perkins exposes the "corporatacrocy," or the collusion between international bankers and multinational corporations based in the U.S. that seek to plunder and to profit from the exploitation of precious resources at the expense of native peoples, who are viewed as expendable pawns in the conquest for global domination by the plutocratic elites. This is usually done in the guise of foreign aid, which Perkins has a substantial understanding of in his former career as an "economics hit man." This is a person who tries to lure leaders in developing nations to essentially sell his/her country to the control of these multinational corporations in return for lucrative devlopment projects that benefit only a small handful of individuals while keeping the majority of the country's people in dire poverty. If the political leaders do not comply, "jackals", or political thugs are sent to disrupt the national scene. This may even lead to kidnappings, bombings, and assassinations. In extreme cases, the military forces of Western nations are sent to overthrow noncompliant leaders and to install "puppets" to serve the interests of their corporate paymasters. Witness what we have been seeing in places such as Latin America and the Middle East over the past several years!

I highly recommend John Perkins' breathtaking work to any concerned citizen. He/she will be amazed at how reality differs from what politicians and business leaders would like us to believe. One of first the questions I ask my students is why economic and business theories may not always work in the world of ours. Perkins' book is an excellent answer to this open-ended question in the tradition and the style of his previous exemplary work . He deserves a Noble Prize in Peace for this revealing work in trying to promote human understanding and sustainability in these trying times.

The truth is out there, August 3, 2007
I have read Perkin's first book- Confessions of an Economic Hitman and now this one. I have to say both were well written but I prefer the first one a little more. I felt this one was a little dry and did not flow as consistently but it is understandable why- you are brought to different periods of his life with stories about other EHM's, jackals, and CIA operatives. Nevertheless, it was an excellent read with lots of useful information. With this book, you will understand how corporations, the government, the world bank, and IMF use third world countries to expand financial enterprises in USA- some of it is legal but dirty; some of it is deceptive, and other dealings are down right illegal. I think both these books are a wake up call for everyone in this country to challenge the establishment regardless of your party affiliation because it appears the majority of the government is in cahoots with the corporations.

Hit Man Turns Peaceful Warrior, January 30, 2009
In this book, Perkins makes several contrary things hang together. He tries to give an eyewitness account of secret intrigues, but also a big picture of recent world history. He damns both the American establishment and himself, but then gets motivational for changing the powers that be.

At first the book reads almost like a spy novel. Perkins wants to convey the glamor of high finance conspiracies, with the posh hotels, the geisha girls, the jackels, and the mirror sunglasses. How else did a man of conscience get sucked into all this? But then he meets more and more local leaders from countries around the world, who tell him the real scoop on the effects of US "development" policy. These people often need to remain anonymous, which sometimes leaves Perkins to vouch for his own testimony. Still, the accounts build up to an overwhelming case, which checks with lots of things we all know.

Then Perkins tries his hand as a motivational writer for global change. And here he gets downright authentic. A lot of this section comes from rather spontaneous speeches, where he set out to talk from the heart without notes. His stories of activists influencing corporate policy are practical, inspiring, and challenging to all disengaged critics. By the time he's done, you wanta be on this guy's side.

An eye opener!, July 30, 2007
John Perkins is a hero. I admire the courage he has demonstrated in exposing the corporocracy. I am amazed that more people won't come out and tell the truth as the writer has done. Eventhough I always suspected that the killings, resource-grabbing, and bannkrupcy of the third world were somehow related, I had never had seen anyone articulate it in such moving and profound way. Thank you John!

This Book is changing the destiny of the United States, July 6, 2007
I'm sure this book and "Confessions of an Economic Hit Man" are establishing a new understanding for the average person of human activity on our planet. The educating of the American public, let alone the Western European public and the rest of the world, will take some time and these two books are up to the task.

I think this latest book deserves six stars! Anybody who doesn't think this is of course entitled to his or her opinion - but they are missing the point of "The Secret History of the American Empire".

I think our Founding Fathers would be proud of John Perkins. I think the leaders of the corporations mentioned in his books must be paying attention as well. We have entered a new era of planetary history, and like it or not, we are all in this together. It is time to read these books more than just once, and for each of us to figure out what the necessary next steps are to be.

Please read this book and educate yourselves. This is important stuff.

I also think the United States is not an "evil" country, and Perkins makes this eloquently clear in his book. It is, however, being run by people in powerful places world-wide who seem shortsighted in their vision of the future. And it has been damaged by the mean, inhumane policies executed by many (corporations, government leaders around the world, and to a certain extent, all of us) for selfish, thoughtless and irresponsible use and waste of the world's resources.

It is obviously time for a change, but what that change will be and how it will play out is anybody's guess at this point in human history. What is clear to me from Perkins' works is: We must face ourselves as a global society and these organizations called "corporations" and demand a different kind of behavior and action related to their business dealings -- a kind of behavior and action more in alignment with integrity and the principles the United States was created to stand for. This is new territory for all of us and I think the immediate future looks a bit frightening, but not totally hopeless.

Thank you John Perkins for really making a difference. Please continue to do so!
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