3 comments about The Real Price of Everything: Rediscovering the Six Classics of Economics.

1. Despite being an economics/finance geek, who is a fan of Michael Lewis' previous work, especially Moneyball, I was debating whether to buy this. I have already read The Wealth of Nations, which makes up half of this huge book. It is nice to have such a collection of great works together though, and although the vast majority of the writing is just old copyright expired material you can get on the Internet for free, Lewis' commentary does add to it. In addition to being an accomplished writer, the author does have a masters in economics from the London School of Economics, and does have a knowledge of and a passion for the subject. So on the whole this is really intended for people who have an academic interest in the subject, but at the very least you will have a really big book on your shelf to impress your friends.



2. This is a complicated book because of its length and
   technical verbiage in economics. The outline includes
   lengthy dissertations by 5 or more writers in foundational
   economic literature and reporting. These are:
   
   1776: The Wealth of Nations by Adam Smith
   
   1798: An Essay on the Principle of Population
   by Thomas Malthus
   
   1817: Principles of Political Economy and Taxation
   by David Ricardo
   
   1899: The Theory of the Leisure Class: An Economic Study of Institutions by Thorstein Veblen
   
   1936: The General Theory of Employment, Interest, and Money
   by John Maynard Keynes
   
   There is an extensive development of macroeconomic theory
   dealing with the GNP, as well as the microeconomics pertinent
   to everything human beings do. The Wealth of Nations is the
   classic by Adam Smith. It espouses the theory that human
   beings are driven by self-interest & that they play a role
   in improving the market. The Mercantilists of the
   time believed that the wealth of a nation began with trade
   surpluses. The division of labor leads to greater improvement, dexterity, time saving and mechanization. These concepts
   permeate the modern patent laws around the world. The inherent
   difficulty in weighing metals leads to the utilization of coins
   and other money in the form of paper, bonds etc. Value is
   defined in terms of its use in exchange. The real price is
   a function of the toil involved in the manufacture or assembly
   of a product.
   
   Malthus believed that increasing the price of a stock
   necessarily increased the price of provisions.
   David Ricardo believed that population doubled every 25 years
   and that capital doubled in less than 25 years or it lagged behind. Therefore, wages increased because the demand for labor
   was greater than its supply. The value of a
   commodity was a function of the amount of labor expended in
   producing it. The quantity of labor with respect to commodity
   production is modified by the employment of machinery, fixed
   and durable capital.
   
   Thorstein Vebleu believed that wealth increments lead to a
   leisure class developing in structure and function.
   At some point, the leisure class matures and it becomes exempt
   from the idea of thrift and savings.
   
   Overall, the book explains many of the concepts behind money and
   wealth. The downside is the 1400 pages or so to accomplish this
   monumental task. This would be an excellent purchase for students
   of the economic sciences, government, politics, world history and
   news reporting. The $30 price tag is a solid value for the content contained within this massive text.



3. This book is the verbatim texts of several classics. That's sort of cool, but to be honest, reading 18th century prose is slow. Very, very slow...
   
   Michael Lewis adds some commentary. Unfortunately, that's only a few pages per book. What is there is generally quite good, but it is far too little. In particular, it would have been interesting to see comments on the actual texts, as opposed to general comments on the authors' lives.
   
   If you really want to read all the classics, it's convenient to have them all in one place. Otherwise, you should probably pass.

5 comments about The Misbehavior of Markets: A Fractal View of Risk, Ruin & Reward.

1. Mandelbrot & Hudson attack some popular thoughts on how financial markets work and try to set up a model to replace them.
   
   There are two main focuses of attacks: that returns follow a normal or Gaussian distribution and that future returns are independent of past returns. The attacks are effective - the authors show that these are false and therefore any existing model based on them is doomed.
   
   Next, the authors try to argue that returns follow a "multifractal" - a fractal both in value and a fractal in time. Using this model, they can create pictures of financial returns that are difficult for people to differentiate from real financial returns.
   
   If the pictures were easily distinguishable, it would disprove their model. However, the converse is not true. Just because the pictures are indistinguishable, it does not mean that the model is correct. In fact, the authors are hard pressed to tell the reader how to build a model for a particular financial market and show zero results in using the model to predict a financial market (which is the true measure of the value of a model).
   
   To conclude, the book does a good job of dispelling some myths. However, it's argument for multifractals is that they are worthy of consideration of future research. And given that they cannot even show how to build a multifractal to model a particular market, it is doubtful that they are worth considering at all.



2. Mandelbrot is quite a character. I admire the guy's independence, his creativity, his chutzpah and all his achievements in the world of mathematics. However, this book is an intellectual rat hole. This is the type of book you could read and immediately feel smarter than those silly practitioners who have to make do with bad models, like the Gaussian and the CAPM. But the fact of the matter is, Gaussians and CAPM are a good way to go. A good fraction of modern life is based on these models. Anyone who has worked with the actual financial data for a few seconds will realize they're baloney (at least compared to models like Maxwells Equations), but they still are quite useful. Mandelbrot makes it sound as if some lone genius might some day come up with a mathematically perfect distribution which works better than a Gaussian and steal all the MBA's money. This is not a useful way of thinking about things, to say the least. Mandelbrot doesn't point us towards the useful ways of thinking about such things.
   
   While Mandelbrot stands at one fat tail of his statistical distribution, this book is somewhere in the opposite tail. Don't waste your time.



3. First, a warning. This is not a book that's going to teach you how to predict the markets. If you're looking for that kind of book, look elsewhere. In fact, if you're looking to learn about trading or investing in the markets, this is probably not a good book for you. This is not an overly practical book in terms of providing any methods or techniques for use in your day to day trading.
   
   The (Mis)Behavior of Markets is much more along the lines of a scholarly discussion of prices. For those with a desire to understand how prices move, this is a good book. In particular, it's great for understanding why it is that even the supposedly best and brightest (like Long-Term Capital Management - LTCM) could get it so wrong. In short, much of what university economics and finance departments have been teaching for years is at best misleading and at worst dangerous.
   
   I must state for the record that I have long held a less than aggreeable view toward efficient market theory, Black-Scholes, random walk, and all of that stuff. It goes back to my days as an undergraduate finance student when I just intuitively didn't believe what I was being told and often saw the major flaws. When I started working in the markets I saw first hand how ridiculous many of the underlying assumptions behind classic financial theory really are.
   
   In The (Mis)Behavior of Markets Mandebrot takes on classic financial theory in a very straightfoward manner. He is extremely critical of the way economic (and by extension financial) theory has been developed and moved forward. He spends a fair amount of time explaining how the now classic theories of price movements came about, which I found interesting since I'm a bit of a history buff.
   
   From what I understand, many of the things that I used to gripe about with my professors as being major problems with classic finance have finally been recognized in recent years by academia as just that. This from a professor friend of mine. I don't know whether or not things have changed in what's being taught, though. My impression is not so much, which to me seems a major disservice.
   
   The thing I found most interesting in the book was how all these theories have been torn apart, not just recently, but for decades. Mandelbrot and others figured out very early on that price changes do not conform to a normal bell shaped distribution. They also figured out that price changes are not independent (among other things). Those are two major capstones underlying efficient market and random walk theories and the pricing of options using Black-Scholes.
   
   The thing that really irks me is that none of these critiques were ever presented to me in the classroom. We were just taught the same stuff that had been taught for years and years with no perspective on how research was showing major problems.
   
   The biggest thing Mandelbrot focuses on in terms of the implications of all the errorenous assumptions is the implied risk. He points out that things like the Crash in 1987 and other market shocks in recent years were also so improbable as to be beyond any reasonable expectation of classical theory. Given how many securities are priced using models based on that classical foundation, and how the commonly employed Value at Risk (VAR) calculations are similarly based, you can see how this is a major problem. Investors and institutions have been taking much more risk than they thought. This is something which once again became readily apparent last summer as the credit crises exploded.
   
   Mandlebrot, naturally, presents a different way of looking at price movement - one founded in his fractal theories. He readily admits, however, that it is still early in its development. Much more work and research needs to be done. One cannot use anything he presents in the book to help forecast prices, though it can help to understand better how prices move, and thus by extension the risk of financial assets, which is a benefit of potentially enormous value on its own.
   
   To be honest, the discussion of the fractals and such was the least interesting part of the book for me. That could just be my practitioner's perspective, though. Others might be much more facinated. I personally am far from convinced that mathematics is ever going to be suitably useful in price forecasting the way people seem to think it will.
   
   All in all, I would call The (Mis)Behavior of Markets a good read. It's informative and thought provoking, but doesn't bog the reader down in a gread deal of math and complexity (there's an appendix for those inclined in that direction). If you are at all intellectually curious about the financial markets, this is definitely a book worth reading.



4. To begin, I am not a mathematician or investor, however, this book opened the world of those topics to me in an understandable way. The author is an out-of-thebox thinker who clearly explained the topic well, causing me to investigate the ideas more.



5. Mandelbrot describes some problems with financial models that are designed to provide approximations of things that can't be perfectly modeled. He pretends that pointing out the dangers of relying too much on imperfect approximations shows some brilliant insight. But mostly he's just translating ideas that are understood by many experts into language that can be understood by laymen who are unlikely to get much value out of studying those ideas.
   His list of "ten heresies" is arrogantly misnamed. Sure, there are some prestigious people whose overconfidence in financial models leads them to beliefs that are different from his "heresies", but those "heresies" are closer to orthodoxies than they are to heresies.
   His denial of the equity premium puzzle is fairly heretical, but his argument there is fairly cryptic, and relies on suspicious and poorly specified claims about risk.
   He says market timing works, but the strategy he vaguely hints at requires faster reaction times than are likely to be achieved by the kind of investor this book seems aimed at.
   His use of fractals doesn't have any apparent value.
   Mandelbrot is primarily a mathematician with limited interest in understanding how markets work. One clear example is his mention of a time when Magellan "was still a small fund, too small for any detractors to argue that its size alone gave it a competitive edge". Any informed person should know that's completely backward - larger funds have a clear disadvantage because they are limited to trading the most liquid investments.
   Another example of a careless mistake is when he claims the evidence suggests basketball players have hot streaks, seemingly unaware that Tversky and others have largely debunked that idea.

5 comments about Multi-Family Millions: How Anyone Can Reposition Apartments for Big Profits.

1. I have been an investor and rehabbing for several years with single and dual family homes. During this time I have read several books on Multi Family Apartment ownership. For some time I have wanted to move on to larger units but was concerned that I didn't have the knowledge to move forward. Each time I finished reading the other books I came away still feeling I needed more practical information to move forward. After reading Dave's book I came away feeling it's time to make the move (to take action). I have now started putting my team together following the advise Dave outlines in this book. So far it is working great.



2. I love this book! Dave spoke at my REI club a few years ago and I went to the 1 day seminar that followed. Dave was able to answer all my questions on the subject of owning multi-families (namely dup, tri, and quadplexes).
   I was afraid to get out of my comfort zone (single families) but when dave laid out how he felt the same fear that I did and truthfully...YOU are probably feeling I thought...F%&* it!!
   This book is a definite short cut for you. And it's a steal!! What does it cost? $15-$20 bucks!!
   Even though I regularly buy and sell multi-families and think I know it all, Dave's book has tons of chunks of meat and potatoes for me to still go through. It's works really great with the way the market is and real estate is available for pennies on the dollar.



3. This book is well written and very informative. It also got me excited about the possibilities of multi-family investing. As with most real estate investing books, it gives you enough information to get yourself in trouble if you are not careful, but there is a lot of good information that can be used as a stepping stone to get to your investment goals.



4. i have been a builder for the last 10 yrs. i only i would have known about this information simplified the way it is, i would not been working for 80 hrs., a week, with the economy the way it is right now, what we want is cash flow, and this is the machine to do it. thanks for all the info.



5. This was a well written and informative book. It included many examples of forms and real world usable information. We just purchased a 65 unit complex and the book was a good mentor.

5 comments about Common Wealth: Economics for a Crowded Planet.

1. An excellent book by a truly authoritative author, this book even proposes solutions to many of the world-wide problems.



2. IT IS A VERY INTERESTING BOOK ESPECIALLY BECAUSE IT DEALS WITH AN IMPORTANT AND VERY RECENT ISSUE: SUSTAINABLE DEVELOPMENT. IT IS NOT EASY TO FIND BIBLIOGRAPHY ON THAT.



3. This was a complete and total waste of my time. I actually think I may be dumber as a result of reading it. There are virtually no facts or studies cited in this book. He attempts to make historical references to provide basis to some of his opinions (that he presents more or less as if they are facts) but the causation is never clear. I think a book of this type needs to be written, but it obviously needs to be written by someone other than Jeffrey Sachs. He is just smart enough to be dangerous.



4. I found this book to be an excellent read. If our nation and world would use some of the ideas presented in the book, we would have a much better planet. I plan on doing what I can to better our world, small steps, one day at a time.



5. This wide ranging analysis of the world today and its future options should be a 'must read' at the highest level of all government agencies.
   Any scathing attack on the deficiencies of the 2008 US regime are countered by offering workable opportunities to repair the damage and in particular to allow the United States to become a more believable power for good and to gain back some respect that the US once commanded with the rest of the world in the middle of the last century.

5 comments about The Pre-Foreclosure Property Investor's Kit: How to Make Money Buying Distressed Real Estate -- Before the Public Auction.

1. The information included in this book has made my job much easier and has expanded my knowledge base and expertise. The organization I have derived from it is most valuable.



2. This is an excellent book by Thomas as he thoroughly takes you through the process of purchasing an investment property. He provides a wealth of resources on nearly every aspect of investing by listing websites and addresses.
   
   His forms are great for providing you with an idea for approaching home owners. However, the tone of the letters are some what dismissive--but that's just my opinion.
   
   The only area that needs enhancing is providing one with an idea as to estimate value in the property. He does not provide as much detail as others (i.e., Steve Berges "The Complete Guide to Real Estate Finance for Investment Properties"). With that said, it is an excellent resource and I highly recommend it.



3. Excellent book. Very detailed. Absolutely convincded me that I wanted nothing to with this business. The author demonstrates that it is difficult and tricky business,potentially very lucrative, but not a get rich quick scheme. Since I would like to get rich without this much work, I'll pass on this method. And I truly thank this book for steering me right. I take off one star only for the author's occasional right wing rants. But I guess he's entitled. He worked very hard to get rich, and he shares his secrets openly in an inexpensive book, rather than trying to hoodwink you out of thousands by means of an infomercial. If he's got a few screwball political ideas, God bless him.



4. I bought this book and then went to some training in Tennessee and was impressed with all the detail given on how to do a succesfull short sale. I have then applied these techniques in my real estate business to give me one more tool in my arsenal to make money.
   Sandy



5. I think this is a great purchase... Just got it and I like the way the lessons are so far

5 comments about Fooling Some of the People All of the Time: A Long Short Story.

1. I like reading books about corporate collapses (eg about Enron and Worldcom), and this book, whilst not about a corporate collapse, details the author's extensive investigation into the accounting and other practices of Allied Capital. Both as a story and technically, this is an exciting book.



2. Fooling Some of the People All of the Time catalogs the incredible events that followed the author's fast rising hedge fund and the investment community that attacked him after sticking his neck out in a speech. The investment community attached to protect its interests, which provides a good lesson in today's financial crisis. The book gives an informative look at the ins and outs of wall street, and the lengths people there will go to attack companies and individuals who attempt to uncover untoward behavior. It's a very interesting, if detailed, read and necessarily so.
   
   As an investor and fan of the financial markets, I don't typically read psychology books, but a colleague passed along The Emotional Intelligence Quick Book to me this week when we were discussing the chaos that has befallen the financial markets of late. I devoured that book! It's really great at revealing the role emotions play in ANY decision you make, and I'm a smarter investor for having read it.



3. Very boring to read. Explains at length reasoning that leads to short sales. Unless short-selling is of particular interest to you or, if you face an imminent encounter with SEC, this book is unlikely to be of any value to you.



4. David Einhorn's book is about how deceptive and deceiving accounting can be, and how the government can foster corrupt enterprises. He does a particularly good job of showing how his firm (and others) discovers accounting discrepencies, and an important lesson is that one cannot take for granted financial statement numbers "blessed" by accounting firms.
   
   Unfortunately, the book becomes incredibly tedious to read. He actually reviews too much data--reveals too much information here--more than this typically voracious and curious reader could even tolerate. The tedium may represent how incredibly thorough (OCD) Mr. Einhorn is about his work--or it may reveal how much the underlying story has actually consumed him/gotten under his skin.
   
   Regardless, it is ironic that his own hedge fund is very secretive and unrevealing about its own performance. For example, go to his web site and try and find performance information about his funds--not possible! It is interesting that he periodically comments about the top notch performance of his funds in the book--but no summary of audited performance data are provided to evaluate his true performance--interesting given his pleas for more transparant data published by publicly traded companies. Oh well, can't have it all!



5. This is an interesting story of a hedge fund manager who becomes obsessed with a short position in a company that seems, at a minimum, a little shady. None of the characters in the book are likeable and at the end of the book it's not clear if Einhorn is making a mountain out of a molehill or not. But it is a fascinating detailed look at an ugly mix of management greed, an investor's ego and government waste and intimidation.

5 comments about Common Stocks and Uncommon Profits and Other Writings (Wiley Investment Classics).

1. I bought this book on the belief it could be helpful since it is widely acclaimed, but I discovered that is far from being an "investor's bible"
   
   First. It spend too many pages (about 30 or more) in "Family stories and affairs" that is a pure "torture" and absolutely useless to the reader eager to learn about investement strategies...This could be good maybe on a Fisher Bio book, but not here...I bet that while you are reading this part you will end up doing exactly like me...just skipping many of those pages.
   Then...The book lost itself on many "stories" about many companies and the market in general without any useful insights or which analytical/dynamical approaches were followed.
   I think it deserves 2 stars for the effort, but nothing more...
   
   To me, was absolutely boring. Maybe I didn't understand the book "purpose", I don't know...But while reading, I started to get bored and skipped many pages...Finally, I just quit reading it before finishing...Got nothing from it.
   I don't really know why this book is so acclaimed...And I'm wondering why Buffett says that He's a Fisher follower after reading this book...What He could have learned from this reading?
   Maybe to buy and hold a good stock over the years? I believe this kind of investing style requires any book to learn but just patience and following fashions and trends, like those who bought Apple Computer stock when the iPod frenzy was launched; by just being patient any investor would have made 5 times his/her money in these last years, The same is true for Research In Motion and many more companies that are living a great momentum in their products today.
   But it's just a matter of following the fashions of "hot" products rather than any sort of stock market skill and this could be really dangerous. Think of investors that today are buying like nuts solar tech stocks.
   
   In my opinion...The Intelligent Investor by Ben Graham is the world's best book on investing and a light-year far a better book than this one.



2. I had read other reviews of this book that gave it high marks. I have no idea why. The book is nothing but generalities or suggestions the average investor can not use. For example, his point 10 in evaluating a company is: How good are the company's cost analysis and accounting controls? Then he goes on to say that the average investor has no idea. Brilliant! If you want to read a good book, get "The Intelligent Investor" by Benjemin Graham instead. Leave this one on the shelf.



3. This is an outstanding outline of the philosophy for long-term investing. The text is somewhat abstract and difficult to read at times, but it is very insightful and well worth the effort. I generally prefer this book over Ben Graham's work.



4. This book makes me want to finish up any other project I'm currently working on so I can spend my free time finding good investments. Excellent book, not to mention it's recommended by Warren Buffett.
   
   I was disappointed, however, that there wasn't an Unabridged Audio CD version. And the reader of the abridged audio CD is rather boring, but overall I'm very glad I found this book.



5. Common stocks and uncommon profits explained in a very common sense. I am sure back in the 50's the "15 points" explained in this book was a great deal but now in 2000's it has very little value although the points are still perfectly valid. My biggest problem with this book was ,however, that it was too boring to read. The sentences were too long (3-4 lines) all connected with "by which", "in which" etc. I couldn't read more then 3 pages at a time. I often said "come on cut to the chase!" while reading. Anyway after my second attempt to finish the book at around 2/3 the way to the end, I gave up and put it in the shelf.

5 comments about Rich Dad's Increase Your Financial IQ: Get Smarter with Your Money (Rich Dad's).

1. This was an excellent book. The book has taught me a lot about the true state of the Union. Robert tells you what the main stream media and the government will not admit. Both the Democrates and the Republican party have really messed things up for you and I, in this beloved country of ours. From reading Robert's book you would get the idea that the "Central Banks" both foreign and domestic are running our puppet government. The average citizen has been sold out by the rich and the greedy. God bless and protect us from the storms both now and yet to come!



2. Another solid book. I read all his books and they are all motivational. You learn 50% new stuff, and 50% is just relaying the foundation. But it helps to stay submerged in his stuff to motivate yourself into taking action!



3. I have to say, I've listened to quite a few audio books and read a few books by Robert Kiyosaki. I have to say I was very impressed with this one. I really think this one does a really good job at getting you to see things a different way. I especially like how he talks about expanding your means (as he has in the past) but this time he actually goes in and shows you how he would budget for a surplus and you get to actually see exactly what he means. He has more specific examples, rather than just the concepts and ideas by themeseleves.
   He explains why and how he's both a capitalist and a socialist, and he clearly explains why you can't simply blame one side of the political spectrum, and gives examples of things that both republican and democratic presidents have done which ends up hurting those who save.
   I think that if you were to read one Robert Kiyosaki book, this would be the one, it seems like he really put everything he's ever taught together in a way that really makes a lot of sense. Why savers lose, the increase of the money supply, the need for financial education, why most politicians don't know how to handle money, why most businessmen do the very wrong thing and cut spending on advertising during a reccession, when they should be looking to expand their means, all about your brain and how you learn best, and what to do about it and a whole lot more.
   
   It was also interesting to see him forcast before this book was completely released in March, that we most likely have just reached the edge of the storm, and things could get a lot worse. October clearly may have been a significant part. Kiyosaki has been right on about a lot of things.
   
   Going into debt isn't bad, in fact, it can be very good if you know completely what you are doing. However, as they say "a litle knowledge is dangerous" Don't stop at just this book, but make a plan, simulate the real thing and then start small and take the right managable calculated risks, and you can build wealth and get rich.
   
   I believe that this book will dramatically shorten the learning process, and may save you a lot of valuable time and money that you would have paid through learning from the mistakes that you would otherwize made.



4. I became very excited after reading Increase Your Financial IQ on an eight hour plane trip. We were closing on a 229 unit apartment at the time of the reading. I purchased 22 books, one for each of my investors. Robert explains in an easy-to-read and understandable style the importance of hedging your portfolio in to real estate and the concept of leverage. Two thumbs up. I give this book my highest recommendation.



5. I read his first book, then this one the next week. It's a lot of the same concepts written in a different context. If you have read one of his books, I'd suggest getting one from another author.

5 comments about Lean Thinking : Banish Waste and Create Wealth in Your Corporation, Revised and Updated.

1. Lean is a specific management technique to make an organization more efficient (and a private sector company more profitable). This book is a well written introduction to the subject. The authors, James Womack and Daniel Jones, provide lots of examples to illustrate their basic points. Thus, this is a very useful introduction to the subject, for those of us who are not experts on this matter.
   
   To start at the beginning. . . . The enemy is "Muda," a Japanese word that means "waste," in all of its manifestations. Lean is an approach to reducing Muda. Pie in the sky? Toyota is one of the pioneers in this movement, and it is now the # 1 automaker in the world--so, maybe, we ought to pay some attention to the concept. As the authors note (Page 15): ". . .Muda is everywhere." And the antidote to muda is lean.
   
   The Introduction itself does a nice job of laying out the key concepts of Lean. Then, each part of the book builds on that foundation. Key points: (1) Value. Value is defined by the ultimate customer. The problem? Corporations and other organizations often think that they know best and do not really understand what the end user wishes as value. As the authors note (Page 19): "Lean thinking therefore must start with a conscious attempt to precisely define value in terms of specific products with specific capabilities offered at specific prices through as dialogue with specific customers." (2) The Value Stream. This is the actions needed to bring (Page 19) ". . .a specific product (whether a good or a service. . .) through the three critical management tasks of any business." (3) Flow. Outline the step-by-step process by which goods and services are delivered and identify muda, so that waste can be reduced/eliminated. (4) Pull. Develop a process such that customers pull the product from the source/supplier. (5) Perfection. Keep working on improving the product/output, by incremental changes leading to further reduction of muda.
   
   Examples abound. Think of the miserable experience these days of flying from place to another. Muda is everywhere (see the discussion on pages 32-35).
   
   Part I lays out the lean principles in much more detail (Value through Perfection, steps 1 through 5 already summarized). Part II explores lean in more detail (including comparing lean versus the German approach). And so on.
   
   Want to know about lean? This is a pretty good introduction, as far as I can tell, for a lay audience. I'm not an expert, but I think that I have learned quite a bit of value from reading this work.



2. I was fortunate enough to participate in the Pratt & Whitney lean transformation described in Lean Thinking.
   
   While it is not a "how to" book, it does a good job of describing the lean initiatives undertaken.
   
   This book is a classic "lean must read."



3. The only way to be competitive in the world marketplace is to be much more efficient. In other words "lean and mean." Efficient at engineering, efficient at manufacturing and efficient at meeting/exceeding customer expectations are all keys to becoming more competitive.
   
   This book and their Machine that Changed the World are good resources for manufacturing facilities more lean. And...lean thinking leads to more lean thinking.
   
   Using the Toyota system as a guide, Womack and Jones address how companies can eliminate waste and increase profits. They write:
   
   "Our earnest advice to lean firms today is simple: To hell with your competitors; compete against perfection by identifying all activities that are muda and eliminating them. This is absolute rather than a relative standard which can provide the essential North Star for any organization."
   
   Well written with many telling examples. Recommended!
   
   The Re-Discovery of Common Sense: A Guide to: The Lost Art of Critical Thinking



4. This book is a very good introduction to "lean manufacturing". I would say it is aimed at managers or other interested people in implementing lean manufacturing in their organizations. It is a perfect book to gain adepts for the lean cause, so if you are finding resistance in your organization to implement it, you could give out some copies of this book.
   
   This book is more a general reading book (basics & benefits, resistance you might encounter, etc.) than a deep study or detailed guide. If you need deeper knowledge of the different tools, more specific applications or more detail on how to apply them, you will require other literature.
   
   Another introduction to the subject is a novel called The Gold Mine: A Novel of Lean Turnaround, both books address the topic highlighting different key aspects of lean, so reading both gives you probably a broader perspective. The gold mine goes a little deeper into the subjects and its emphasis on key concepts is very appealing.



5. Excellent reading for an explanation of Lean from its history through a vision of what is to become with several well known companies as examples in implementation.
   
   I hear the myth about Lean vs. union shops a lot, this book should dispel the rumor that Lean = job loss.

5 comments about The General Theory of Employment, Interest, and Money (Great Minds Series).

1. John Maynard Keynes is the collectivist's savior. Finally, the welfare statist thinks, someone who actually makes my ideas sound good to economists. Unfortunately, Keynes's theory is nothing new. It should be incredibly obvious to any non-professional that if a large entity (government) decides to spend a lot of money over a short period of time, then in the short term there will be very pleasurable effects. In the long term, however, a large sum of money spent by the government will have very harmful effects, distorting the price system and creating inflation, whereas a large sum of money spent by a private entity will have a sustained benefit on the economy.



2. Keynes presented a generalization of neoclassical theory.Keynes starts the GT in chapter 2 where he analyzes the neoclassical theory of the labor market.He notes that the most advanced technical treatmant was presented by Pigou in his 1933 book,The Theory of Unemployment.Keynes demonstrates in the appendix to chapter 19 that Pigou's model of his theory is a special case of Keynes's general model developed in chapters 20 and 21.The primary result of neoclassical theory is that an optimum result (full employment)is obtained in the aggregate labor market if the aggregated real wage(w/p) equals the marginal product of labor(mpl) derived from an aggregated production function(O= phi(N)).This is expressed as w/p=mpl,where w is the money wage,p is the price level,and mpl is the aggregated marginal product of labor.In chapters 20 and 21 Keynes presented his mathematical analysis.This leads to his generalization of the quantity theory's equation of exchange,MV=PO,to incorporate uncertainty and the speculative demand for money besides risk and the transactions demand for money.There are two such generalizations.Chapter 20 analyzes the labor market and the commodity market.Mathematically,there are two ways of expressing Keynes's first generalization in chapter 20-w/p=mpl/ep or the more convenient w/p=mpl/(mpc+mpi).Unless the elasticity ep=1(ep can range from 0 to 1) or the mpc + mpi=<1,the RHS of both equations will rise .This requires that the money wage also rise.Neoclassical theory requires that the money wage fall.The condition that the elasticity ep equal 1 means the economy is operating on the boundary of the aggregate production possibilities function curve because the labor market clearing condition,w/p=mpl, is an economically efficient outcome.It is thus allocatively efficient and productively efficient.
   
   
   
   
   
   In chapter 21,Keynes presents his generalization of the neoclassical equation of exchange with the money market added to the labor and commodity markets.The mathematical generalization now becomes w/p=mpl/e,where e is the elasticity that"... measures the response of money prices to the quantity of money in an aggregated economy"(GT,p.305-306).Unless e=1,where e can range between 0 and 1 ,as implicitly assumed by neoclassical economists,the RHS of the above equation will rise and it will be impossible for labor,in the aggregate, to cut its money wage as claimed by neoclassical theory in order to reduce unemployment.Again,the money wage will have to rise.
   
   
   
   The final point that needs to be cleared up is that Keynes's aggregate supply function is correctly specified and analyzed mathematically in chapter 20 on p.283 and in a footnote on pp.55-56 of the GT.The reader must be able to apply simple integration to Keynes's derivatives.I give the steps below:
   
   
   
   Go to footnote 1 on p.283 of the GT.Keynes defined P to be expected economic profit.The second line from the bottom of this footnote reads as " = delta P ", which is the same as" = dP".That should actually be " = delta P w subscript" due to either (a) a typographical error made by the printer in the GT or (b) because Keynes felt that it was obvious,since he divided D=Z through by w,to get Dw subscript = Zw subscript,which means that you must divide P by w.P is AUTOMATICALLY DEFINED IN TERMS OF WAGE UNITS.Pw subscript is equal to Dw subscript-N.Thus dP(or dPw subscript)=d(Dw subscript - N) =dDw subscript -dN.Simple integration gives the following result- Pw subscript=Dw subscript-N .Divide through by w and you obtain P=D-wN.Add wN to both sides.You get P+wN=D=pO or Z =D.Z=P+wN.w is the money wage.N is aggregate employment.p is the expected price level.O is real output,which is a function of N.D,the expected aggregate demand function,is thus equal to expected total revenue.Z,the expected aggregate supply function,is equal to total variable cost plus expected economic profit.
   
   The same analysis and result is contained in footnote 2 on pp.55-56 of the GT.Keynes defines the derivative dZw subscript/dN=dphi(N)/dN =phi'(N)=1,where you use "d" instead of " delta " notation used by Keynes.Integrate to obtain Z=wN + C,where C is a constant of integration,after you divide through by w.We know that D=Z by definition and that D=pO from chapter 20.We get wN +C=pO or C=pO-wN once we subtract wN from both sides.By definition,C must be equal to actual profit if p is an actual price and expected profit if p is an expected price.Of course,if P=0,then you get Z=wN = total variable cost.(This is the case of constant returns to labor.Note that Keynes covered this case explicitly at the top of p.284, as well as on p.306 of the GT ,in chapter 21.)This,of course is the mistake that Don Patinkin made continuously from 1976-1989 in 3 books and 5 articles-failing to consider that Z is linear in both the diminishing returns and constant returns to labor cases.Of course,in the case of constant returns to labor,you would get a linear 45 degree cross representing the aggregate supply curve.The same mistake is made by all Post Keynesian economists like Sydney Weintraub, Paul Davidson,Douglas Vickers,Jan Kregel, Victoria Chick,Nevile,Skott and Dutt,etc.They fail to consider that Keynes worked with both cases, diminishing returns to labor as well as constant returns to labor,in his microeconomic analysis contained in chapters 20 and 21 of the GT.It is not surprising that the Post Keynesians can not deal with the technical analysis contained in chapters 20 and 21 of the GT and expressed by Keynes in the form of elasticities.Instead,they build their analysis on the claims of a mathematically illiterate economist named Dennis Robertson.It was Robertson who claimed that Keynes's theory of effective demand(D-Z analysis)was contained in chapter 3 of the GT.All Post Keynesians base their work on the assumption that Robertson was correct.Post Keynesians also confuse the D=Z locus,the aggregate supply curve,with Z,the aggregate supply function.All of these errors can be traced back to the original errors made by Dennis Robertson in correspondence with Keynes in Feb.-Mar.,1935 about the first 17 chapters of the GT.Keynes told Robertson very clearly that the anaysis of his D-Z model was in a chapter called the Employment Function.Chapter 20 of the GT is titled," The Employment Function ".After seventy years it is time for economists to read this chapter upon which KEYNES SAID EVERYTHING DEPENDS.
   The reason why ed <1 ep <1,e <1, and mpc+mpi<=1 is that the decision to invest in long lived durable capital goods ,within an economic environment of technological and financial change,advance,and innovation,thus creating the problem of technological obsolescence,is made under conditions of Keynesian uncertainty or Ellsbergian ambiguity.Neoclassical theory postulates that there is no uncertainty or ambiguity,only risk ,which is universally represented as the standard deviation of a normal probability distribution.This means that aggregate investment expenditure will not be erratic,unstable,and insufficient over time.Involuntary unemployment can't result
   Keynes argues,as does Daniel Ellsberg implicitly,that the assumption of normality is a special case.Hence ,Keynes's generalization that covers ambiguity and/or uncertainty.This means that aggregate investment will be erratic,unstable,unpredictable,and insufficient over time.Involuntary unemployment will result.



3. This version is virtually unreadable, due to its terrible formatting, which clearly no one bothered to even glance at after some kind of machine translation from another format.



4. This book is a lesson in garbage in, garbage out. Keynes starts with numerous false assumptions, and follows them to their false conclusions. Keynes has been proven wrong time and again, not only through the texts of much better economic writers (Hayek, Rothbard, Mises), but also through the plain facts of history.
   
   Keynes' book reads like through the looking glass, where down is up, and everyone is drunk at a mad tea party. Keynes' ideas are precisely what will (and already have) lead society to economic failure and misery. The current financial crisis is only the latest in examples of why Keynes was wrong.



5. The version of Keynes' "The General Theory of Employment, Interest and Money" published by Signalman Publishing is the best one for the Kindle because it is specially formatted for easy navigation using your Kindle. Students will especially appreciate using this with your Kindle because you don't have to read it straight through. You can do word lookup and also use the hyperlinked Table of Contents.