No comments about The New Golden Age: A Revolution against Political Corruption and Economic Chaos.

5 comments about The Good Society: The Humane Agenda.

1. John Kenneth Galbraith sees the eternal struggles of economics as a battle between capital and labor and as things currently stand capital is delivering haymakers and body blows to labor. Labor has the numbers but capital has the advantage of... well, capital. Capital can afford the best representation and that has never been more true than today. Meanwhile Globalization has effectively destroyed labors bargaining power.
   
   In `The Good Society' Mr. Galbraith attempts to map out an economic plan for creating a good society for all, wealthy and poor. What sets Mr. Galbraith apart from many economists is his belief in a pragmatic rather than dogmatic approach. He even compares the Republican parties 1994 `Contract with America' to the `Communist Manifesto' for its ideological inflexibility. The problems seem to occur when people start believing that economics falls under the hard sciences when in truth it's more like tracking the weather where small perturbation can cause dramatic changes. One thing that the author has maintained through the years is that Feds actual effect on inflation and recessions is negligible and more smoke and mirrors meant to give the appearance that something is being done. The other issue is that Globalization has made it increasingly difficult for the Federal Reserve to adjust the levels of our economy.
   
   Occasionally the author comes off as a bit naive as when he talks about large scale modernization projects done in the third world saying, "The steel mills, hydroelectric plants and shiny airports, now sited among ignorant people, became sterile monuments to error - and failure." What Mr. Galbraith fails to recognize is that these projects are only failures from the perspective of the recipient countries who borrowed away their futures in order to acquire them. To the IMF and the construction companies involved it was a complete success. The author does recognize that the gift wealthy countries should have offered was the much less glamorous gift of education. In another section Mr. Galbraith says in reference to Imperialism and Colonialism, "We speak sometimes reflectively, of the end of history; here, indeed, history has come to an end." Writers who use the unfortunate term `end of history' have a bad tendency of being proven wrong in the end.
   
   John Kenneth Galbraith is one of the few economists of late who addresses the immense danger of wealth inequality. In contrast to Milton Freidman, Mr. Galbraith believes that there are both financial and ethical sides to economics as relates to helping the poor, protecting the environment and supporting workers rights. He also supports transnational organizations and sees Globalization as the inevitable future. In most ways Mr. Galbraith is swimming upstream against the trends in the United States which is exactly why I find his views more important than ever before. The book seemed to lose some steam about half way through and many of his ideas such as the danger of the military industrial complex have been addressed in his other book, still I recommend Mr. Galbraith as a responsible voice for progressive economics.



2. I am writing this review on the day after John Kenneth Galbraith passed away at the age of ninety- seven. He was a legendary figure in his lifetime, an economist with a world reputation. His book 'The Affluent Society" (1958) made the U.S. and the world think again about the meaning of a society primarily devoted to individual consumer consumption. He was a public servant of great ability and dedication from his days working for the Roosevelt Administration during the Second World in the Office of Price Administration through his service to the Kennedy and Johnson Administrations . He served as U.S. Ambassador to India and was a strong advocate for that country in the U.S. For over thirty years he taught at Harvard and was considered one of its most popular and brilliant teachers. He wrote over thirty books, and was involved in a tremendously wide variety of public activities and affairs.
   This short book is an updating of 'The Affluent Society'. In it he tackles major economic and social questions >He speaks of a good society whose obligations are to provide for " personal liberty, basic wellbeing , racial and ethnic equality, the opportunity for a rewarding life".
   In short chapters of around ten pages he tackles the problems of the deficit, the environment, migration, the proper distribution of wealth, the providing of aid to the world's poor.
   Galbraith was a fighter in spirit , a person of great wit and fierce sense of social justice. His platform of a kind of social democracy as the ideal way to meet the modern world's problem certainly is questioned by many, not the least by predominant economic opinion today.
   Perhaps his greatest importance was in pointing out performance problems in capitalist societies, and demanding a greater degree of concern for the commonweal.
   He was one of those rare intellectual figures who could take a relatively dull subject and make it 'interesting' for the broader public.
   He worked hard, long and well and his contribution will hopefully not be forgotten.



3. Sometime in the 1970s, several trends started to take effect in the USA that have led to many of our troubles now. One of these was the growing divide of the America into haves and have-nots. Another one of these was the privatization of numerous parts of the US economy, and the transfer of many government functions from the public role to the private market. A third effect was the de-emphasis of public infrastructure for the public good, to public infrastructure for corporate wealth. John Kenneth Galbraith addresses all three of this trends, and shows what they have done to the American society and American communities. The result is a good wishlist of probably most political liberals. The one thing lacking from the book is a comparison of what America has become, to the economic and social transformations that have occurred in societies that have incorporated many of Galbraith's ideas, such as Scandinavia, Singapore, and Japan. Overall, an OK book and a good summary of the author's works and views.



4. Galbraith is an economist who could only operate in academia--in any other setting he would be a joke. In his many books, which are widely cited, he attempts to provide an economic justification to socialism. The principle flaw in this book, from which all the others radiate out, is that all spending is equal. That government spending is just as productive to the economy as personal or corporate spending. He uses this assumption to justify confiscation of wealth by the government through the tax code. Of course, we know now that most of the taxes collected by the government is at best wasted money, and at worst counterproductive to society (welfare, subsidies, foreign aid to countries that hate us, etc.)
   
   All that being said, I highly recommend reading this book. It's important to know the enemy.



5. It is refreshing to read a book by an author who provides answers and not just criticisms. Professor Galbraith truly conforms to Robert Heilbroner's colorful description of the economists throughout history as The Worldly Philosophers. Without doubt this is the work of one of our modern day Worldly Philosophers.
   This book was written in 1996 when Mr. Galbraith was a very old man. The title of the book suggests a utopian message. Its subtitle is The Humane Society. But being a Worldly Philosopher and a professional economist, Professor Galbraith's "Good Society" is no dreamy eyed fantasy. It is an outline of not only what should be done but what is practical and achievable in a society - particularly our society here in the USA. Of course this is all predicated on the notion that we live in a society that has a moral conscience. If you believe that you live in a world that is beyond morality or conscience or that the way things are is the way that things should be, then I would predict that this book will not interest you all that much.

1 comments about The Wealth Inequality Reader, 2nd Edition.

1. I am a sociology professor who has searched long and hard for short, readable articles to give my students an introduction to thinking critically about wealth and poverty. This reader assembles a range of interesting readings that one is unlikely to find in the standard college textbook on poverty and inequality in America. There is a nice attention to issues like taxation, housing and property ownership. There are also several articles that advance innovative ideas about social change.

5 comments about Maestro : Greenspan's Fed and the American Boom.

1. The coziness of our nations politically elite always makes for interesting reading. While there are some interesting tidbits throughout, i.e. Alan Greenspans association with Ayn Rand; the familiar names of the politically entrenched and the precarious state of our nation's economic machinations, this book was a bit boring. With that said, there were two things I found fascinating about D.C. life. First, there is an extremely strong current of Ivy League uber-ambition in our nation's capital; along with an extraordinary confluence of academic uber-achievement (PhD's lawyers & double majored PhD's). Second, I didn't know Alan Greenspan, along with his longtime and classy arm-charm Andrea Mitchell, were such savvy political operatives on the so called D.C. cocktail circuit or what a critical role socializing played in the running of our country. Other than that, I was a bit disappointed with this effort.



2. After reading this book I realized how fascinating a book can be when it is written by a washington insider like Woodword. Amazing book describes Greenspan, Fed, Whitehouse and the economics and politics behind it in the most lucid manner possible.
   
   Very true in nature expresses very candidly Chairman Greenspan's political manuevering and how Whitehouse makes a non political instituion political.
   
   Excellent and much more interesting to read compared to Mr. Greenspans own auto biography which in itself is a very good book.



3. ~Maestro: Greenspan's Fed and the American Boom~ is a rosy bit of economic subterfuge heralding Greenspan as an economic saviour when in reality we're paying the price for the Federal Reserve's inflationary scheme throughout the 1990s. If the markets set interest rates, we wouldn't see the vicious cycles of boom and bust, the subprime mortgage crisis, and the housing bubble. But such subversion is always attendant to fractional-reserve banking. A wiser more honest Alan Greespan wrote an essay entitled 'Gold and Freedom' in the 1960s. Therein, he observed: "In the absence of the gold standard, there is no way to protect savings from confiscation through inflation... The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." Greenspan intuitively knew this was still true when Rep. Ron Paul of Texas grilled him in hearings before the House Banking Committee.
   
   People can mock the alarmists and goldbugs, but the U.S. Dollar is poised to fall over a precipice of hyperinflation in the twenty-first century. For years, it has enjoyed prestige as the reserve currency of central banks and reserve currency for OPEC exchange, but it is steadily starting to unravel. Too much public sector indebtedness, a 10-trillion dollar debt, trillions in unfunded federal liabilities, and an aging workforce will all point to American economic decline. In the 1990s, almost 65-70% of U.S. Dollars in existence were in circulation abroad. There is no telling how much it is today. The results will be catastrophic if a shockwave hits, and those Dollars come back home in mass. It doesn't necessarily entail a 1929 crash, but it will likely result in economic stagnation where inflation surpasses real economic growth and/or near-double-digit unemployment.
   
   There is nothing special about Greenspan. He had wisdom to get out and find a fall guy in the new Federal Reserve Chief Ben Bernanke. Bernanke will take the hit for his mistakes. Bernanke is afraid to do any needed correction, or surgery in the form of tightening monetary policy, and will continue to prime-pump the economy and foment an inflationary shockwave and economic stagnation. The cure for inflationary woes is always more inflation. It's a melancholy fate, and the market correction will be devastating. His career will be short-lived and he will be the scapegoat. John Keynes, hardly a model economist, was prescient nonetheless when he observed: "By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some....The process engages all of the hidden forces of economic law on the side of destruction, and does it in a manner that not one man in a million can diagnose."
   
   "The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered."
   --Thomas Jefferson



4. I think that this book is very useful in the time we are living now. It show how the economy, especially the north american, but also the rest of the worl works. How the lack of responsability of what you offers to the market can destroy the market itself, and that, somehow must be supervise by some kind of goberment. anyway very interesting book.The General Theory of Employment, Interest and Money



5. From the prespective of 2008, this book is almost laughable. Its a fawning tribute to a man and an era that proved to be about constructing an illusion rather than building an economy.
   
   In the overheated smokey world of the book, Alan Greenspan is "Maestro". The great humanitarian economist who can create music with an instrument or with an economy. In 2008, Alan Greenspan is a man who created two enormous asset bubbles in the world economy and led the entire world financial system to the edge of collapse.
   
   The book is in most aspects a perfect reflection of the faults of the man and the era. Its a book more of the imagination than reality. Its a book that doesn't want to look to deeply or ask difficult questions. Its a book about wanting to believe rather than looking behind the curtain.
   
   Rather than the truth that Greenspan is a Ayn Rand trained objectivist devoted to the idea that human events and behavior can be taimed by mathematics, the book wants to paint a picture of greenspan the jazz sax man who makes decisions based on hunches. Rather than question Greenspan's reinterpretation of economic data to make "bad" trends "good", the genius of greenspan in finding the hidden meaning in productivity figures is explained.
   
   The greatest fault of Bob Woodward the writer is that he allows himself to be used by his subjects. Rather than reporting or analysis, Woodward is about backslapping, favors and access. It was as true at the time of this silly book promoting Greenspan as genius as it later was when Woodward started selling the Iraq War for the white house.
   
   The book is useful for amusement purposes only. It should not be taken seriously.

3 comments about The Weight of the Yen: How Denial Imperils America's Future and Ruins an Alliance.

1. This book is a must read for anyone interested in knowing how the Japanese financial world works, but is so well written that it should be on the bookshelf of anyone who cares about the US-Japan bilateral relationship. Especially if you want to know the truth about how the Japanese economy and financial market has been manipulated by the powerful beaurocracy, this is your book. For those mystified by Japan's "Lost Decade" and why it persists, this book will provide some surprising answers.

   Just as interesting is the author's analysis of the financial straight jacket that the US and Japan locked themselves into without truly understanding the consequences. Fans of the Reagan Administration will think twice about their hero when they realize the legacy that Supply Side Economics has left in both the US and Japan.

   At the risk of sounding pretentious, this book really is a true tour-de-force.




2. To study Japan as I do without studying its economic side would be like studying Europe but neglecting England, France, Germany, and Italy. This book gave me a great introduction to the nature of the exchange rate's importance and what factors cause its fluctuation. It largely fills one key component (economics) of one's overall study of Japan. As with most outstanding books, reading this one has led me to many other books. You don't need a Phd. in Economics to read this one!



3. This is a good example of that.

   Mr. Murphy (an investment banker, BTW) sounds like Eamonn Fingleton when he talks about the loss of the "good manufacturing jobs."

   Some things that were not mentioned in the book:

   1. A nation is a "debtor nation" when foreigners purchase a lot of its assets. But this debt is more similar to what happens when you put money IN the bank. For every deposit, the bank goes deeper into debt because people feel safe parking their assets there. This is similar to the USA, where foreigners feel comfortable putting their assets here, necessarily resulting in a trade deficit. Until very recently, over 90% of the US trade deficit was driven by capital investment.

   2. Trade deficits are ONLY contingent on the level of domestic savings and investment. In the case that the latter is greater than the former, a trade deficit will result. Note that in the last several years of Japan's economic crisis, the trade surplus has actually *increased.* People in Japan are finding anyplace else to put their money but Japan, and the trade surplus is the result of that and not the cause.

   3. Many authors have pointed out that capital and labor productivity in the USA are a LOT higher than they are in Japan. The system of keiretsu has actually resulted in Japan's having a significantly *lower* domestic productivity than in the US. And as we all know, the ultimate determiner of standards of living is productivity-- NOT exchange rates. When looked at in terms of productivity, the US standard of living is about 50% higher than what it is in Japan.

   4. Some have made the case that Japan's exporting industries, which really WERE subject to market discipline developed in spite of (and not because of) the keiretsu system. ("Can Japan Compete?" Sakakibara/Takeuchi/ Porter). Another worthwhile read may be "Japan, the System that Soured," by Alex Katz.

   5. Fiscal policy: In just the short space of ten years, the miraculous system has gone from being set to take over the world to having a credit rating about the same level as South Africa. Now *that* took some doing. And this is at the same time that the Congress that coincided with the Clinton administration put the budget back into surplus. Trends, whatever they are, are quite reversible.

   Time has not proven his fears founded in reality. The biggest lesson from this has been to NOT pay attention to people who shouldn't know what they are talking about.

1 comments about Reflections of a Political Economist: Selected Articles on Government Policies and Political Processes.

1. Here you will find a collection of short articles by Niskanen. The author is best known for his analysis of bureaucracy, whereby bureaucratization leads to overspending. Niskanen actually wrote on a wide variety of issues. The chapter on the Phillips Curve breaks with conventional views to argue that unemployment increases with higher inflation. This is clear as an empirical observation, though few economists presently admit to this fact. The chapter on the First Gulf War is accurate. Such advice should have been heeded. The chapter on Failure to Starve the Beast also deserves attention.
   
   It is worth noting that Niskanen is not overly generous to his predecessors. His assessment of the wok of Mises on Bureaucracy is curt and misleading. There is much more to what Mises wrote than the simple idea that bureaucracy is not checked by accounting losses. Mises arrived at many important economic and psychological conclusions in this book. It is also misleading to characterize this book as a polemic. That being said, I found Reflections interesting, despite the fact that there was little in it that I had not come across previously.

1 comments about Wall Street and FDR.

1. Courageous Author Sutton here lays bare one of the essential truths of American history: FDR was brought to power by corporate fascists. And these same Wall Street social engineers also brought the world the Bolshevik Revolution and the rise of Hitler, as Sutton proves in the companion volumes to this essential work.
   
   Between the covers of this very important work, Sutton reveals many fascinating details. Among the most interesting are these:
   
   In the early 1930's, General Smedley Butler revealed a fascist plan to take over the government of the United States. The plan was derailed, mainly through the courage of the highly decorated war hero General.
   
   FDR was greatly under the control of Wall Street power players, such as Bernard Baruch. In this volume, Sutton records one of Baruch's most revealing phrases, the "elation and fervor of war". Notice how similar is Baruch's affection for the horror of war to that our current neoconservative mad men.
   
   The book is excellent. It is much better written than "Wall Street and the Bolshevik Revolution". And the information contained herein is of the utmost importance to he who would understand this most pivotal of US Chief Executives.

5 comments about Las Venas Abiertas de América Latina.

1. Podemos decir sin dificultad que este es un libro contra el capitalismo; lo es. O que el autor da una opinión parcial; así lo hace.

   En este libro se muestra lo que pretende ser la otra cara de la historia y las noticias: Los datos que no conseguiríamos al buscar en sitios "oficiales" (reportes del FMI, grandes agencias noticiosas y similares). En el libro se dan datos acerca de pobreza, miseria, traición, asesinatos, hambre,...

   Podemos estar de acuerdo o no. De cualquier modo, para tener una mejor perspectiva de la situación, recomiendo leer también El manual del perfecto idiota latinoamericano, libro que considero el complemento de Las venas abiertas de América Latina.

   Aunque esté de más decirlo, conviene leer ambos libros críticamente, con la cabeza fría, como debe ser con los libros de estos temas.

   Las venas... ha sido prohibido en algunos países, aunque está en su 73ra edición en español (2001). La primera edición es de 1970 y la revisión de 1978. Nada cambia de una a otra, sólo algunos datos son añadidos. Esto es una muestra de su gran popularidad, pero cada lector debe decidir acerca de la veracidad de su contenido.




2. Hay verdades en este libro, pero es ridiculo que uno pueda creer que USA es el que a causado todo los problemas de latinoamerica. Japon y Corea del norte vieron intervencion "Gringa" y esos paises estan muy bien. Estan muy bien por la intervencion Americana? no. Pero latinoamerica no esta tan mal por la intervencion Amricana. Y este libro habla de Cuba como si fuera un paraiso cuando todos conocemos la realidad de Cuba, si Cuba es tan maravilloso porque tantos cubanos arriesgan sus vidas por salir de Cuba?
   O porque tantos latinoamericanos van hacia USA, porque quieren ir al "dark side" si es el imperio malo?

   Porfavor, ya es timepo que paremos de hacernos la victima y en cambio de gastar el tiempo culpando al "malo imperio americano", mejor trabajemos para tratar de sacar a latinoamerica adelante.




3. jamas he visto tanta ignorancia y mentiras sobre latinoamerica escritas en un solo libro. despues de haber leido este libro me he dado cuenta de donde proviene la miseria que existe en latinoamerica: de la misma gente de medio pelo, vaga e ignorante que cree que los EEUU es la causa de todos sus males. un mensaje para ellos: ponganse a trabajar y a producir cuerda de vagos!
   obviamente este libro es otro manifiesto frustrado de un comunismo muerto que no sierve para nada. pura basura propagandistica, que para eso si son buenos los comunistas.



4. The book content was excellent but the print was poor, some pages had missing words or letters.



5. El concepto final que el Sr. Galeano busca transmitir es que "Nosotros somos pobres porque ellos son ricos".
   
   Para ello, teje una fantasiosa red de cuentos conspiracionistas, la mayoría de los cuales no tienen fundamento alguno.
   
   La razón de la pobreza en Latinoamérica (vivo en Uruguay y he conocido la realidad de muchos países latinoamericanos) es justamente porque la gente le cree a personajes como Galeano y toma su teoría como una excusa para no tomar la actitud necesaria frente a la vida y en el trabajo. Somos pobres porque mientras nuestros gobernadores evitan el desarrollo con sus políticas marxistas, estos mismos corruptos nos roban y nos dejan en la miseria, escondiéndose detrás de libros como éste y echándole la culpa de la pobreza a "los del Norte".
   
   Hay demasiados casos de países que han sufrido más que Latino América (Europa después de la guerra, Japón, Corea, el mismísimo Chile) que han dejado de lado estas ridículas teorías, se han puesto a trabajar en serio para progresar.
   
   Si este libro fuera un libro de fantasía infantil, le hubiera dado 5 estrellas.
   
   Si quieren leer algo real, serio, recomiendo:
   El Manual del Perfecto Idiota Latinoamericano (Plinio A. Mendoza, Carlos Alberto Montaner, and Alvaro V. Llosa)
   Cuentos Chinos (A. Oppenheimer).
   
   Lo irónico es que el Sr. Galeano debe estar disfrutando de que su libro esté llegando masivamente al mundo globalizado con sus "destructivas" herramientas como lo es Amazon mismo, y debe estar haciendo su platita a través de este sistema, que es el objeto de crítica de su libro.
   
   POR FAVOR!!!!

5 comments about World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability.

1. In "World on Fire" Amy Chua does something remarkable - she looks at isolated facts - some well known, some less so - and shows us a pattern. She offers an interesting a compelling theory that may be able to explain quite a lot about the world - although not as much as Chua thinks it can.
   
   Before reading Chua, I knew of course that democracy sometimes led to extremist, racist parties taking over (see Zakaria's The Future of Freedom: Illiberal Democracy at Home and Abroad). Every economist knows that free trade has redistributive implications, and there has even been literature about the unequal spread of wealth between various ethnic groups (Easterly's The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics). But are these facts related?
   
   Chua argues that they are. From Africa to Asia, Bolivia to Burma, Kenya to the Philippines - small ethnic minorities have highly disproportionate amount of wealth - indeed, they often literally dominate the economy, with tiny minorities sometimes owning more than the majorities entirely. With Globalization - free trade en mass - the inequalities have, if anything, grown worse. Whatever the benefits to the majority in these countries (and I think Chua is overly pessimistic about these benefits) , they are greater for the rich.
   
   The existence of these "Market Dominating Minorities", in Chua's terminology, is the cause of three types of backlash. First, the majorities, feeling that markets help the minorities and not themselves, strike against markets - nationalizations, trade barriers and economic discrimination against the minorities are widespread. Majorities elect and support demagogues, who incite hatred against the minorities in order to win popularity and votes. Second, the Market Dominating Minorities strike back - against democracy, either via direct rule or by sponsoring a dictator from the majority group. Finally, in rare cases, the unrest between majority and minority deteriorates into ethnic cleansing and genocide - think about Ruanda, Zimbabwe, and perhaps 1960s era Algiers.
   
   I genuinely think that Chua's argument is original and penetrating. But neither the idea nor the book is flawless.
   
   Chua lacks a theory about why minorities dominate markets; At times, it seems that they do it by brute force, or as a legacy from the colonialist era (especially in Latin America). At other times, the minorities seem considerably more entrepreneurial than the majority - even prospering in the face of government discrimination (Malaysia's Chinese and Russia's Jews). Often it's a combination of entrepreneurship and power. The absence of a theory regarding the rise of the phenomena makes it difficult to know how to deal with it.
   
   A weakness of the book is that beyond this single, powerful insight, it has very few other ideas. Most of the book consists of stories of Market Dominating Minorities in various countries, and of anecdotes regarding Chua's adventures and misadventures in the tropics.
   
   Third, Chua over-extends her concept of "Market Dominating Minority" to the US as the world's Market Dominating Minority. The characterization misfire - Chua offers no evidence that the psychological, social, or political forces that shape the hatred of an indigenous majority to a small minority owning what it perceives its own economic and political assets are the same as the hatred, envy and resentment people around the world feel towards the United States. One obvious difference is that the US does not own most of the world's assets, and that its share of world production is decreasing with the meteoric rise of India and China. The US's economic preeminence is declining - and yet anti-American feelings seem to be on the rise.
   
   Even within countries, Chua's theory encounters some objections. If Market Dominating Minorities are such a conspicuous feature of most of the world's countries, why are they almost absent in Western history? The best candidate for such a minority in the West were Whites in the Jim Crow American South, and even that is an imperfect specimen. If we knew why the problem with dominant minorities seems to be absent in the West, perhaps we would know how to address is better in the rest of the world.
   
   All of which leads us to the final objection to Chua's book - the lack of a solution. Chua spends a chapter on "The Future of Liberal Democracy", looking for ways outs. In the end, Chua offers two solutions: Prudence and Philanthropy. Prudence means that democracy and free markets should be introduced gradually, with adaptation to local conditions. Philanthropy, or rather PR, would be the attempt of the minorities to improve their image by contribution to society. I have to admit I'm skeptical of both.
   
   I doubt angry majorities would be won over by the Philanthropy of the rich minorities, at least in the long term; It is bound to appear as the self interested activity that it is, and worse, as charity, and therefore condescending. The problem with Prudence, or governmental checks on popular democracy and free markets, seems to me to be one of vicious cycles - the kind of countries that could most benefit from effective activist government policies are the ones least likely to have them; Governments in third world war countries are notoriously corrupt and inefficient (In general, see William Easterly's book cited above and also his The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good; Edward Luce's In Spite of the Gods: The Rise of Modern India offers ample demonstration of incompetence in action in India).
   
   Perhaps, and I say this very tentatively, the lesson we in the West should learn in humility. Western politicians, intellectuals, and general public obviously lack knowledge of the conditions world wide, nor do we posses the keys to economic growth and development. Perhaps we should leave experiments with the suitable government and economic structure of every land to its own people. One may call this approach cold hearted realism... or maybe the age old principle of Hippocrates: First, do no harm.



2. Amy Chua writes about a subject that should get far more attention than it does: that most of the developing world has ethnic minorities that dominate the economy and that the majority are fundamentally hostile to the minority. Chua claims that the economic and political reforms pushed by the West fail to take into account this fact and, therefore, the result is repeated instability and violence.
   
   Free markets mainly benefit the ethnic minorities that already have the wealth, business connections and social capital, while doing little to benefit the masses. Democracy empowers the ethnic majority, who then use that power to persecute the market-dominant minorities. While Chua clearly beliefs that free market democracies are essential to the stability and prosperity of developing countries, she is ultimately very gloomy about the possibilities of a smooth and fast transition.
   
   Chua starts by showing that, in contrast to the Western nations, developing countries invariably have a very small ethnic minority that dominates the economy. In Latin America and southern Africa, it the whites. In Southeast Asia, it is the Chinese. In Central and East Africa, it is the Lebanese and Indians. In Russia, it is the Jews. In West Africa, it is the Ibo and Lebanese. Most of this is not new, Charles Sowell for example has written about this subject in great depth, but it is a topic that has been seriously neglected.
   
   Chua then shows that Western efforts to push free market and democratic reforms have one of the three following results:
   1) Ethnic majorities use their new-found political power to nationalize companies owned by market-dominant minorities.
   2) Market-dominant minorities protect themselves by supporting coups against the hostile democracies, leading to "crony capitalism."
   3) In the most extreme cases, ethnic majorities undertake ethnic cleansing and genocide to eliminate market-dominant minorities.
   
   One of the most interesting and thought-provoking sections in this book is about Jews in the Middle East and Americans globally. Each can be seen as international market-dominant minorities. While the rest of the book is focused on a minority in a specific nation, Chua shows that the same angst and violence that is focused on national minorities is also focused on the Jews in the Middle East and American globally. Because Jews and Americans are different ethnic groups who benefit disproportionately from free markets, the majorities focus their hatred on them.
   
   Finally, Chua wraps up with a serie of recommendations on what to do. This is probably the weakest part of the book, because she has caught herself in a conundrum. She has spent the entire book attacking Western promoted economic and political reforms, but she still believes that such reform is essential in the long-run. Her most interesting proposal is for market-dominant minorities to use philanthropy in their home nation to help the majority, particularly by funding high-profile national symbols. She also makes the case that Western nations need to be aware of the fact that nations with market-dominant minorities will react fundamentally differently to free market and democracy than ones that do not.
   
   Chua's main contribution is to introduce readers to the concept of market-dominant minorities: a concept that every observer of international affairs should be aware of (but few appear to be). For this, she deserves a five star rating. But the book has a number of glaring flaw that drop the rating to four stars.
   
   My main problem with this book are the following:
   
   1) Chua never shows how much the market-dominant minorities benefit their own nation. Charles Sowell shows that these minorities are often the drivers of their nation's economies conferring great benefits on the majority. Chua occasionally implies this, but more often she focuses on the suffering of the masses and the implication that their hatred of the rich minorities is partly justified. I wish she were more clear as to the tremendous benefits that market-dominant minorities bring, and the fundamental irrationality of the haters.
   2) Chua continually claims that free markets and democracy are breeding or at least exacerbating ethnic tensions, but she never gives any evidence of to an increase in ethnic tension over the last generation. She does give a lot of examples of ethnic riots, murders, nationalizations and coups, but she never shows that the frequency and severity have increased over the last generation. My guess is that the facts would show the opposite, completely argument against reform. Chua also makes frequent references to leftist/communist dictatorships of the past oppressing market-dominant minorities (a very interesting point), but she casually skips over the fact that this completely contradicts her overall argument. Anti-market authoritarian regimes are just as capable as market democracies of oppressing market-dominant minorities
   3) Sometimes Chua appears to be far too pessimistic about the standard-of-living of poor ethnic majorities in developing countries. She continually states that they are left behind by economic reform, but she never gives any concrete evidence. Based upon the hundreds of millions of people who have been lifted out of poverty in the last generation, it is difficult for me to believe that the contrast is as stark as she suggests. Clearly the progress is not as fast or as widespread as we would like, but it is not the stark ethnic divide that she suggests.
   4) Chua is also quick to label authoritarian regimes as "democratic" to support her argument. To label Zimbabwe, Serbia and Rwanda in the 1990s as democracies (to give just three examples) is a bit disingenuous. They were actually some of the most authoritarian and anti-market regimes in the world. If she had a tighter definition, I think that she would find that the authoritarian regimes are just as capable as democracies of oppressing market-dominant minorities. It is quite possible that these anti-market authoritarian regimes are worse for their country than the ethnic tension that Chua says market economies breed.
   
   Overall, though, I would highly recommend this book.



3. Excellent and compelling.
   
   I travel internationally 6 months of the year throughout the world, but even so, this book exposed a shadowy dark underbelly I was unaware of. The author's arguments are fresh, novel. believable and compelling.
   
   Anyone interested in world dynamics and the rapid pace of change that is affecting the entire planet will welcome this innovative and paradigm shifting book.



4. In World on Fire, Amy Chua proposes a thesis that is well researched, reality-based, and rooted in her experiences as an extended member of a Chinese Filipino family: The global spread of laissez-faire markets and nominal democracy has become a principal aggravating agent in group hatred and ethnic violence in some countries primarily outside the Western World where "economic-dominant minorities" concentrate enormous wealth and influence compared to the native, assimilated population.
   
   In the Philippines, ethnic Chinese make up less than 2% of the population yet control 60% of the country's economy, once aided by the Chinese-protective dictatorship of Ferdinand Marcos. She further extends this model to comprehend the unintended consequences of globalization.
   
   Ms. Chua writes in a clear and easy style as she cites further examples of this phenomenon. The reader is afforded a better understanding of these issues in many of the world's hotspots that are often disregarded by the world's mainstream media. A primary causal agent of genocide we often see but fail to understand may be deeply rooted in profound humiliation and poverty as a newly empowered oppressed majority lashes back indiscriminately at a now overwhelmed economic/politically-dominant minority or quite often their indigenous political enablers.
   
   The author enumerates an array of Southeast Asian countries where a Chinese minority is overwhelming an indigenous people: Myanmar (Burma), a 5% Chinese minority exploits teak, jade, and rubies; pre and post-Suharto Indonesia, a 3% Chinese minority controls nearly 70% of the country's economy; and so on.
   
   In Africa, she cites Zimbabwe (Rhodesia) and Namibia where a minority white, South African elite extends its control over rich diamond mines: "South Africa's Oppenheimer family has controlled the richest diamond mines in the world since 1908"; the market-dominant minority Ibo of Nigeria, the Belgians giving rise to the Tutsi minority in Rwanda, and the Eritreans of Ethiopia.
   
   In Russia, the Jewish Russian oligarchs sparked renewed anti-semitism and Russian nationalism as the oft-inebriated Boris Yeltsin ignored, then encouraged the onset of "gladiator capitalism." Putin would later exploit these special interests to gain power, then cleverly appease the Russian people by virtually neutralizing them.
   
   The author also identifies similar market-dominant minorities -- the Indians, the Lebanese, the "pigmentocracy" of Mexico, Israel as a regional economic/politically-dominant minority in the Middle East, and the United States as a global economic/politically-dominant minority.
   
   Arguably, many readers may have implicitly sensed the issues treated in World on Fire. Amy Chua's thesis neatly organizes and fairly explores the facts with nearly 35 pages of notes and references.



5. In Christian tradition, two of the worst sins are pride-obsession with one's own status; and envy-hatred of others for their good fortune. In a way Amy Chu's book is an example of what happens when these two vices contact each other on a massive scale.
   Now it may be true that all men are equal in God's eyes. It is theoretically true that all men are equal before the Law. It is not true that all are equal in other ways. Some individuals are simply more successful then others. Furthermore some cultures are more successful. That is an un-PC thing to say but no one really consistently believes in equality among groups anymore then among individuals(do you believe the Yankees and the local little league team are equal? That of course is a hyperbole as the differences between cultures are more complex then those between baseball teams. But the point is made).
   What makes some cultures dominate the market? The more fortunate would say that it is because of the good qualities their culture teaches. The less fortunate would say it was because of immoral means. As an Anglo-American I would prefer to believe the former explanation but I am obviously biased. However the most probable explanation would be a combination of the two, mixed with the inscrutable whims of fortune. But whatever the reason the relationship causes ill-effects on people. The envy of the unfortunate can at times explode into pent-up bursts of shocking and spectacular hatred. The more fortunate are often more subtle. They seldom hate strongly, but they can often have a habitual snobbery that they are not aware of themselves and which can hammer at the helpless feeling of the less fortunate.
   The book however is interesting on it's own aside from any "message" it carries. It shows many stories of different groups, which have prospered, often against remarkable adversity. People's like the Ibo of Nigeria, the Jews, the Chinese, the Lebanese and so on. It gives the "market domination" relationship at various scales from the local to the global. The author seems to identify with "Market-dominant" minorities. And indeed their stories resonate with me as we. But she shows the abuse some members of these minorities have made of their good-fortune as well. She raises more questions then answers. Her main suggestion seems to be that market dominant minorities cultivate noblesse oblige. Which is all very well, and should be done anyway irrespective of self-interest. But I have read of plenty of examples of noblesse oblige, and it is not clear that they are all that effective in preventing hatred. Another point alluded to is that "noblesse oblige" includes helping the honor as well as the material circumstance of others. Specifically the phenomenon of a particular economic product becoming a cultural icon. An obvious example is French and food. The French resentment of Macdonald's becomes understandable on this level.
   An interesting counterexample which Chu never mentioned is the relationship between Nepali and English. English are a classic market dominant minority. Yet they have tended to get along reasonably well with Nepali. One reason for this can be seen: the English did not humiliate the Nepali like they did a number of other peoples. Rather by giving them material benefits in return for services that increased the prestiege of Nepali(soldiering and mountain climbing), they managed to avoid humiliating them. That was not the goal of course. The English wanted the Ghurka's to help maintain their power and they wanted the Sherpas to help win glory. But that is just the point: self interest helped make the relationship better then many. This is a divergence from the book but it does give a clue, if not how to solve the problem at least how to reduce it.
   One thing that the book did for me which it might not do for everyone is that it took the emotional sting out. It is easier to avoid the mixture of vestigial cultural-guilt on the one hand, and resentment of other's resentment on the other when one realizes that such things are part of life and we all have to live with each other, one way or another. I suppose some would say that that is just my own self-satisfaction talking. But one must learn to live with himself as well as others and I never claimed to be perfect. In any case, my individual sins are enough to get on with let alone worrying about my share in collective ones which is a dubious concept anyway. The writer never really had a solution to the problem and indeed that is just as well, as attempting to completely eliminate problems that are so ingrained comes very close to attempting to perfect mankind. Which is silliness at best and disastrous at worst. But one thing Amy Chu did do is make some effort to helping us all to understand ourselves and understand each other. And that makes it worth reading.

1 comments about An American's Guide to Doing Business in India.

1. Easily a five-star book. This is by far the best book available for anyone planning to do business in India. It is especially helpful for small businesses that have some experience in exporting and/or FDI but not a lot. In one small book, Makar manages to cover every aspect of doing business for a country as large and complex as any you will find. His insights into conflicting cultural anomalies are especially helpful.