5 comments about Free to Choose: A Personal Statement.

1. The relationship between freedom and economics is undeniable. Also undeniable is the relationship between government and freedom. Milton Friedman brilliantly makes a clear persuasive case for the perpetuation of free markets and the elimination of big government, as a means of augmenting freedom worldwide and as a result expand prosperity. Although this book is over 27 years old, the economic principles of this book are as timeless as Adam Smith's "Wealth of Nations".
   
   The book covers topics, such as socialized medicine, which is even more popular today, due in large part to the propaganda promulgated by the sensationalist media circuits. Of course, Americans do not want socialized medicine so proponents are euphemistically calling it "universal healthcare". Mr. Friedman expressed that "in our opinion there is no use whatsoever for socialized medicine. On the contrary, government already plays too large a role in medical care. Any further expansion of its role would very much against the interest of patients, physicians, and health care personnel." This book was written almost 3 decades ago when the expenditure of healthcare was huge, however, not as appalling as it is now at close to 15% of the country's GDP. There are many factors involved in the rising healthcare costs, not the least of which is the government's inability to operate any activity cheaper and more efficiently than the private sector. There are no exceptions to this. None! Unfortunately, the tendency of government is to increase funding for programs that don't work. If it isn't working, then it must mean it needs more funding, is the philosophy of government. This clearly goes counter to the much more efficient private sector where costs are controlled in order to attain a dirty little concept called profits. It is in the self-interest of people and companies and not their benevolence, that most of the freedom and economic progress is dependent upon, according to Adam Smith and Milton Friedman.
   
   Mr. Friedman was a radical free trade crusader and the evidence espoused in this book is overwhelmingly effective at convincing most open-minded individuals. Friedman goes on to write "Wherever we find any large element of individual freedom, some measure of progress in the material comforts at the disposal of ordinary citizens, and widespread hope of further progress in the future, there we also find that market activity is organized mainly through the free market." He goes on to warn us that "Wherever the state undertakes to control in detail the economic activities of its citizens, wherever, that is, detailed central economic planning reigns, there ordinary citizens are in political fetters, have a low standard of living, and have little power to control their own destiny." He further declares that under such governments impressive monuments may be produced and a certain class may enjoy a full measure of material goods, however, ordinary citizens will become merely "instruments to be used for the state's purpose" and will receive only what is "necessary to keep them docile and reasonably productive."
   
   Friedman also covers topics on education, consumer protection, inflation, unions and what he believed, at that time, was a "turning of the tide" into a more free market based mentality by the general population. This period, however, was when Carter was still in office and Reagan was coming in with his message of small government and as a result reduction in taxes. I'm afraid that we are again seeing a turning of the tide, this time, unfortunately, we are headed into larger government and more social programs, due in large part to the short memory of the American public of what communism used to be and the continual romanticizing of socialist countries that provide its population with cradle to grave social programs, almost always at the expense of freedom and progress. We must be careful!
   
   This book is a must-read to gain a fundamental understanding of economics, and as a reminder of the basic economic principles that have made America great. Enjoy!



2. A more essential guide for those of conservative and libertarian leanings I can't think of.
   
   Friedman, in his traditionally accessible, though brilliant, way elucidates economics, politics, and freedom in a timeless classic.
   
   Would buy again and again.



3. Arguably Friedman's magnus opus, Free to Choose is a book that will radically change the reader's way of thinking. Admittedly, before reading this book I would have been proud to vilify the free market. Like so many others, I fell victim to the demagogues. Free to Choose revolutionized my ideas about the role of government, and how intervention is inherently inefficient. Frieman's ideas are undoubtedly controversial, but Friedman himself was no polemicist. He would look down upon today's radio scum, like Rush Limbaugh or Sean Hannity. In fact, Friedman would look down upon most modern conservatives. He proudly acknowledged that he was in fact liberal (in the term's classical usage).
   
   Free to Choose brilliantly reveals how over-regulation, astronomically high spending, and an ever-growing bureaucracy have impeded freedom. In the chapter "Created Equal", Friedman summarizes his entire set of ideas in a few words. He says that today many are pursuing "equality of outcome" rather than what the Founding Fathers pursued - "equality of opportunity."



4. Dr. Friedman is plainly an educated and articulate man and his arguments have a seductive veneer of logic to them. The tragedy is that his interpretations are extremely selective: he focuses exclusively on what he perceives to be the strengths of the free market, while completely disregarding its costs. In this respect, he shares the mentality of the fundamentalist. Anything that ever goes well, he attributes to the free market; anything that ever goes wrong, he dismisses as either an aberation, a reflection of inadequate adherence to his core belief system. He has thus created a logical closed loop, which admits no possibility of his starting assumptions being flawed.
   
   Which is highly unfortunate, as he makes a great many assumptions, such as costless mobility of labor, perfect information, and the eventual trickle down of wealth, which are empirically unsound. If a worker loses his or her job, Dr. Friedman assumes that, somehow, that person will be able to find a bigger and better job elsewhere. How? Where? How is that person going to find the wherewithal to pay for the additional training and/or education needed for that real or imaginary bigger and better job? How will s/he pay for rent, food, transportation, health insurance, childcare, etc., while looking for this bigger and better job? Such trifles are plainly not Dr. Friedman's problem; nevertheless, they do pose a whopper of a problem if you're the person who's lost your job.
   
   Likewise, Dr. Friedman simply takes it for granted that companies will behave honorably, will have access to perfect information, and consumers will never be misled or swindled, but will unfailingly shape the market based upon sound decisions. Wow. Must be a nice planet Dr. Friedman lives on. On this planet, companies make rash and/or unethical decisions on a daily basis which are based upon poor information and/or immediate short term gains, for which the general public bears the cost.
   
   Because Dr. Friedman ignores such inconvenient realities, he views the world through rose-colored lenses and is blind to the dismal performance of his ideas whenever they have been implemented as policies. In every instance around the globe, the inevitable result of Friedman's radical ideology has been a tiny handful of predatory capitalists becoming richer than kings while the rest of the country sinks into abject poverty. Dr. Friedman's ideas, in every instance where they have been applied, from Chile to Argentina to Russia to Poland to South Africa to SE Asia - the list goes on - have unfailingly produced huge surges in unemployment and poverty, wholesale selloffs of the country's natural resources and other assets, and, of course, the adoption of repressive measures by governent to force the unpopular policies upon the unwilling populations. How ironic that Dr. Friedman describes himself as an advocate of free choice, when he has personally advised governments around the world to coerce their citizens into accepting his disasterous economic "reform" programs. Not surprisingly, Dr. Friedman doesn't wish to discuss the victims of his ideas, or, insofar as he recognizes them at all, he condescendingly dismisses them as the tragic cost of "progress." Progress for whom? Again, Dr. Friedman doesn't concern himself with such details.
   
   The central flaw in Dr. Friedman's ideology is that he takes no account of wealth distribution. If an economy increases in efficiency, Dr. Friedman claims vindication. But if the benefits of any such increase go exclusively to a tiny minority while the vast majority of the population experiences a sharp reducation in quality of life, how has any overall increase in efficiency improved matters? Dr. Friedman seems to assume that the billionaires his policies create will reinvest their wealth into their local economies. Yet, empirically, we find once again that such is not the case. Billionaires invest their wealth where they can gain the greatest return on their investment. Why then would they want to invest in their own countries? The people who live there, thanks to them and Dr. Friedman, are unemployed and too poor to be able to afford to buy anything. The country's natural resources have already been privatized and sold off, what's left in the smoldering husk Dr. Friedman leaves behind to entice investment?
   
   In sum, what Dr. Friedman describes as freedom of choice is an attempt to legitimize and apply a palatable facade to a wild west approach to economics, in the which the strongest and most ruthless rise at the expense of the weak, a kind of economic Darwinism. It's not without logic, but the cold, cruel, heartless world Dr. Friedman has to offer is a pretty terrifying place.



5. 
   This is absolutely the best book on basic economic thinking. It is filled with sound logical arguments for free markets. This book should be the starting point for anyone interested in politics and politically economy.
   
   Milton Friedman is "way out there" for many, but his debating skills are solid. I used arguments in this book during debates in grad school and easily hammered classmates who couldn't figure out how to argue against the "green pieces of paper" statement when they were arguing on how the U.S. should eliminate our trade deficit.
   
   In this book Dr. Friedman will teach you what free market capitalism is and is not. He will demonstrate how government regulation failures lead to the Great Depression and how monetary shocks (kicked off by the government yet again) created problems in the early 70s. Dr. Friedman will make his case for school choice and discuss why regulation harms consumers.
   
   This book covers nearly all the most basic angles of economics you will hear about in your local newspaper and on tv. Reading this book should give you enough working knowledge to be prepared to debate or discuss economic topics with others.
   
   Milton offers you the tools and answers to hammer most any local socialist. His writing is clear and his arguments are easy to understand. I recommend this book to any person wanting to learn more about free market capitalism.

4 comments about Crowdsourcing: Why the Power of the Crowd Is Driving the Future of Business.

1. Like Wired editor-in-chief Chris Anderson before him with The Long Tail, Crowdsourcing began with a compelling Wired Magazine article, expanded with a blog, and was a deep enough and important enough topic in the new media age that it needed a book to be fully covered. Howe does a great job of mixing in definitions with several case studies to give the reader a fuller understanding of this phenomenon. A good read.



2. Apologies to The X Files. This is an interesting, albeit somewhat repititve, look at how the internet + engaged people= a new power source. Lots of insigtful examples: InnoCentive, a company which farms out to its diverse network those issues and problems that large companies, even with their big R and D departments can't solve. Why does it work? Those in the network are often dabblers but they come with no preconceptions and no ingrained group think that often stifles insight. And here is what's really interesting:75% of the time, the answer is already known by the person in the network to whom the problem is matched up with. Communities are forming organically, from the guy who made a movie on his own, put it on the net, and now gives web based training to those who want to do likewise to CincyMoms, part of the local newspaper which pays (not much money) moms in Cincinnati to blog info on the best place to get a pizza or hire a babysitter. Info that matters to their lives. Anyway, good stuff. The answer is out there.



3. From tee shirts to scientific research, the natives and the immigrants are working as a human network that uses diversity to trump ability. Using Threadless, InnoCentive, iStockphoto, Wikipedia, Longitude, Proctor and Gamble, and Open Source, Jeff Howe describes `crowdsourcing' as the latest way to get it done. A great read! Howe coined the term, and explains the phenom in an easy to read fun positive tough to put down book.



4. Jeff Howe has done an impressive job of gathering insight into the power of this old adage applied to today's Internet environment. The idea is that by opening up complex problems to the crowd in small chunks, solutions can be found and creative destruction can occur, in diverse industries.
   
   Take the example of iStockphoto, which allowed amateur photographers to undercut professional stock photography companies by opening up the market to anyone with a camera, or Innocentive, where tough research problems are posted and PhD's around the world work on them in their spare time.
   
   Crowdsourcing works, and has blossomed since Howe's original Wired article on the subject. This book has great ideas and case studies that can be applied to give your company, endeavor, or hobby a big leg up. Be the crowdsourcing champion at your organization and buy copies of this book to pass around! Everyone will be happy you did. :)

5 comments about The Road to Serfdom: Text and Documents--The Definitive Edition (The Collected Works of F. A. Hayek).

1. Without question one of the finest books every written in the realm of economics and politics. This is required reading for all whom love liberty and freedom.



2. This definitive edition has been edited and provided with a Foreword and Introduction by Bruce Caldwell who retained the prefaces and forewords of earlier editions. The text has been enhanced by explanatory notes and new appendices that are listed at the end of this review.
   
   Even after six decades, The Road To Serfdom remains essential for understanding economics, politics and history. Hayek's main point, that whatever the problem, human nature demands that government provide the solution and that this is the road to hell, remains more valid than ever. He demonstrated the similarities between Soviet communism and fascism in Germany and Italy.
   
   The consensus in post-war Europe was for the welfare state which seemed humane and sensible for a long time. Now it is clear that this has led to declining birth-rates amongst native Europeans, mass immigration from North Africa and the Middle East, and a tendency to exchange their ancient cultural values for multiculturalism and moral relativism which is just another form of nihilism as the French philosopher Chantal Delsol observes.
   
   In this timeless classic, Hayek examines issues like planning and power, the fallacy of the utopian idea, state planning versus the rule of law, economic control, totalitarianism, security and economic freedom. He brilliantly explains how we are faced with two irreconcilable forms of social organization. Choice and risk either reside with the individual or s/he is relieved of both. Societies that opt for security instead of economic freedom will in the long run have neither.
   
   Complete economic security is inseparable from restrictions on liberty - it becomes the security of the barracks. When the striving for security becomes stronger than the love of freedom, a society gets into deep, deep trouble. The way to prosperity for all is to remove the obstacles of bureaucracy in order to release the creative energy of individuals.
   
   The government's job is not to plan for progress but to create the conditions favorable to progress. This has been proved by the impressive economic expansion under Reagan and Thatcher and by the amazing growth of the Asian Tiger economies, and most recently India since it started implementing sensible economic policies. Everywhere entrepreneurial energy is unshackled, massive improvements follow.
   
   Nowhere is this more obvious than in the contrast between phenomenal growth in formerly communist countries like Estonia or Poland or even the economic health of the UK as measured against the stagnant economies of Germany and France during the first years of the millennium. Old Europe would have benefited by a Thatcher and the French would have welcomed Polish plumbers instead of being resentful.
   
   Hayek warns against utopian yearnings that are exploited by politicians, the stealthy way in which welfarism diminishes individual freedom, the totalitarian impulse and different types of propaganda. As pointed out by Chantal Delsol in Icarus Fallen, lack of personal responsibility leads to perpetual adolescence where citizens conflate desires with rights. Defining this process as the "sacralization" of rights, she shows that freedoms are then transformed into entitlements.
   
   What a pity people don't learn; what a blessing we have in The Road to Serfdom as a reminder and a warning. The new Appendix of Related Documents include: Nazi-Socialism (1933), Reader's Report by Frank Knight (1943), Reader's Report by Jacob Marschak (1943), Foreword to the 1944 American Edition by John Chamberlain, Letter from John Scoon to C. Hartley Grattan (1945) and Introduction to the 1994 Edition by Milton Friedman. The book concludes with an index.



3. I read this book while in high school, many people thought that I was radical and was being taken in by ideas that sounded great but never worked in principle. Essentially I was surrounded by people who approved of government expansion, as long as it was in their interest, this included fellow students and teachers, who in lectures about US history and government espoused the greatness of the government and those presidents who contributed the most to its expansion. This book readily refutes many of the claims that government expansion is not bad so long as the people helming the expansion are benevolent.
   
   It has become to be interesting to watch the news after reading this book, you will instantly see claims to more regulation of the lives of others and appointing people from academia to run these operations. If ever someone questions this arrangement, such as with the Fed, people will either claim that they do not know enough about the area being regulated or that the examples they point to of regulation gone wrong was an anomaly, enlightened and well-written legislation will solve the problems that may arise from regulation. But through reading this book you realize that the very nature and incentive structure of the bureaucratic system leads even the most well-meaning individuals to stray and even those that do not face the inevitable negative consequences that develop when the government tries to defy economic laws and limit the freedom of its constituents.
   
   This book should be required reading for those in high school (maybe even middle school, but many would not have the historical or vocabulary necessary to understand much of the book) and above. It was relevant in its time, yet it is even more relevant now, because then the fight was obvious, the enemies clear, and the motives and goals of all involved clearly defined. Now the enemies are those who wish us well, those who believe they are doing good when they are actually doing the most harm. The enemies of freedom today, more than ever, use gradual erosion, much like boiling frog, of liberty until waking up one day, we realize much of our freedom is gone. Hayek discusses concepts like these and more, it is a testament to his understanding of the workings of government and the incentives that go along with in addition to understanding basic economic principles that make this work so timeless.
   
   This edition is indeed the definitive, it corrects some of the citation errors in the original and provides many footnotes that help with some of the references Hayek makes to lesser known historical figures, works and events. The index is well done and helps greatly in finding those concepts you want to look over. The Preface to the Original Editions, Foreword to the 1956 and the Preface to the 1976 editions are welcome, they provide added insight, such as what the author wished to change and why he left certain elements the same across the editions. The introduction is something else, a great summary of what Hayek went through to publish this book and what lead him down the path to publishing the book while also putting the book into a historical context and explaining its continued relevance. It is a wonderful look at the history behind the book itself and Hayek as well. Lastly, the Appendix provides several reads that are insightful, the introduction to the 1994 edition by Milton Friedman is welcome. Bruce Caldwell has done a brilliant job with this edition, I find it hard to see anyone making a better edition, this is indeed the definitive.
   
   People, scenarios, governments - these all change with time, but the basic laws underlying economics and the workings of government do not. Just because people want to end poverty, hunger, unequal distribution of wealth and other malaises of modern life, does not mean using force and the government will cure them. As Hayek noted, "Is there a greater tragedy imaginable than that, in our endeavour consciously to shape our future in accordance with high ideals, we should in fact unwittingly produce the very opposite of what we have been striving."



4. Friedrich Hayek, the Nobel prize winning economist, wrote this brilliant classic as a critique of government intervention and manipulation in markets. I am neither an economist nor a political scientist, but I was led to this book after watching with horror the recent outrages that are consciously being inflicted on us by our elected officials, most recently the bailout and socialization of the two giant mortgage lenders, Freddie and Fannie. I couldn't remember that I ever received any share of the loot when those companies were making huge profits and their CEOs were earning tens of millions per year, but now I find that our elected officials have written a blank check in my name, the taxpayer, to bail out these companies' losses and stupidity, and then handed the check to a group of unelected officials (and, surprise, surprise, those two companies spend hundreds of millions on congressional lobbying). Privatize the gains, socialize the losses: sounds like a win-win situation for somebody.
   
   This kind of disastrous socialism is exactly what Hayek critiques in devastating form in this book, specifically government control of the economy. Apparently, they say, this book has been very influential, but a layman could certainly never tell by looking around. Hayek was writing from the perspective of a central European who had recently witnessed first-hand the unfolding development of National Socialism (Nazism) in Germany, and he is warning that the exact same attitudes and policies that had been followed in Germany were uncritically being followed by the Allies, merely at a few years distance.
   
   He begins by recollecting the ideals of old, classic liberalism, "the forgotten road". Of course, in Hayek's context, "liberal" means the true, historic liberalism of limited government, free markets, and private property, not "liberal" in the bastardized sense somehow hijacked by Leftists to mean unlimited government, socialized markets and massive forced wealth redistribution. He looks at the rise of collectivist thinking versus individual (it's all for the greater good); the problems of central planning in a democracy (someone in power makes the economic decisions for everybody else); the downfall of the Rule of Law (government is no longer bound by fixed rules announced beforehand but instead possesses arbitrary power limited only by its own discretion); the inextricable link between centralized economic planning and totalitarian regimes (if we're going to follow a plan, someone's got to force everyone to follow it); the problem of deciding how the society's production will be distributed; a chapter showing that "nothing is more fatal than the present fashion among intellectual leaders of extolling security at the expense of freedom" (Republicans apparently didn't get the memo); how in a socialized economy the worst individuals inevitably rise to the top (Really? Can it be? Obama and McCain?); the necessity of manipulating truth in a socialized society; and the fact that Nazism was a direct outgrowth of socialism and socialist ideology.
   
   The relevance of the points enumerated above does not require comment. We are running madly down the road to serfdom, which is the road of socialism. Unfortunately for those of us who are being dragged along against our will, history is not neutral, and we will suffer the consequences of other peoples' decisions, just as the Jews in Germany did and the Russians in the Soviet Union did. Socialism has always led to poverty and oppression, and freedom, on the rare occasions it has been tried, has produced unparalleled prosperity. Hayek shows in detail why. We've decided to give socialism another try. God help us.



5. The book arrived almost immediately, in better shape than promised. Seller followed up to confirm receipt. I was very satisfied with this vendor and would recommend them without hesitation. MOM

5 comments about The Age of Turbulence: Adventures in a New World.

1. This is very well written book by a brilliant economist. A history of a person in a very influential and challenging position offering powerful descriptions of these experiences.



2. People who are very knowledgeable about a subject seldom have the skill to communicate their knowledge to the general public. The ex Federal Reserve Bank chairman Mr. Alan Greenspan is one of those rare individuals. No doubt he has great wisdom , theoretical and practical knowledge of world economics, business, investment , finance and politics. But more important he very clearly explains these topics in his masterpiece called The Age of Turbulence not only to the general public not specialized in these subjects but also to professionals and experts. That's right even students and professors of economics and business, investment counselors, businessman, investors etc. have a lot to gain from reading or listening to the CD of The Age of Turbulence. The reader does not have to agree with everything Mr. Greenspan says and that does not reduce the benefit to be derived from reading the book or listening to the CD.
   
   In the Age of Turbulence the author explains very clearly and in a non boring way without using too much technical jargon the economic, political, social, business, financial and technological developments in major countries in the world, not just in the USA, from the end of the 19th century until 2007 and the likely prospects until the year 2030, not like a clairvoyant but different scenarios depending on various conditions. He places these developments within the context of various economic ideologies and analyzes how they compare in explaining world socioeconomic and political developments. Subjects he covers are very wide and encompass just about every major socioeconomic and political issue that have shaped the world history and are likely to impact the near future. His approach is not a doomsday prediction ; he doesn't just talk about the problems. He criticizes applications where necessary but also presents his opinion about what should be or should have been done or not done to prevent or solve specific socioeconomic crises.
   
   The narrator in the CD,Robertson Davis, also deserves credit, because he speaks very clearly. So if you are involved in economics, business, finance, investment, politics and consumption in anyway anywhere in the world, not just in the USA, and that means just about everybody, you can not afford to not read / listen to The Age of Turbulence.
   
   I listened to this CD and I was writing this review in September 2008 just as the financial hurricane that was taking place at that time in the USA had swallowed several famous investment banks and its effects rippled across the world. The crisis was still continuing as I was writing this review. This is a time when we all really need to digest Mr. Alan Greenspan's wisdom from his book.



3. What amazed me about this book was how little the book talked about economic policy and its underpinnings. Why did the fed do what it did during Greenspan's tenure? If you are looking for answers to that sort of questions, you will get nothing from this book. In fact, it is not clear if Greenspan even has a framework for monetary policy. For instance, he does not have great regard for Keynes' work, but almost everything he did would appear to be Keynesian. No explanations are offered. I found Alan Blinder's book a lot more illuminating on substantive issues.
   
   What you will get from this book is a lot of commentary on personalities of powerful politicians---a subject for which the author demonstrates more passion than any other. This is perhaps the book's redeeming feature: it is admittedly somewhat interesting and perhaps gives us a glimpse into why really Greenspan was one of the most powerful people in Washington for such a long tenure.
   
   It did get me thinking very differently about fedspeak though: I was constantly reminded of Peter Sellers in "Being there", as I read the book. Perhaps for that insight alone, my money was well spent on the book.



4. A must read for anyone interested in economics in general especially economics at the macro level. Especially with current economic crisis changing rules and shaking faith in 'laissez faire' capitalism.
   
   People now blame him for the crisis, I think it is not the individual but the ideology that did us in to this mess. History will judge him for years but this is a must glimpse in the life and mind of an intellectual who played a towering role as world's central banker.
   
   In the end, free markets don't work with proper legal framework put in place. One would argue US has the best legal framework to support free markets but I would say it was the loopholes which created absence of it and then it was free for all take what you can get looting. I would think Mr. Chairman will agree with this, although what level of regulation can we put in place and who will decide when is the right time to put a brake is debatable. The party lasted long on the street after easy fed money was gone but the liquidity in the global market allowed the party to continue. Potentially he could have ended the carry trade party earlier but again all this can be said with benefit of hindsight.
   
   The book is a great auto biography of an important intellectual of our times written in very accessible style language and representation. A necessary read in our times and may be for future generations to avoid the similar if I may "Irrational Exuberance!".



5. I'm about halfway through the book and find it fascinating. I am not an economist nor a policy wonk, but his interfaces with administrations from Nixon to the present, make for a deeper understanding of why the economy functions the way it does.

5 comments about The Innovator's Dilemma: The Revolutionary Book that Will Change the Way You Do Business (Collins Business Essentials).

1. It is the typical manager's nightmare. A startup with a powerful idea wipes out all the dominance your large ogranisation had. It can happen overnite and without warning.
   
   How do you stop this nightmare from happening? Well, the answer could lie in The Innovator's Dilemma.
   
   Kishore Dharmarajan
   Author of Eightstorm: 8-Step Brainstorming for Innovative Managers



2. This book is highly engaging and actionable and helps companies understand how innovation is powerful and long-lasting. I also recommend "Something Really New" which was just released as another powerful resource on innovation in companies. Something Really New: Three Simple Steps to Creating Truly Innovative Products



3. With the Innovator's Dilemma, Clayton Christensen delivers a very powerful analysis of the role of innovation in gaining market leadership. The question raised is whether market leadership can be sustained through innovation alone. Indeed, the core of the Innovator's Dilemma illustrates how successful companies with established solutions, marquee customers and a valued brand keep being threatened and at time vanquished by start-ups. A recent example would be how established enterprise software vendors have been shaken up by disruptive startups: Remember Salesforce.com vs. Siebel Systems? Christensen addresses a difficult problem that most successful customer focused companies face. Precisely, because it is a formidable challenge for an established company to bring disrupting technology to its own installed base of customers.



4. This book analyzes why established successful companies repeatedly miss "less sensible" (to their own value network) innovations in the low-end "emerging" market and how products in the low end market eventually displace existing products in the entire market. The book does a comprehensive analysis of the phenomena.
   
   However, I am not convinced with the analysis. People make wrong forecasts of trends and miss emerging markets for many reasons. New entrants fail in trial and error with this extremely high risk game. Does it make sense for an established company to maintain an independent unit for playing this high risk game at a considerable expense? Or should they be the follower and let small companies bear the initial high cost ? I don't think there is a clear answer like what the author has suggested.
   
   There are some uncommon and incorrect use of technology terms (e.g. Java "protocol",computer "automated "design), which let you doubt the credibility and seriousness of the author. The writing is in fairly academic style with great clarity. But it can be repetitive in many places, revisiting the same materials.



5. OK, I admit, some of it can be a bit boring, especially the first couple of chapters. But the premise and his argument are great.
   
   A product manager who has not read this book is not a product manager at all!

5 comments about Capitalism and Freedom: Fortieth Anniversary Edition.

1. I picked up this book because I wanted to learn about Milton Friedman and also some economics. Most of the information I have gotten about Friedman were usually from third sources. And depending on a person's political persuasion, the critique was either laudable or damning. We live in a very politically polarized time.
   What I discovered was a marvel. Friedman's writing and ideas were convincing and logical. There was no tinge of political right-wing rhetoric as I expected and his views were very well explained. Friedman came across as very reasonable and clear. I believe that he would have advocated an economic idea even if it strayed from his own beliefs as long as it worked.
   One of his ideas that I did not know much about was school vouchers. One of the ways of understanding school vouchers is to use the G.I. Bill as an example: Soldiers returning from WW2 service were given higher education vouchers so that they could attend any university or college that they wanted to. The G.I. Bill helped educate a generation of Americans. Everyone benefited because having an educated workforce is to everyone's best interest. A skilled and educated workforce means better jobs and a better standard of living. School vouchers would work exactly like the G.I. Bill would have. Like G.I.'s, parents would receive vouchers and they could then decide where to send their children. Interestingly, many of my progressive friends get fired up against vouchers. But I believe it is because they think that it means that all schools would be privatized. Not so. Taxes would still be collected for public education but instead of funds going to a bureaucracy, it would go to parents instead.
   Another piece of information that I found fascinating was Friedman explaining the cause of the Great Depression. I always thought that it was due to the stock market crash but this is only half the story. The stock market crash was bad but the biggest problem was the lack of action by the Fed. It constricted the amount of money in the economy and it also failed to act when banks started to fail: A role that it is supposed to take up and the reason that it was created in the first place.
   The last big point that sticks out about this book is Friedman's careful warning about the dangers of crony capitalism. Friedman advises against government subsidies or tax breaks for select industries. Inevitably, these sorts of practices are not only unfair and onerous to taxpayers but they encourage monopoly and are always harmful to free-market forces and to consumers.
   There are many, many subjects covered in this small book. Friedman packs more erudite learning into 200 pages than most others could in 500 pages. I feel like I have really learned something after reading this book. I highly recommend that you pick up and read this book if you are interested in economics and Milton Friedman. Don't depend on other sources when it comes to Friedman because as I have found out, they tend not to know about his ideas or are skewered by their political viewpoints.



2. One of the "readers" complained about the failures of the free market...I say 'readers' in quotations because the free market has never failed. There has never been a 100% free market in America, but instead a Mixed Economy...just as there has never been a free market in Africa or anywhere else. There have always been elements of Government control.
   
   The perceived failures of the free market have always come from special favors given by Government to businessmen...thankfully this book does Capitalism justice by refuting the very notion that Socialism resembles a valid political/economic system.



3. A strong case for limited government and for reducing government's place in a free market economy. Even though 50 years old, it remains timely and thought-provoking.



4. Reading this book gave me a whole new perspective about life, economics and individual responsibility. It's a must for everyone, even if you are not a student of economics.



5. I literally almost vomitted reading this book for class. This father of Neoliberalism, the murderer Pinochet's pal, has caused immense suffering and destruction in the world with his proven-to-fail free market capitalism. Thank goodness he's dead. Lets pray there won't be another one as evil as him around for a while.

5 comments about Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics.

1. This book, first published in 1946, explains common fallacies (a false or mistaken idea) that are particularly common in the field of economics and public policy. At the very start of the book Mr. Hazlitt explains:
   
   Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in, say, physics, mathematics or medicine -- the special pleading of selfish interests. While every group has certain economic interests identical with those of all groups, every group has also, as we shall see, interests antagonistic to those of all other groups. While certain public policies would in the long run benefit everybody, other policies would benefit one group only at the expense of all other groups. The group that would benefit by such policies, having such a direct interest in them, will argue for then plausibly and persistently. It will hire the best buyable minds to devote their whole time to presenting its case. And it will finally either convince the general public that its case is sound, or so befuddle it that clear thinking on the subject becomes next to impossible.
   
   In addition to these endless pleadings of self-interest, there is a second main factor that spawns new economic fallacies every day. This is the persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups. It is the fallacy of overlooking secondary consequences.
   
   At first it seems as though not much has changed since the end of World War II. What has changed, though, is the scope of the dangers Mr. Hazlitt identifies. That's because government is much expanded and more assertive today than when this book was written. In 1946 the New Deal was not very old, and the tremendous expansion of government social programs was still in the future. We should take these lessons as even more important today.
   
   It is the overlooked consequences that cause harm. They are overlooked sometimes because they are difficult to see, as in the broken window fallacy explained by Frederic Bastiat and also in this book. They are also "overlooked" because, as Mr. Hazlitt tells us, one group wants special favors from the government, and although there is no way to grant these favors without harming some other group, the favor-seeking group will seek to hide, obfuscate, muddle, or minimize the bad effects. At the same time they promote the policy as good for everyone. This is largely the job that lobbyists perform, and billions are spent on it each year. That's because a powerful government has the ability to bestow valuable favors, those favors being paid for by someone else, someone often not easily seen.
   
   An example of overlooked secondary consequences is government spending. When government spends, it means it must tax or borrow. What government spends is not available for individuals to spend. When we see magnificent public works (say a new downtown arena in Wichita), we don't see all the things that would have been bought had the government not taxed to build the public work. We see the jobs created by the public work -- all the construction workers that will be building the new arena -- but we don't see the jobs destroyed because people had to reduce their spending elsewhere.
   
   Foreign trade is a case where people often fail to grasp the complete picture. We often see exports as something good for our economy, while imports are seen as bad. Imported things are things that American workers can't compete with, and so American jobs are lost, it is often said. But as Mr. Hazlitt says: "It is exports that pay for imports. The greater exports we have, the greater imports we must have, if we ever expect to get paid. The smaller imports we have, the smaller exports we can have. Without imports we can have no exports, for foreigners will have to funds with which to buy our goods." So those wanting restrictions on imports are also -- although they do not say this, either because they do not recognize it or it doesn't matter to them -- calling for fewer exports.
   
   In recent years we have been told that our is a "consumer-driven" economy, fueled by people tapping their home equity that accumulated from increased home values, or spending by going into debt. It is as though if consumers started saving rather then spending on immediate consumption, the American economy would collapse. But Mr. Hazlitt tells us that "saving is only another form of spending." After all, what is done with money that is saved? Today, few put their savings under the mattress. Instead, it is loaned to a bank or invested. Then it is spent on capital goods, which businesses use to increase their productive capability. The key fact is that businesses spend it. And, they spend it on capital goods that either expand their capacity to produce, or decease their present costs of production. Either way, that is good for everyone. It means more jobs, and better jobs. But this saving is derided as not being "productive."
   
   As a conclusion Mr. Hazlitt tells us:
   
   And this is our lesson in its most generalized form. For many things that seem to be true when we concentrate on a single economic group are seen to be illusions when the interests of everyone, as consumer no less than producer, are considered.
   
   To see the problem as a whole, and not in fragments: that is the goal of economic science.
   
   This is a very valuable book, which while dated a bit, cuts through the fog and haze of economics and public policy and lets us understand the effects of our government's policies.



2. If you want your faith in market forces and low taxation reinforced, this is a straightforward, but blinkered attempt to make you forget all about government regulation. Funny that west-European countries with bigger taxation and more government influence have less crime, better education, better health care, better TV programmes than the US. They also organise their politics better, so that the tax money is better spent. It did set me right on one or two points, and parts are written in a spuriously funny way, but it is too biased to be really informing . Clearly the writer has never listened to people he doesn't agree with.
   If you have an open mind compare this dangerous nonsense with the writings of Naomi Klein to see how unfettered capitalism works out in practice.



3. Based on other people's reviews, I thought this would be a fairly straightforward book that a person with a graduate degree but no background in economics (such as myself) would find easy to understand. That was definitely not the case, for a number of reasons.
   
   First, the writing is not at all impressive. I know economists are not reputed to be particularly good writers, but come on, get yourself a good editor! Some of the sentences were so wordy and poorly constructed that I had to read them several times to figure out how the writer would have written them if he knew how to write at all. And THEN I had to figure out what the sentence said in terms of expanding my knowledge of economics. It was tedious, to say the least.
   
   Additionally, the organization of the text within the chapters needs a significant amount of work. The chapters meander; if you are the type of person who likes to organize a chapter's contents into a mental outline as you read, good luck. This author clearly didn't start with an outline, mental or otherwise. It's like he developed each chapter based on chats he had in his living room, which he asked someone to transcribe, then chunked up into paragraphs and called it done.
   
   The author also doesn't do a good job of explaining what different terms mean. What's the difference between a tax, a tariff, and a duty? Darned if I know, and I read about two-thirds of this book before deciding it definitely wasn't worth my time.
   
   I also found the content he describes in his chapters to be somewhat outdated. It's hard to get a grasp of economics when you're trying to relate what you know about how a particular system works in the present to the way he's discussing it as working in the past. As I mentioned, I have no background in economics, so I have no way of knowing whether the particular system he's discussing has undergone a massive overhaul at some point, such that the system he's describing no longer bears any resemblance to the system I know. If you can't figure out how to integrate what you're reading into your existing knowledge base, you can't expect to expand your knowledge base.
   
   I also wish the author were more up-front about his political bent from the outset, as this would have helped me to interpret what he was saying in the context of my own political views.
   
   Overall, I do not recommend this book at all. Maybe I'd have a different take if I had read it for a class I was taking, so that the instructor could fill in the blanks and help put certain things into context. But just reading it on my own, with no background in economics to draw on, was pointless.
   
   I'm going to try naked economics next. Reviews seem to indicate that it's written by an economist who can actually write.



4. Economics in One Lesson was written by a journalist, not an economist. That said, it offers clarity that many economists can't. But don't be fooled, Hazltt was one of the few journalists who could understand economics.
   
   The book is designed to give you a basic understanding of economic thinking and logic. It is not filled with econometrics and regression analysis but with stories, thinking games, and logical puzzles.
   
   The book is simple to read and comprehend yet absolutely devastating to socialist big-government thinking. The book moves through one logical fallacy of big government thinking after another, followed by examples of how absurd their thinking really is.
   
   I recommend this as one a starter book on economic thinking right up their with Milton Friedman's free to choose. Minimal economic knowledge is required and you don't have to know any math. Basically...you should already know that a tariff or a duty is a tax on imported goods. If you don't, you should be able to figure that out based on the words usage in the text.
   
   Final word: the simplest book for free market thinkers. If you like to argue with socialists, this book will give you the biggest bang for the buck.



5. Great gift for your teenager or aging hippy who thinks all problems can be resolved if only someone else would foot the bill. Highly recommended for anyone desiring to support either party this year - will be an enlightening read no matter the side or the viewpoint - But I guarantee you will call yourself to question for your current views regardless of which side you are on today.

5 comments about The Great Crash 1929.

1. Galbraith does an excellent job in demonstrating how the private sector commercial bankers' unregulated short run,short sighted, penny wise ,pound foolish profit and sales maximizing behavior provided the financing and leverage for the real estate and stock market bubbles of the mid to late 1920's that led to the financial collapse of the DOW by mid 1931.The writing and analysis is excellent.
   
   I have one major criticism.No mention is made of the analysis provided by Adam Smith of precisely the problem discussed by Galbraith in this book. Smith's analysis covers nearly 100 pages and correctly identifies what the problem is-loans made by private commercial banks to 3 different categories of borrower-prodigals,imprudent risk takers(the "new" balloon payment financing of the 1925-1928 real estate bubble closely resembles the sub prime and alternative- A loans of the 2003-2006 period).Galbraith certainly could have used the analysis provided by Smith on pp.250-340 of The Wealth of Nations [1776;Modern Library (Cannan)edition] to buttress his position . Unfortunately,it appears that Galbraith never read Smith's book. He could have made use of the support provided by Smith,universally acknowledged as the world's greatest economist. The WN is a timeless classic that is just as applicable and relevant today as it was in 1776. Washington and Hamilton used Smith as the base of early American economic policy .The reader of Galbraith's book is advised to purchase a copy of WN as well.



2. There are bigger and more detailed accounts of the 1929 Crash, but Galbraith's effort is excellent at distilling and depicting what happened and why. It's a great place to begin a study of the Great Depression. I was surprised at how well Galbraith wrote, and his command of the subject. None of it is difficult to grasp, which is why it's a great place to begin.



3. I found this book captivating, in a "gallows humor" sort of way.
   
   Although written many years ago, and recounting events in the distant past, it should be required reading for anyone in the markets today. More specifically, it should have been required reading a year ago (mid 2007) for those invested in finance and property sectors.
   
   Whether the malaise in those sectors (some stocks down 90%) spreads eventually to the general indexes remains to be seen.
   
   Tony Loton, author --
   DON'T LOSE MONEY! (in the Stock Markets)
   Financial Trading Patterns



4. Given the recent turmoil in world financial markets, it is hardly surprising that, from the rubble, an army of economic pundits has arisen, replete with historical parallels and a cookbook of remedies for the mess. Being of a cynical disposition, I favor those pundits who reinforce my own certainties that perfidy, greed, speculation, lack of regulatory oversight and failed government policies are at fault for the current debacle. I found validation in "The Great Crash, 1929".
   
   John Kenneth Galbraith, is a "giant" in the field. In this book, he identified five salient weaknesses of the 1920s economy that appear to me to be strangely evocative of the current financial crises. These are: 1). Gross inequalities in income distribution, with a tiny fraction of the
   population owning the vast majority of the wealth. The level of CEO compensation nicely illustrates this point (it's nearly 350 times that of the average "prole"), 2). Flawed corporate structure, one in which, "American enterprise in the twenties had opened its hospitable arms to an exceptional number of promoters, grafters, swindlers, impostors and frauds". The analogy to the present is perhaps to hedge fund managers, short-sellers, leveraged traders, purveyors of derivatives and "sub-prime" mortgages and real estate speculators, some of whom appear to share these characteristics, 3). Bad banking structure, enabled, in part, by Congress rescinding Depression-era legislation separating commercial from investment banks and by allowing unregulated investment activity on a large scale. Other components extend to failure of the SEC to regulate mortgage instruments, "naked" short selling, government-mandated requirements for the use of "fair value accounting". I'm sure there are others., 4). "Dubious" state of foreign balance. Now (in a reverse of the situation in the 1920s), the US is the chief borrower nation, with the preponderance of debt held by foreign governments (chiefly Asian and increasingly Middle Eastern) and, 5). The poor state of economic intelligence. In the present crisis, I take "intelligence" to mean "smarts", rather than access to accurate and timely data. It might also be taken to mean "responsibility". An example of lack of "smarts" might be E. Stan O'Neal of Merrill Lynch who blandly asserted his lack of understanding of "derivatives" as an excuse for his firm's demise, while allowing their purchase and sale. Dick Fuld of Lehman is a nice illustration of lack of responsibility. His activities destroyed a perfectly goodfirm, yet, he still serves as Lehman CEO (note: the current Lehman is a 14 year-old company, spun off from American Express, so don't wax too nostalgic about the demise of a "150 year-old firm").
   
   Yes, it seems obvious that regulation will be required as, left to their own devices, the "masters of the universe" will continue to refine and evolve their penchant for making lots of money by devising new financial instruments, which will lie outside the latest regulatory umbrella. Yes, people will live beyond their means, if given the option and easy credit is an enabler. This all seems to be part of human nature. Yes, it's a mess. However, it is unlikely to be "a national disaster for the United States". It's just business. However, you never know...



5. I wish that I had purchased another book. This is not a good book at all

5 comments about The Wealth of Nations (Bantam Classics).

1. I had to buy this book for a class that I hated and almost couldn't force myself to read it. I had such a hard time with it and found it incredibly boring and confusing. I would never read this book for fun. Unfortunately it does talk about a lot about important things and I could sound like an educated person if I had read it but I just can't understand it. Maybe when I'm over 50 I'll be more interested since I might have a genuine interest in what the book talks about, instead of being forced to read it for a class that I hated so much.



2. I reread (more like re-scanned) Adam Smith's famous book, The Wealth of Nations. It is a fairly aggressive book based on its size with almost 1,000 pages of fairly fine print of which half of it is dedicated to the supply and demand of corn. But it is surprisingly readable and even interesting. And it is the basic textbook of all economics.
   
   Wealth is defined as production capability or what we might call GDP.
   
   I figure with a changing economy, it never hurts to brush up on the basics. We are in a period of sharp changes in supply and demand. It is important for business leaders to try to understand what impact this will have on them and their companies.
   
   One principle that Adam espouses is the division of labour.
   
   He also talks about principals, those are the people that supply the capital that is put to use by the agents (people who apply the capital). His view is that people should not do both, they should do one or the other. It is an interesting thought.
   
   He is very harsh on protectionism (as am I).
   
   I am not going to recommend reading it because the size is too daunting for many people. I am suggesting thinking of the changes in our economy and how to thrive with them.



3. Wealth of Nations by Adam Smith is a great read for anyone wanting to know the foundations of economics and how money works in our world. I listened to this downloadable book as an audiobook from Stratobooks.com while I commuted to and from work. I got through it in just a few days and it was less than 5 bucks.



4. Conquering Scarcity: (Smith's Dialectical Relationship to Marx?)?
   Adam Smith is certainly one of the greatest political philosophers in the modern tradition. Our world, as some have argued, is principally the byproduct of the system that Smith outlined in this classic work, together with a judicious mating of John Locke and Thomas Hobbes. The "Wealth of Nations," though the most well known of Smith's writings, is not representative of his entire system of thought, if he has a system: Some authors insist that there is a paradox in Smith's work, when considered in light of "The Theory of Moral Sentiments"? I do not know if this is the case, but the degree to which Smith's ideas have shaped our world cannot be questioned: If it were questioned in this forum, one would only have to point to the existence of this forum to show that Smith was right; the global structure of capitalism today and its development, which has been explored by thinkers after Smith is an undeniable fact. For these reasons, Adam Smith is, in my judgement, one of the most important thinkers in modernity, and he may well have a stake in shaping an arguably post-modern world: But that is not, perhaps, the last word.



5. This version is just too small for such a great book. No room to write interpretations or other side notes. Bought another one, so it has become my door stop for now; until someone offers me a price or simply asks to borrow it.

5 comments about When Genius Failed: The Rise and Fall of Long-Term Capital Management.

1. Not a light read, but a captivating one - in part reads like a horror story where you're dragged into a sequence of events both exciting in their nature and progression, and epic in their ultimate failure. I'm not a finance type, but Roger Lowenstein did a great job of explaining how the hedge fund operated, and the types of trades it was involved in. It certainly throws a bucket of cold water on Econometrics, and demonstrates that beyond a certain point, economics is as much of an art, as it is a science.



2. The book is a thorough account on what happened at LTCM. Absolutely fantastic writing skills. What I liked the most though is how Goldman came on top as usual :-) Interesting, hein? Goldman is amazing.



3. Does an excellent job of recounting the events and the people involved in the rise and fall of the hedge fund. The length of the novel is short enough to make it possible to read it in one go, the pace is fast enough, with none of the detours that authors are sometimes tempted to take (describing in excruciating and needless detail minutae that seem to serve no useful purpose other than that to fatten the book and make the tome appear more scholarly than it is). The author also does describe, in non technical terms, some of the financial instruments that were used by LCTM. These descriptions are by no means technical, and there is not a single formula in the entire book. Also, unlike some other authors, Lowenstein does not fall into the trap of describing the lifestyles of the protagonists in lurid detail. We do get a glimpse into how the main actors lived, ostentatious or not, but it never gets so involved so as to distract from the main purpose of the book, which is to describe the rise and fall of LCTM.
   
   What is also clear is that the author has a soft corner for Merriwhether, the brain and the soul behind LCTM. The Nobel laureates at LCTM come off as having too much faith in the mathematical certainty of their formulae, while the experienced traders at LCTM as also having drunk the kool-aid. These people, like Hillibrand, Haghani, and others believed so much in their skills and the correctness and certitude of the formulae that they staked their personal wealth on LCTM's success. Markets and investors do not always behave with mathematical preciseness, nor can their behavior be modeled and predicted using past performance or normal distributions (bell curves). Events can cause highly improbable events to turn into self-fulfilling prophecies. Markets are interconnected, and when things go bad, the correlation turns to one. Leverage by itself is not bad, provided liquidity is not a concern. You can be illiquid, and you can be leveraged, but not at the same time. These are just some of the lessons the author draws our attention to.
   
   One drawback listed by many reviewers of this book is that the book is not technical enough. Which is fair enough. However, it would be quite difficult to write a book that did justice to the twin objectives of recounting the events and history of LCTM as well providing enough technical details and background into the various theorems and intricacies of the financial instruments used by LCTM. Such a book would either run the risk of becomg very long, thus losing much of its intended audience, or become disjointed, with the narrative struggling to juggle between the characters, the plot, and the technical details. There are other highly rated books like 'Inventing Money' that are more technical in nature, and could be read in conjunction with 'When Genius Failed'.
   
   Some other books suggested:
   Inventing Money: The Story of Long-Term Capital Management and the Legends Behind It
   The Scam: Who Won, Who Lost, Who Got Away?
   The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron



4. One of the best stories about modern finance...this book must be read by everyone committing serious money into the markets. Written approximately 10 years ago, 10 years before the bankrupcy declaration by Lehman Brothers, "When Genius Failed" presents some timely lessons that should have been learned a decade ago...but weren't for some odd reason.
   
   #1 The issue of swaps: It is interesting that David Swenson of Yale is described here as inventing the first modern financial derivative--the swap. How ironic is it that Swenson makes no mention of investing in this toxic coolaid himself (in his books)? How ironic is it that losses in swaps were the #1 thing that brought down Long Term Capital...and all of Wall Street's titans were around to see it 10 years ago...and yet what are the financial derivatives bringing down companies like AIG today--the swap...You would have thought people would have learned! Avoid this crap!
   
   #2 Shame on John Reed from Citibank (he was Mr. Conservative, right?)and Alan Greenspan for opposing rules that would have required regulation and disclosure related to derivatives. In retrospect, this is absolutely nuts. Certainly, Citigroup is paying the price for its participation in these same markets now---how ironic that it would likely have really benefited by regulation it opposed.
   
   #3 It is of immense interest that Bear Sterns' Jim Cayne refused to participate with the LTCM bail out...leading other Wall Street firms to promise revenge...Well...look what happened 10 years later when Bear needed help...it was nowhere to be found.
   
   #4 It is shocking that Wall Street never learned the lesson of LTCM's failure: leverage + deritvatives equals big trouble. That is why we are experiencing this same pain today--ten years later. LTCM should have been allowed to go bankrupt 10 years ago...bringing the banks with it...nothing else would have forced upon them a good, conservative nature. Now, unfortunately, surgery is needed to cure the patient...or it may be too late....



5. An excellent read & indeed very relevant in today's' times when we see fiascos in the financial markets repeated almost every day. I expect another book from Roger Lowenstein soon on Bear Stearns, Lehman, Merrill Lynch & the state of financial markets (today). God Bless Wall Street & God Bless America! Hail Lowenstein!