5 comments about Petrostate: Putin, Power, and the New Russia.

1. As a student of Russian energy markets, I can confidently say that this book is rife with factual errors. Simple things like calling Iran one of the top gas exporters in the world (Iran doesn't export gas at all, it imports it, though Iran does have some of the largest gas reserves in the world); claiming that liquefied natural gas (LNG) often needs long-term contracts of "two years" to sell (usually needs contracts of 10-20 years); contending that OPEC regulated the oil market through production quotas from its founding in 1960 (the production quota system wasn't formally instituted until 1986-1987); etc. The conclusions that Goldman draws from his analysis are largely correct because he knows Russia well, but a lot of the (incorrect) detail he includes demonstrates an interested observer's - not an expert's - understanding of energy markets. If you are an interested observer, go ahead and buy this book. If you are a researcher, you should certainly corroborate the facts in this book.
   
   Overall, the book is filled with detail, most of it correct but some not. I certainly learned something from reading it, things that had slipped under the radar, but I am not convinced that one should trust Marshall Goldman's grasp of energy markets.



2. Goldman's book, Petrostate was somewhat interesting and shed some light on the complexity of business and energy in Russia. His research and references were undeniable but at times (not to his fault) difficult to follow because of the many "smoke and mirrors" corporate structures of many Russian companies and individuals based there. The government is layered with backscratching which he points out brilliantly throughout.
   
   Overall, the book gave me a better understanding of business in Russia and the size and scope of their global position in energy. Good read.



3. The book opens with the sentence "Russia once again an energy superpower and that is exactly what the book is about.
   
   Russia was the most important non-American producer at the start of the 20th century, it was a very important producer during the Cold War years and it lost it completely in the break up of the Soviet Union.
   
   After the desatrous privatisation under Jeltzin the industry was in tatters. Goldman describes clearly and with good analytical depth how under Putin the country slowly got its grip on its most important natural resource back. Needless to say that the methods used were heavy handed and certainly in a general sense morally and legally questionable. This is not new and the saga continues as we read in the news paper every day ( see e.g. the deleopments around the BP-TNK joint venture).
   
   Goldman also analyzes the role the energy industry plays in the overall aim of Russia to be an important power once again. In particular Europeans should watch this with intensity as they are more and omore dependent on Russia for their energy, in particular gas.
   
   In all, a good, readable and enjoyable analysis. The 5th star is missing for the technical flaws pointed out correctly bey another reviewer. Not hurting the conclusions but a bit sloppy indeed.



4. "Petrostate" provides good insights into Russia's comeback after its late 1990s nadir, as well as an understanding of its economic-political strategies.
   
   Russia regained its place as the world's largest oil producer in 2007; energy generates about 30% of Russia's GDP and 60% of its exports. Russia is a major energy provider to Europe and the U.S. The U.S. buys $10 billion of Russian petroleum, LUKoil bought nearly 3,000 U.S. filling stations from Getty Oil and Mobil. Gazprom also provides LNG to the U.S., via a swap arrangement with Algeria. It also provides natural gas to 405 of Germany's homes and many of its factories, as well as much of the rest of Europe. Russia's Gazprom pipelines also play a major role in delivering gas from the "stans."
   
   There is a fair amount of evidence that CIA chief Casey (Reagan administration) worked with Saudi Arabia (mad at Russia for invading Afghanistan) to break Russia's economy via increased S.A. production - however, the data do not provide a clean fit supporting this theory. Low energy prices in 1998 led to Russia defaulting on its debt, as well as many bank failures within the country. Prices quickly recovered in 1999, and along with a 40% increase in production between 2000-2004 transformed Russia into a major holder of foreign currencies. Russia has avoided the "Dutch Disease" because it didn't have much manufacturing, other than defense industries, to start with.
   
   Mass privatization did not begin until mid-1992 under Yeltsin. Oligarch-controlled banks loaned the state money in exchange for stock certificates; most of the state's economic problems were due to companies and individuals failing to pay taxes - only about 3 in 70 did, and even those usually paid much less than owed. It was agreed that if the banks were not repaid, the stock would be sold. This occurred in mostly rigged auctions that, eg. excluded foreigners, and usually at far less than the stock was worth. Thus, auctioning Yukos brought $309 million, vs a market value soon afterwards of $15 billion. Similar actions occurred in the mining industry. Other assets were given away in return for eg. TV stations providing support for Yeltsin.
   
   Capital requirements to establish private commercial banks were only $75,000 in 1989, after inflation; required $750,000 in 1987. "Oligarchs" could achieve this via sales of consumer goods immediately after the ban on their sales was lifted; other sources included trading commodities, taking advantage of government positions to sell hard-to-get commodities (eg. lumber). Legal chicanery and thuggery allowed further aggregations - government insiders during the late 1990s used their positions to exchange rapidly inflating rubles for IMF and Goldman Sachs loans denominated in dollars. (LTCM went bankrupt during this period. Another "trick" was suddenly changing stockholder meeting locations without notifying stockholders not part of management.)
   
   Many banks failed, however, during the commodities downturn, and millions lost their savings - including Gorbachev. Putin stepped in and replaced Russia's graduated tax (maximum 30%) with a 13% flat tax, set goals of increasing GDP 7%/year (double in ten years), and increased military spending 27% in 2005 and another 22% in 2006.
   
   Putin's 1997 dissertation proposed creating effective companies in natural resources and using them to advance Russia's national interests after commandeering them. He also wanted to open manufacturing to foreign investment (help modernize), but retain operating control - again to focus on national interests. ("National interest" was equated with low prices within Russia, and suspending deliveries to foreign countries that don't support Russian policy.)
   
   Putin seized the assets of media moguls that criticized him, then replaced oil leaders involved in "asset-stripping," and maneuvering to sell large portions of their companies to American firms, reach long-term agreements to sell oil to China, and failing to pay taxes. (Oil leaders were also deemed guilty of black market activities, an economic crime in Russia. Further, there was strong evidence some were involved in several murders of both public leaders and private competitors.)
   
   Russia's re-nationalizing industry (typically 50% + 1) has given it leverage greater than with nuclear weapons (they were only useful as threats). Reagan tried to block construction of a new gas pipeline from Russia into Europe, and backed it up by banning use of G.E. pumps and other pumps using American parts. Britain, however, ignored Reagan and supplied the equipment. (Cheney has subsequently made similar efforts elsewhere against Russia, and failed as well.)
   
   Russia has the world's largest reserves of natural gas. Ukraine was receiving gas at about 1/3 the world market price, was warned that if wanted closer relationships with the West it should pay Western prices, and then was cut off when it refused to do so and instead diverted Germany's supplies. Similar haggling has occurred involving Georgia and Hungary - the latter regarding its possible agreement to host a competing gas line.
   
   Russia now is claiming ownership of the North Pole sea bottom as an extension of Russia - experts believe it is rich in energy resources.



5. This book is an important read for anyone with an interest in foreign policy and the role that energy is playing in it.
   
   I have read the book and listened to Marshall Goldman speak, and read the other reviews, and am writing this because I think the other reviewers may be missing an important point. It is not so much about the details of the book, and I am sure there are some factual errors. The story is about Putin and about Energy, and how Putin has turned Russia from a bankrupt nation to an energy and economic. powerhouse. Goldman's main message is that we should understand how Russia is successfully using energy as a tool of foreign policy. For example, much of Europe, particularly Germany and Eastern Europe, is becoming dependent on Russia for natural gas, a principle source of their energy supply. Russia is building Nord Stream, a pipeline under the Baltic to deliver natural gas directly to Germany. Russia has a pipeline under the Black Sea to deliver natural gas through Turkey up to Hungary. Russia recently reduced the supply of oil to the Czech Republic, a clear suggestion that Russia is unhappy with U.S - Czech Missile Defense Agreement. Russia is attempting, with some success, to create a pipeline monopoly for delivering natural gas to Europe. Goldman shows how Gazprom is squeezing the supporters of the non-Russian NABUCCO Pipeline from Azerbaijan through Georgia to Turkey and thence to Europe, and how Russia, through Gazprom, particularly is creating partnerships with other gas producers, such as Algeria, to be their distribution arm, closing out possible competitors. Goldman describes the concept of having Russian company officers being simultaneously key members of the government, therefore assuring that the companies are supporting government objectives and policies. Gazprom is a particularly good example.
   
   Of course, all of this Russian power comes from a simple fact: the price of oil and natural gas has jumped since 1998, when Russia was almost bankrupt. Putin is the beneficiary even if not the cause of this phenomenon.
   
   One might get dramatic and say that Russia has invaded Europe, with natural gas pipelines rather than tanks. Perhaps we should take note.

5 comments about Eat the Rich: A Treatise on Economics (O'Rourke, P. J.).

1. P.J. O'Rourke manages to dizzy his audience with a tautological series of stories, comparsions, and self-defacement and then nauseatingly spews empty paragraphs. Don't know what a tautology is? Read this book, you'll figure it out.
   
   An author either takes pride in his ignorance or banks on his authority. O'Rourke attempts to do both, the former almost always shining through the latter. Coming away, you'll feel like you learned something. Of course you did! It just took him 10 angles, 5 anecdotes, and 8 less-than-appropriate similes to convey a Macro 101 principle. If you want a good laugh, read this book. If you want someone who knows what they're talking about, keep looking



2. Barring none, this is the place for a novice P.J. O'Rourke reader to start. He has been in a slight slump as of late, but he is at his peak here. I loaned my first copy to someone who never returned it. If I lose this copy, I would buy it again.
   
   This is O'Rourke's essay on economics, in it he analyzes why some societies work economically and why some do not, regardless of geography or access to natural resources. It has often been said that to be funny you first have to be smart. Here O'Rourke demonstrates that he knows more than a little about free market economics. He posesses keen powers of observation and an even sharper wit. His innate intelligence comes through.
   
   How much funnier would he be had he not burned out all those brain cells in the '60s? It's not likely he could be! This one is hard to top.



3. PJ O'Rourkes books crack me up. But you still can learn from them. This book is a funny, but true, perspective on various economies. Not from a real scientific perspective, but rather "the Man on the Street".



4. Smug rich people and their propagandists don't make me laugh, no matter how cute they think they are.
   Regarding why some countries are poor and others rich, it's not complicated. The rich nations have been imposing disastrous neoliberal economic policies upon the poor nations that concentrate wealth, destroy local economies, and decimate labor and environmental protections.
   Generations of invasions and colonialism haven't helped matters either.
   Moreover, those people who work for economic justice are often oppressed by the state forces the rich countries arm and train. For example, the U.S.-backed Colombian forces and paramilitaries kill a couple hundred union activists each year. Subtle Voices: Cries from Colombia and The Profits Of Extermination: How U.S. Corporate Power is Destroying Colombia
   
   O'Rourke does what the rest of the corporatists do, they co-opt the brand "conservative" while they divert their audiences from the realities of geopolitics.
   For some actual understanding of economics, I'd recommend When Corporations Rule the World andThe Corporation.
   
   "The money hunger grows on what it feeds. So everyone is compelled to take part in the wild goose chase, and the hunger for possession gets an ever stronger hold of man. It becomes the most important part of life; every thought is on money, all the energies are bent on getting rich, and presently the thirst for wealth becomes a mania, a madness that possesses those who have and those who have not.
   Existence has become an unreasoning, wild dance around the golden calf, a mad worship of God Mammon. In that dance and in that worship man has sacrificed all his finer qualities of heart and soul - kindness and justice, honor and manhood, compassion and sympathy with his fellowman. Each for himself and devil take the hindmost. Is it any wonder that in this mad money chase are developed the worst traits of man - greed, envy, hatred, and the basest passions? Man grows corrupt and evil; he becomes mean and unjust; he resorts to deceit, theft, and murder."
   -Alexander Berkman



5. Although the book's a propaganda piece of O'Rourke's Libertarian views, it's a lot of fun to read and gives some insights into the life in places where one will hardly even travel to.

5 comments about The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor.

1. Landes is the man, and this book pretty much sums it up. His primary thesis, that when humans are given the freedom to be innovative and pursue their own interest, is familiar from Adam Smith, but Landes does it better, it's a convincing argument. Culture is the determining factor in the success and failure of nations, not chance, not geography, not even resources, and Landes makes it obvious, it seems.



2. A good and informative read, more so, the second time around. Landes, raises many excellent points for debate between socio-economics and cultural influences of peoples and their leaders, more ofter imposed upon them, as opposed to chosen to lead.
   
   The book chosen for an economics class just finished at Lund University, Lunds, Sweden. As, a retired American ex-patriot with a background in international finance, still interested in learning, this book is highly recommended for anyone seeking to gain a better understanding on the question "how did we get to where we are?" And divides the world's peoples into three catagories: those that spend billions yearly on losing weight; those that eat to live; and, those who don't know where their next meal is coming from! That our wealth (the West) is dependent on others less fortunate. What they can't make, they will take! That wealth is, in and of itself, a magnet for exporting of commodities or products, but when all else fails or is denied -- people (migration) will be the end product that swamps the west.
   
   We'd better wake-up and understand our need to declare World War III, not nation on nation, region on region, or religion against another religion, but a unified "War on Poverty" led by the west.



3. Landes provides an interesting and credible explanation of the differences in income/capita (now about 400:1, about 5:1 250 years ago) between the richest and poorest nations. En route, Landes also provides a useful perspective on today's globalization debate.
   
   Most of the differential is attributable to cultural values. Some, however, is geographical. If one marks off a belt a couple thousand miles in width circling the earth at the equator, one finds within it no developed countries. Year-round heat encourages proliferation of disease and parasites. Poor soils and extreme dry areas are added problems, as well as the debilitating heat's effect on workers.
   
   From about 750-1100, Islamic science and technology far surpassed those in Europe - then something went wrong and science became denounced as heresy by religious zealots. Similarly, state control allowed Chinese innovations to fall into disuse. China's flotillas far surpassed Europe's. The biggest ships were about 400' long and 160' wide (Columbus' Santa Maria was about 85' long), and the fleet totaled 317 vessels and 28,000 men. Then new leadership brought an emphasis on agriculture and all ocean-going ships were destroyed in 1525.
   
   Europe enjoyed a monopoly on corrective lenses for 3-400 years, beginning in the 1300s, more than doubling the availability of skilled craftsmen and allowing the further development of microscopes and telescopes around 1600.
   
   Cotton from India proved capable of multiple washings (vs. wool), thereby transforming standards of cleanliness and health.
   
   "Easy money" (eg. gold from Spanish colonies, Holland's discovery of North Sea natural gas) makes for a lazy economy that fails to develop the talents of its people.
   
   The Protestant Reformation gave a big boost to literacy, and spawned dissents that are at the heart of scientific endeavor. Data show a much greater percentage of scientists from Protestant vs. Catholic backgrounds. Unfortunately, after Luther, cleanliness became a particular cause for suspicion of heresy, and smuggling non-approved books led to the death penalty. Thus, the fate of Catholic southern Europe was sealed for 300-some years. Sicily also suffered from intolerance and superstition of Jews, forced them out, and imposed a backwardness in trade on itself.
   
   Landes then goes on to ask "Why did the Industrial Revolution occur in England?" Protestants were persecuted and expelled from France. Weavers from the southern Netherlands sought refuge in England and brought trade secrets with them, while Jews from Spanish persecutions brought networks of trade connections. England also had a much better system of roads, along with an emphasis on transport speed and time in general. Meanwhile, France was undergoing the upheaval of the French Revolution, India's craftsmen avoided using iron and steel (had made no progress in scientific knowledge for centuries), while Russia was hobbled by serfdom's tying peasants to the land to do forced labor. China and Japan had walled themselves off from the rest of the world - in fact, China lost many of its early innovations through disuse.
   
   Another problem for Russia was that serfdom left so much wealth in the hands of the nobility that overall consumer demand was limited. Russia's poor industry was only able to produce inferior rifles, resulting in enormous losses in the Crimean War (1854-56), the war with Japan (1904-05), and WWI. Finally, the Baltic states remained poor because they were tangled in an endless struggle for freedom.
   
   Regardless, once started, the Industrial Revolution proved difficult to copy because division of labor complicated industrial espionage. Across the Atlantic, scarcity of labor in the early U.S. led to high wages and a push for innovation. Thus, European devices were copied and imported, and skilled European craftsmen encouraged to move to high American wages. (Side Note: By the time of the Civil War, firearms production in the North vs. Confederacy was 32:1 due to the South's emphasis on agriculture.)
   
   The Spanish in South America kept Protestants and Jews out; independence came not because of the settlers' strength, rather Spain's weakness. Spain also brought a macho society attitude that adulthood brought males complete independence and idleness; South American immigrants were also less educated than those in North America and the immense landownings lent themselves to simple ranching enterprises. (American immigrants created a squatters' rights culture, with small landownings and a high motivation for self-sufficiency.)
   
   China and Japan both resisted foreigners; the latter persecuted Christians and their converts after being told these groups were part of Spain's control mechanism. Following a period of anti-foreigners, Japan committed to learning from and copying the U.S. and Europe. (The Chinese did also, but much, much later.)
   
   Muslims (Ottoman Empire) cut themselves off from the mainstream of knowledge via banning the printing press - had a problem with a printed Koran. Another major limiter was their diminishment of women. (The Japanese did also, but to a much more limited extent - eg. girls were well educated, they worked until married, and continued to work afterwards if their income was needed.)
   
   The Japanese realized they lost WWII because of greater U.S. industrial output. Landed attributes this to their support for a large, exporting auto industry - American occupiers saw no need for such an industry (comparative disadvantage). Japan's auto producing disadvantages (small market, lag in technology) were turned into advantages through the Toyota Production System.
   
   Landes points out that today's comparative advantage rationality can easily become tomorrow's mistake. His example is Germany - the British economist John Bowring lamented that the foolish Germans wanted to make iron and steel instead of sticking to wheat and rye and buying their manufactures from Britain. Had they heeded him, they would have pleased the economists and ended up a lot poorer. Similarly, the Japanese.
   
   Bottom Line: The most successful cures for poverty come from within. Educated, eyes-open optimism pays; pessimism only offers the empty consolation of being right. Gains from trade are unequal. Some activities are more lucrative and productive than others.



4. The historian who hates facts
   
   David Landes' The Wealth and Poverty of Nations is at once an impressive display of scholarship and a mortally flawed analysis of, as the author put the question "why some nations are wealthy and others desperately poor." The reason why I say it is flawed is not because I disagree with the main thesis - that attitudes towards innovation and openness to new ideas determine wealth - but rather that the way this thesis is argued is completely a-scientific, if not anti-scientific. In particular, David Landes' contempt for quantifiable facts, banishes the book from the land of scientific inquiry to the land of pure ideology.
   
   Historians who despise facts are nothing new. Marxist historians insisted for half a century, even in the face of the highest economic growth rates seen in human history, that the internal contradictions of capitalism were dragging it to its grave. Professor Landes' contempt for numbers, though, is much more damning than that of the Marxist historians. While they based their analysis exclusively on Marxist theory, and thus had no problem trumpeting their contempt for "bourgeois statistics," he stakes his analysis on the same facts he disparages throughout the book. The Wealth and Poverty of Nations is one long account of experiences of economic growth (or lack thereof) of various nations and thus one would expect it to be empirical.
   
   Professor Landes' disdain for numbers that do not agree with his theory is a recurrent theme throughout the book. It begins with an affirmation that Western Europe is the best place for agriculture because it receives more rainfall than any other area that flies in the face both of rainfall data and agricultural production data. Professor Landes seems especially disgusted by cliometrics. Now cliometrics is one of the most interesting developments in historical analysis. It is the application of the best and most sophisticated statistical methodologies to historical facts in order to shed new light upon historical process than is possible with the paltry pre-existing data. It is, of course, imperfect and cliometricians argue amongst themselves over many of their findings. However, cliometrics is one of the most interesting developments of historical inquiry, showing many pre-existing interpretations to be incoherent with the facts.
   
   When confronted with cliometrical evidence, instead of judging his thesis against this historical evidence, Professor Landes chooses instead to disqualify it, behaving exactly like the Marxist historians he (rightly) criticizes. One passage is particularly illustrating:
   
   "Some historians would argue that these strangers saw and understood less than they thought, or that they blackened the Indian picture by way of brightening the European. A few have even asserted - on the strength of estimates of food intake - that the Indian ryot lived better than the English farm laborer.
   
   Such calorimetric cliometrics seem to me implausible in the light of the gulf between European and Asian techniques. Nor am I persuaded by efforts to project twentieth-century comparative income estimates back to the eighteenth century. The opportunities to distort the result are endless, and the leverage of even a small mistake extended over two hundred years is enormous.
   
   In these speculative exercises, the numbers deserve credence only if they accord with the historical context. That context, for India, was one of limited property rights and technological backwardness. Western Europe, well on its way to the Industrial Revolution, was inventing and improving ingenious, labor-saving devices, in particular, both hand- and power-driven machines. It had long since passed Asia by. It's as simple as that: more productive techniques translate into higher incomes."
   (page 165 of the paperback edition)
   
   The numbers deserve credence only if they accord with the historical context. In other words: My analysis is, by hypothesis, correct. Therefore, any evidence to the contrary must be wrong. Dr. Goebbels could not have said it better. No matter that there is a reasonable literature stating that Europe did not have the most productive techniques nor the most complete property rights. (see China Transformed: Historical Change and the Limits of European Experience by R. Bin Wong and The Great Divergence: China, Europe, and the Making of the Modern World Economy by Kenneth Pomeranz). No matter that various stories can, and have been, told in which the economy with the higher wages is not necessarily the one that surges ahead. If it disagrees with me, it is wrong. It's as simple as that.
   
   Mr. Landes' lack of proficiency with numbers is evident even with regard to those that are not at odds with his thinking. For example, when analyzing the war between Paraguay and the Triple Alliance he states that 70% of Paraguay's male population died as a result of the brutality of allied occupation. While the brutality of the occupation is beyond dispute, the number is preposterous. The occupation of Poland for five years by Nazi Germany resulted in 20% reduction of the Polish population. The idea that the Brazilian and Argentinean occupation troops could be 3 ½ more efficient than the Nazi death machine with no concentration camps, machine guns, airplanes or even roads, trucks and railroads for that matter, really makes very little sense. These silly numbers have been re-estimated by more recent historians and cliometricians and have been shown to be much smaller.
   
   Ernest Rutherford is quoted as saying "All science is either empirical or stamp collecting." (actually, he used the word physics, but physics at the time meant empirical). Professor Landes' book is quite an impressive stamp collection, but fatally flawed empirical analysis.



5. We're reading this in my Business in World History class. The book makes me want to stab my eyes out and jump off of a sky scraper. Yay! :)

1 comments about The Coming Economic Earthquake.

1. Burkett delineated growing federal deficits and the ever increasing use of debt by business and households out of control. Burkett points out those severe economic times will appear sometime shortly after the millennium unless current polices are changed. Burkett believed that Keynesian economic policies, with ideals for continuing federal deficits and the implicit preference for higher levels of consumption, reduced saving, and a larger role for government in the economy are a means to disaster. As Burkett states in the book that as interest on the debt consumes a larger and larger portion of the yearly federal budget, and more money is borrowed each year to pay the interest on what was borrowed in previous years, there will be a temptation to "monetize" the debt at an increasing rate leading to a calamity not seen since the Great Depression. Burkett questioned whether or not elected leaders would take action in time to prevent fiscal chaos, and believed they would not.

5 comments about Guide to Economic Indicators: Making Sense of Economics - Sixth Edition.

1. As the title says, this book can help you make sense of economic indicators. The more you know, the easier it is for you to understand the economical aspects of society, and this seemed to add a lot more to my knowledge, and it clarified other thoughts.



2. The book itself will be of great use for those analysts who evaluate country risk analysis. Economic indicators sometimes tend to be hard to understand, but this guide makes them easy to comprehend and relate to each other.



3. True to the style of The Economist, this book makes everything seem easier than it really is. However, for people who spend too much time thinking about economic issues, this is actually rather refreshing, much like a cold beer after a long day's work.

   Some examples: "In the long term, the growth in economic output depends on the number of people working and output per worker (productivity)" (Page 41); Or "In general, the more optimistic consumers are, the more likely they are to spend money. This boosts consumer spending and economic output" (Page 93)...

   ...One begins to yearn for the days where economics was more of an explanatory and less a mathematical science.

   The guide is divided into a number of chapters discussing issues and examples related to
   - How economic activity is calculated, and what the main indicators GDP/GNP/NNI capture and do not capture, as well as what changes in these indicators or their components mean.
   - Employment indicators such as employment by sector or the unemployment rate
   - Balance of payments and fiscal indicators, such as tax revenue or budget deficit
   - Consumer indicators, such as disposable income or consumer confidence and their significance
   - Investment and savings indicators, such as investment intentions or sales/inventory ratios
   - Business indicators, including business conditions, auto sales, construction orders and other common stats
   - Exchange rates and financial market indicators, such as interest rates and money supply.
   - Prices and wages, like the effect of oil price changes, among others

   Coverage of the most common and widely available indicators is fairly comprehensive. Given the simplicity of the book, it is better to have a certain level of economic knowledge and opinion to be able to put the content in context. Not much different to reading The Economist, really.




4. I expected a guide that would assist in determining where we were in the business cycle. This wasn't really it. The book is structured more like an encyclopedia - analyzing each indicator in detail and in isolation. A fine addition to anyone's economic reference books, but disappointed me by failing to treat the economy as an organic whole.



5. I wish I would have had it during Macroeconomics class for a reference.

5 comments about Gusher of Lies: The Dangerous Delusions of Energy Independence.

1. Gusher of Lies gives a cogent convincing rebuttal to the idea that America should be energy independent.
   
   Robert Bryce is a journalist and author who has been writing about energy issues for awhile. He is thoroughly knowledgeable about the topic and explains the issues clearly.
   
   Gusher of Lies starts with three chapters describing the idea of energy independence in American politics. This sections is a good summary of the politics and press behind the idea.
   
   In part two Bryce gives an overview of energy markets over the past thirty years. I found a lot of new information in this section, and good explanations of a complex subject.
   
   Part three covers in detail why the idea of American energy independence is so flawed. There is a lot of data in this section, and it is presented well. This is obviously an area of strong interest to Bryce. I found the arguments through and convincing.
   
   Part four is were Bryce explains how interdependent we really are, and offers some advice on what we should do. This section is fairly weak. He made the crux of this argument throughout the book, and this sections devolves into show and tell. He describes his visit to Saudi Arabia and Dubai. There was little new in this section. The last two chapters offer some advice about what to do. They mostly seem to say stay the course.
   
   Gusher of Lies is well written thoroughly researched book on an important topic. I learned a lot from reading it. The author is strongest in parts two and three were he leans most heavily on real data. His proscriptive section is weak, in my view.



2. What I love about Gusher of Lies is that it's highly entertaining, educational and subversive, and it will appeal to readers across the political spectrum.
   
   I think so highly of the book that I have the hope -- perhaps naive hope -- that it will open the eyes of voters who have been subjected to the campaign rhetoric of energy independence. You don't have to consider yourself on the left or the right to enjoy Bryce's dissection of those "energy independence" claims.
   
   I particularly enjoyed the chapter on the ethanol scam, and if you don't think it is a scam, just check out the evidence.
   
   Broadly speaking, this is a one-of-a-kind book on the realpolitik of energy.



3. As someone that's been in the energy business for 34 years I am happy to say that this is the best overall book on the energy business I have ever read. The ample supply of cold, hard facts as opposed to rhetoric makes it vastly different from most books that delve into the realms of alternatives to an oil based energy system. I would like to have seen a little more discussion of natural gas and the ongoing development of tight gas plays coupled with the possibilities of Gas to Liquids technology which is superior in many ways to Coal to Liquids.
   
   Having said all that, I found the author way too sanguine about the terrorist threat; and naive concerning the drivers for and intent of Islamic terrorism. The continual "neocon" bashing seemed to serve little purpose other than making the book more palatable to his liberal readers. To be fair he did spend a little time taking liberals to task on the nonsense they spout on energy but it was somewhat cursory compared to going after conservatives which seemed to be much more in his comfort zone. Some of his sources on the more political issues such as "All the Shah's Men" by Stephen Kinzer are more than a little dubious and certainly not objective.
   
   The energy stuff would rate five stars or more if that were possible. Too bad he had to salt the broth with liberal talking points related to the political issues. Even so this book is highly recommeded for anyone that wishes to become knowledgeable on the energy business.



4. This is a great book. "Gusher of Lies" goes too far. As does "Dangerous Delusions." Robert Bryce does not make a case for lots of lying and delusional behavior by proponents of energy independence. The title of the book is hyperbole.
   
   But Bryce does make a case for working on energy "inter"dependence, rather than "in"dependence. Energy issues are hard to handle. Nothing simple about them. Bryce takes the time to look at them carefully. He writes well, and supports his case with facts and argument.
   
   Hyperbole aside, Bryce makes a very persuasive case that we will be better off if we strengthen our energy connections with all other countries around the globe. Not try to wall ourselves off with energy independence.
   
   But critics of this book are right on one point -- you will not get a fair view from this book of the case for the other side. Bryce does what he implies in the title of the book. He treats those who support energy independence as lying and delusional. For Bryce, if you do not agree with him, you are wrong. Period.
   
   That focus on the one side did not bother me. This book is like a buffet with a limited selection. I supped on the facts, and spurned the opinion. That gave me a hearty meal. I enjoyed Bryce's writing style. His organization was particularly well done. I have read many books and articles on this subject, but Bryce presented facts and arguments that I had not seen before.
   
   Different people have different tastes. If you do not share Bryce's view on energy independence, and do not like to hear only a view you do not share, you will find little to your taste here. You will go away hungry, perhaps completely empty.
   
   If, on the other hand, you have an open mind on energy independence, give this book a read. You will, I'm pretty sure, come away with as full and satisfying a feeling as I did. Bryce's book is as good a book as I've read for a while, on any subject.
   
   My habit when reading a book is to tear up a piece of paper for bookmarks to put into pages I want to come back to later. The first fifty pages into the book I had already marked most pages. Later pages got less. But that's the first time I can remember marking more than ten pages in a book, let alone fifty. That told me something.
   
   Bryce's book may not appeal to everyone. But it appealed to me. Ignore the hyperbole, and I think you will find a great book.



5. Mr. Bryce's Gusher of Lies is a bracing antidote to the pervasive fantasy of U.S. "energy independence." Touted for over 35 years by any number of people who should know better (including, alarmingly, both of our most recent presidential candidates), the chimera of energy independence has misinformed American domestic and foreign policy and acted as a kind of soothing substitute for reasoned actions on America's undeniable energy problem. Lately, and most perniciously, energy independence has been sold as a natural and necessary step in the country's War on Terror. In his extensively researched and closely reasoned book, Mr. Bryce persuasively shows that achieving energy independence is technically infeasible, economically undesirable and of no particular value to our national security.
   
   In a career in the energy field that has spanned six presidential administrations, I have yet to hear "energy independence" explicitly renounced as a policy goal, and yet the nation has moved steadily in the opposite direction. Mr. Bryce's book will show the open-minded reader why this has happened and why it's time we ceased pursuing a pipe dream in lieu of formulating a rational energy policy.

5 comments about Global Capitalism: Its Fall and Rise in the Twentieth Century.

1. 
   I read books in groups, and bought this one along with David Walsh's "Knowledge and the Wealth of Nations" which I recommend above this one is you are only buying one book. I also read and have reviewed "Global Class Wars" as well as all other books I recommend below.
   
   Although I was less interested in the history, which is very well documented and clearly explained, and more in the lessons for the future, I found two clear bottom lines in this book that are supported by its extensive research:
   
   1) Open societies and open democracies generate more money and more opportunity and more innovation than closed or failed societies; and
   
   2) Keynes was right, there is an urgent vital role for government to play in addressing the social networks, including education, transportation, rules of commerce, and so on, that allow capitalism to work.
   
   The author distinguishes between individual, cooperative, and competitive capitalism, and I found validation in this book for my concept of communal capitalism, a capitalism that is guided by government in avoiding the exportation of jobs, the importation of poverty, and the impoverishment of the middle class.
   
   Unlike David Walsh's book, this book has more of a focus on what is moral and pragmatic, and so I recommend William Greider's "The Soul of Capitalism" as well as John Perkins "Confessions of an Economic Hit Man."
   
   I have a very strong feeling from this book and others, that the era of "out of control" capitalism is drawing to an end. We may even see the end of the corporation as a separate legal personality in the next 12 years. The transparency of information that is available when people attach themselves leech-like to a corporation and hold it accountable (see my review of "No Logo") is creating a powerful antidote against the Enrons and Exxons and Wal-Marts of the world who bribe elites and screw over the publics on both ends. I also see Wall Street losing its ability to "explode the client" (see my review of "Liar's Poker"). A great deal of good will be done in the next quarter century, and it will come from a combination of good government and educated engaged citizens working together across all boundaries.



2. Jeffrey Frieden, a Harvard professor specializing in international trade and finance, has written a masterly and comprehensive history of capitalism from 1870 to the present. His history of globalization reminds us that it is not a recent develpment and that its current success is not guaranteed.
   
   The first era of globalization (1870 to 1914) had many of the same characteristics as today's. There was an unprecedented cross-border movement of goods, capital, and labor. (Labor more so in the first era.) During these years huge amounts of capital moved overseas to America, Canada, and Argentina mainly due to the reduced costs of communication and transportation. The technologies driving this globalization were the telegraph and railroads. It was also facilitated by the fact that most currencies were convertible to gold. The investment in the Americas was also followed by a huge immigrant population. In these years, America, Canada, and Argentina had much larger immmigrant populations at the turn of the 20th century than today.
   
   The main thing that distinguishes the present globalization from the first is what happened in between. After the Great Depression and World War II remedies were put into place to mitigate the damaging effects of these economic and social catastrophes. Social benefits such as unions, minimum wage, healthcare and pensions were established as safety nets. In the era between the two globalizations when economies were mostly national the safety nets were part of the social contract between capital and labor.
   
   In 1980, when our current era of globalization begins, capital began to move overseas again in order to find countries with lower labor and social costs. This time, however, labor did not follow. The industrialized countries now have large middle classes with social benefits promised who are not certain about how they are going to be paid. This is causing many in the industrialized world to have second thoughts about our current phase of globalization.
   
   Frieden has a guarded optimism about global capitalism and thinks it is still the best system for distributing wealth. Yet, his last chapter "Global Capitalism Troubled" points to some more clouds on the horizon. There seems to be a growing gap between those who control capital and those who work for a living. People understand that globalization is inevitable but they want a new set of rules to address the growing inequalities.
   
   Frieden is a cheerleader for a more equitable capitalism that can deliver both social benefits and robust economic growth.



3. I was almost tempted to give the book a miss after seeing the high ratings that were given by reviewers that seemed to be anti-globalizationists (what an awkward term!)
   
   However, I came across the book at my library and gave it a chance, and I was not disappointed. It is a book that does a creditable job of summing up the ups and downs of the world economy over the past hundred years and more. And it also does a fairly good job of raising some issues and problems with the world economic system, and how the system had evolved to meet those issues and problems. On the whole, I think it's a balanced book, pointing out the critical need for free and integrated markets to raising millions in the world out of poverty, as well as some of the problems facing them.
   
   The only reason why I gave the book a four rather than a five is that it is not an easy read, and it is best read with some thought and analysis on the reader's part. Not necessarily a bad thing, but not something for everyone.
   
   By the way, do ignore those reviews that pretend to tell you what the author was saying in his book. I'm not sure that he's actually saying what they say he is saying.
   
   Read the book for yourself. It's worth the time and effort.



4. Of all the many books that have come out in recent years about global capitalism, finance and economics, this is certainly the worst. The author, a professor of government at Harvard, professes to specialize in international monetary history, but is really what his tenure title says he is, a professor of International Peace. He appears to be trying to reinvent his career by tackling the subject of capitalism but thoroughly lacks understanding of the subject matter, as made evident by his book.
   
   1. The author makes the same mistake that virtually all political science professors do when they write about capitalism: he glorifies the gold standard, he glorifies the Rothschilds and glorifies everything that had nothing to do with the emergence of twentieth century capitalism. The author is using his expertise in international relations to analyze a subject that is really never about governments, or grand alliances or fancy bankers. He thus fails to root the story in the advent of technology, or of business procedures or of the individual investor, but focuses instead of John Foster Dulles and Dean Acheson and Lord Halifax.
   
   2. Wherever the subject matter is strong, the book still fails badly. It does so because political economy is better analyzed by Robert Gilpin and others, whose books are mandatory reading and well written and which do not pretend to sell that subject matter as a study of capitalism.
   
   3. The book's sections are surprisingly badly arranged. Sometimes one feels the author may have a method to the madness but I doubt it after having read it. It is certainly not thematic, or designed to trigger thought or chronological.
   
   4. The book refers to a poem only twice in the 500 pages and it is about the King of Ghana! I mean a professor at Harvard should surely know how to maintain balance in his subject matter. Is that the one poem he could find worth including?
   
   5. Stunning is the lack of understanding of the issues. He describes Britain as fully supportive of free trade mid-19th century but fails to consider how colonialism could be a form of free trade. He describes China Turkey and India as the only failures of the early 20th century without making the same connection with colonialism.
   
   6. Worse is his understanding of the gold standard. He never mentions that that relic was responsible for more misery than anything other than world wars. He fails to consider that since the gold standard was weakened in the Forties, there have been NO PANICS RAVAGING SOCIETY. He is a gold bug.
   
   7. He repeats William Bryan's Cross of Gold speech twice in the narrative with no suggestion that he is even aware his haphazard narrative is repeating the same quote. He also fails to mention that William Bryan was not buried in the election of 1896 but actually came to dominate the 20th century, what with unionism, minimum wages, no gold standard, empowerment of the individual investor and every other idea that Bryan first espoused. TR's and FDR's reforms were nothing if not Bryanism.
   
   8. Why would a book mention so much about Rothschild's and their family in the US without mentioning Jacob Schiff, or detailing JP Morgan, or RObert Lehman or Albert Gordon. I mean the author simply has no balance on the subject matter because he knows so little about it.
   
   9. Finally, it is not clear what Jeffrey Frieden is doing at Harvard. Such poorly researched fare is common to COlumbia Business School and its Dean Glenn Hubbard, or to the Hoover Institution or some place like that. Harvard on the other hand puts out more balanced and far more thoughtful pieces.
   
   BAD BOOK THAT MUST BE AVOIDED.



5. This was one of the best business books that I have ever read. It provides a thorough overview of the history of business globalization, yet it is not academic at all. Although it is long and has a few, short dry spots, it is an easy read that is engaging from beginning to end. The lessons from history are very applicable today. I highly recommend the book to anyone that works for a global company or wants to understand the forces of globalization and the impacts on our economy today.

5 comments about Globality: Competing with Everyone from Everywhere for Everything.

1. This book is a must for anyone competing in the rapidly changing global environment. The authors provide story after story of current companies creating exceptional growth and value in some of the previously least expected places in the world. It is humbling to recognize how much business success is occuring using many nontraditional and diverse business strategies. There is so much to be learned from these companies and countries. The authors provide a vivid picture of why that learning is so needed if one expects to compete. The book does not leave the reader without suggesting ways companies can join the success.



2. The authors of Globality have captured well what we are just now beginning to recognize in US corporations. For the last 20 years, globalization has symbolized the outpost approach American corporations have adopted to opening markets outside the US, while remaining stateside centric in our planning and execution. Globality is a sharp reminder that those markets are not just open, but thriving so well that American business must recognize the need to incorporate the issues, challenges, and opportunities into their strategic planning. Now is the time to put aside our pride, and learn the strategies and tactics that given our global neighbors a competitive edge. Most of all, we must recognize the risk of not doing so.



3. Globality is an excellent book for corporate executives, business unit leaders, and entrepreneurs. If you are an investor or want to read about the culture of world business, this isn't going to be your cup of tea.
   
   We are in the middle of the great business convergence, an event so epochal that it will be written about as one of the great turning points in world history over the next several hundred years. What's it all about? Simply, every organization will complete with virtually every other organization on the planet. In the process, the dominant companies of the 21st century will be built.
   
   In Globality, Boston Consulting Group (BCG) partners Harold Sirkin, James Hemerling, and Arindam Bhattacharya take the view primarily from enterprises founded in China, India, Brazil, and Mexico to show how those with the fewest resources, least skills, but lowest costs, are building important global positions in major industries. I compared this writing to what BCG founder Bruce D. Henderson used to write in the 1960s about Japanese, Korean, and Taiwanese companies being poised to deflate profits for companies in the U.S. and Europe, and I was pleased to see that Globality is much more articulate, better defined, and easier to understand.
   
   Although the book is very much about the evidence brought by the challengers, the information is presented neutrally in terms of describing opportunities available for anyone. In addition, there are specific suggestions for what well established companies in developed countries might do to best take advantage of these opportunities.
   
   For me, the best parts were the case histories of companies in China and India that I don't know much about. You'll find many interesting stories.
   
   In terms of analyzing the opportunities, the major themes are:
   
   (1) Minding the Cost Gap
   
   (2) Growing Human Capabilities
   
   (3) Reaching Deeper into Markets
   
   (4) Geographically Pinpointing Resources and Capabilities
   
   (5) Thinking Big
   
   (6) Acting Fast
   
   (7) Getting Help from Outside
   
   (8) Innovating the Business Model
   
   (9) Embracing Global Diversity
   
   (10) Being Prepared to Attack Everywhere and Be Attacked from Everywhere
   
   The chapter titles in the book aren't quite this clear. You'll have to read the material to grasp the key concepts, but you'll get it.
   
   I liked that the book has strategic, organizational, and tactical dimensions. If you want to get a quick look at the overall themes, head to page 239 to read the Nokia story and to page 249 to read the Emerson story.



4. this book is reviewing the development process of companies started in emerging countries until they become global. Initial competitive advantages as well as the acquisition of strategic features are described. This book is providing a flavour of the necessary ambition of the traditional western company in order to sustain upcoming market competition.



5. Globality describes the next phase of globalization and gives advise for how businesses should deal with it. In the authors view the first phase of globalization was companies building factories overseas and outsourcing manufacturing and labor intensive work to low cost countries in the developing world. The "Globality" phase will see companies from both the developed countries and the developing countries competing as peers. There is no longer a lack of talent in the developing countries.
   
   In this new global economy companies must deal with seven "struggles" according to the authors. They are: minding the cost gap; growing people; reaching deep into markets; pinpointing; thinking big, acting fast, going outside; innovating with ingenuity and embracing manyness. Each of these topics makes up a chapter and is elucidated with examples and anecdotes. While each struggle was explained by itself, they did not seem to hang together as a coherent whole.
   
   The authors are consultants at the The Boston Consulting Group; they were clearly writing for clients or potential clients. The text offers several examples of companies which had embraced the particular idea under discussion and a description of how they had benefited from it.
   
   Of course we don't see examples of companies which had tried these ideas and not had success from them. Nor do we see companies that were successful with different strategies. What else had the companies that they profile tried before they came to these ideas? We would have learned a lot more from seeing these different attempts and out comes. Structuring the book as a list of companies that had succeeded by using the authors ideas makes it seem like a long advertisement, not a book that was intended to study a topic, or report on a phenomena.
   
   The advertising nature of the book aside, it was well written and offered and intelligent view of an important topic.

2 comments about Import/Export For Dummies (For Dummies (Business & Personal Finance)).

1. This book is a treasure trove of information, advice and resource contact data for anyone thinking of going into, or already in, the import-export field. In a conversational style, the author walks the newcomer to international business through the myriad of challenges, regulations, and opportunities inherent in doing business with overseas interests. This book should be required reading for anyone thinking of importing or exporting!



2. Import/Export for Dummies is a useful tool for anyone interested in seeking opportunities in importing or exporting. After reading the book I learned more than I anticipated, and my mind is enlightened to many details that I was not aware of prior to reading it. For example I am currently seeking opportunities to import goods to the United States from the Czech Republic, such as pudding-yogurts. The book informed me of all that I need to consider to make any potential deal or order go through smoothly without any penalties or errors that could result in a financial loss. It provided me the guidelines I will need in negotiating with prospective suppliers in the Czech Republic, and how to go about identifying customers in the U.S.
   
   The book is written in a simple and clear approach.
   
   The book is easy to understand and its simplicity is amazing. It is segmented into five parts which focus on setting up the business, learning how to identify applicable rules and regulations, identifying suppliers, find customers and develop an understanding about certain procedures that are unique in importing and exporting (such as: terms of sale, methods of payment, customs clearance procedures, etc.)
   
   As in most Dummies books, examples are abundant, and the author has provided great insight with examples from his professional life and students who attended his seminars.
   
   The book is also full of excellent resources, including a detailed list international trade commission offices for all countries located throughout the United States. These offices can provide assistance in identifying suppliers and also provide valuable insight in the how to do business in specific countries. Additionally, the book also provides information as to various free resources available on the internet.
   
   I would rate this book as an absolute necessity for someone interested in starting their own import or export business. It is the "bible" of importing and exporting that can help inform, warn, and assist you in what you need to know, and do, to make sure the goods you are importing or exporting will move without problems.

4 comments about The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World.

1. The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World is a phenomenally insightful book that looks at the sources of innovation and the characteristics of innovations that receive venture funding.
   
   The evidence is compelling and surprising. The data suggests that the key to innovation is finding solutions that already exist. Successful innovation is not about inventing new solutions. It is about inventing new applications of existing solutions. This book may be more powerful as we learn to really leverage the Internet in development.
   
   It may modify innovation and R&D at every institution that studies the book.



2. 
   I read this book as I had come across the author's views that that, in addition to innovative inputs , entrepreurial firms require venturesome and resourceful customers who are willing to take a chance on their products and services. Too often I think innovation is viewed as the result of back room boffins planning and researching, whereas in fact the real world of trial, error and customers who are willing to adapt and suppliers who are willing to change is more real. There is a wonderful Dilbert cartoon where Dilbert proudly shows Dogbert the world's first video phone. Dilbert is ecstatic at his purchase, placing it on his desk saying `and all we have to do now is wait for someone else to buy one and we can talk'. Dogbert ruefully notes that societies material progress relies on people like Dilbert.
   Amar Bhidé's an Indian-born, professor of Business at Columbia elegantly begins his discussion of innovation as follows "Just as a devout Hindu might begin a journey with a prayer to the Lord Ganesh, it is obligatory to start a discussion on modern innovation by invoking Joseph Schumpeter" Having nodded towards the master, he then proceeds to deconstruct, if not actually slaughter, the sacred cow that is the Schumpeterian model of innovation. This for me is a major strength of the book,it has become fashionable to take creative destruction - the utter replacement of one technology by another, as the basis for the cycles of prosperity and innovation. Yet the reality is somewhat different - in the 1930's typewriters were predicted to eliminate the need to write by hand, yet in 1990 sixteen billion pencils were sold; and
   In most markets, a large majority of people will possess both a landline and a mobile phone, despite the potential of the mobile to replace the landline. While I believe that creative destruction as a model remains important for companies investing in new product research - as in Cristensen;s `innovators dilemma' and Foster's `attacker's advantage', however Bhidé's view that markets remain both more sophisticated and complex than one simple model, is both instructive and refreshing.
   Bhidé's core argument is that the US consumer is assertive, adventurous and capable - in short, venturesome - in relation to new products. In what other market would such a significant group of customers exist who would be so open to products such as the iPod, who are willing to pay prices which will justify significant investment and who are open to being `experimented upon' ( ref. Fredrich Hayek). Bhidé reviews the work of a sample of US - based venture capital firms and the ventures they invest in, to draw conclusions about the exceptionalism of the US customer. In a variation of the `coming to America' theme, Bhidé documents how `making it' in the US first is hugely important for success, even for firms whose founders originate elsewhere. Indeed the US customer is blind to the national origins of product, the company or the individuals involved in providing the product/service.
   I had three major concerns with this thesis - firstly the sample set, as Bhidé acknowledges ( indeed he has a major sideswipe at ecomoetric analysis) , was not scientifically representative, and perhaps cannot be, but therefore runs the risk of being anecdotal. More importantly the VCs were US-based, I would have felt more comfortable with comparisons between success rates in US versus other VCs (the Israeli VC industry is well developed) and with other developmental paradigms - what about emerging companies in BRIC countries (for example)? Most importantly of all, the US is exceptional in terms of GDP per capita and technological prowess, so it may be easy to fall into the trap of stating that because it is rich, it is exceptional. An alternative may be that because it has been exceptional - no invasions in the 20th Century, opposed by an economic system which imploded - it is now rich. I think it would have been useful to examine markets in technology areas where the US is not the leader (eg. Korea for broadband Access, Europe for mobile phone penetration) to see whether venturesome consumers exist, or whether other parameters are important. I find it difficult to believe that US consumers are so significant different to other consumers, in their uptake of new products, that this justifies a permanent exceptionalism. Nonetheless the arguments made are thought provoking and useful.
   Bhidé remains optimistic about the potential for American industry and competitive enterprise within the global economy, and frequently disparages and disproves proponents of exclusion and economic and/or technological nationalism. Such optimism is refreshing (it should be noted the book was written before the Credit Crunch morphed into the Crisis of Capitalism), and forward looking, nonetheless it remains to be seen if (and it's a huge, world-transforming if) Chinese and Indian GDP per capita approaches US figures, will US firms and society still maintain their competitive edge. This is not to argue for economic nationalism, just to put a dampening comment that it is unlikely that 6% of the worlds population will remain so much a determinant of technological innovation and economic prosperity in a future where another 40% is coming to economic self-determination.
   One last point, I was puzzled by the inclusion of chapters on immigration into the US. In so far as I understood it, I think the point being made was that the US society was a welcoming meritocracy, which formed a mutually beneficial relationship with all, suitably qualified and motivated, comers. I did not think this fit with the general thrust of the argument, though its possible that my reading the book was tilted towards what it had to say about innovation, and that I was not sufficiently connected to the prosperity-generating side of Bhidé's argument.



3. I found Bhide's new book excellent on a number of levels. He makes quite convincing overall cases for his leading theses: first, that 'venturesome' actors throughout the US economy --including especially businesses as customers willing to try out new technologies offered them-- have been the key to the US distinctive productivity performance and second, the related and surprising proposition that fundamental research --so long as it gets done somewhere--has not been and won't be the driver of relative growth performance for the US in the future.
   
   Bhide does a good job with the supporting lines of his inquiry. He provides a first-rate description of the whys and hows of venture capital-supported enterprises. He also carries the argument that many, even large-scale investments in new processes and techniques in the services sector and elsewhere that have turned out to be fundamentally important to productivity advances were done, not with a fine economic calculus of costs and benefits, but rather in an entrepreneurial, venturesome spirit in the face of 'Knightian,' unquantifiable uncertainty.
   
   I found the book rich with nuanced and illuminating business examples taken from his research for the book. Nice to have a bold set of propositions built from a real-world, fact- based approach.



4. The book is a thoroughly researched, eloquently argued and highly persuasive piece. It's central thesis is that technological innovation is a complex, multiplayer game in which America still leads the world by a long way. American scientific, technological and economic pre-eminence are thus not going away anytime soon. The book goes on to argue that "neo-protectionist" fears are unwarranted, and shows how they will probably undermine America's economic might in the long run.
   
   The book comes with impeccable credentials. It is authored by Amar Bhide, the Lawrence D. Glaubinger Professor of Business at Columbia University. Prof Bhide is also a co-researcher of Edmund Phelps, 2006 Nobel Laureate in Economics who is an authority on, among other things, the relationship between investment in education and research on the one hand, and economic growth on the other.
   
   And Prof Bhide could hardly have chosen a better time to weigh in, as anti-offshoring rhetoric can be expected to rise over the next few months. It must be noted that the primary purport of the book is not to support outsourcing or offshoring,and I am sure nothing could be farther from the author's mind than to be painted as a torchbearer for the outsourcing brigade. Nonetheless, the arguments presented therein can be read as making a substantial case for a more liberal approach toward outsourcing.
   
   The author marshals an astonishing array of evidence in supporting his thesis, stitching together data and information from diverse disciplines. He presents data to show that protectionist fears in the 1980s that the US would soon be overtaken by Germany and Japan, which focused on rigorous planning of their scientific manpower, proved baseless as the US prospered while the ostensible aggressors largely floundered. He says things are no different this time, with China and India.
   
   The book's arguments can broadly be summed up as follows:
   
   * Wealth arises not so much from creating new technological breakthroughs as from the capacity to benefit from those breakthroughs.
   
   * This 'capacity to benefit' is a higher order capacity that includes elements such as the ability to create products based on those technological breakthroughs, the ability to market those products well, the ability to take risk and freedom from over-regulation. In particular, "venturesome consumption" - the propensity of consumers to embrace products based on new technologies - is vital.
   * The US has most parts of this diverse puzzle - particularly venturesome consumption - and is hence best positioned to benefit from new technologies. This is true even of new technological innovations produced abroad. As an example, the author avers, the exceptional ability of US companies to use IT has been a strong reason why US productivity has outpaced that in Europe in Japan.
   
   * Hence allowing technological breakthroughs to happen abroad certainly does not hurt, and possibly benefits , the US. The author offers the example of the iPod, much of whose technology originated in Europe and Asia, but which wouldn't have achieved the success it has without venturesome US consumers - who have in turn reaped huge benefits by so consuming the device.
   * This higher-order capacity is deeply rooted in various economic, social, cultural and psychological structures and is hence highly sticky, which makes it difficult for the US to lose it - and for other countries to acquire it.
   
   The author also introduces the notion of "nondestructive creation" (innovation that creates new products and services without displacing existing ones) in addition to the familiar Schumpeterian creative destruction. Such nondestructive creation creates new jobs without eliminating existing ones. At least in the nontradable services sector, these new jobs will have to stay in the US and cannot migrate to low cost locations.
   
   Thus, Prof. Bhide assures us, there is unlikely to be a giant sucking sound anytime soon.
   
   One potential objection that occurs to me, that protectionists may raise: relying too strongly on the 'nontradable services' argument may amount to standing on shifting sands at best. Several services thought to be nontradable have turned out to be tradable after all. IT services themselves were thought to be nontradable for long, until Indian IT service companies showed they could cross borders. Even advertising, which is highly culture- and context- specific - has been offshored (Lenovo has headquartered all its marketing activities outside China in Bangalore).
   
   The book also perhaps bypasses one major theme on the subject of 'how innovation sustains prosperity in a connected world' (and this is also my favorite argument in favor of why developed economies including the US should not be chary of allowing high-end work - and high-paying jobs - to flow abroad): a lot of the prosperity that so 'leaks away' from developed economies comes right back in the form of demand for products and services. As an example, Indian IT outsourcing companies are perhaps the largest airline customers in the world, as tens of thousands of workers travel each year between India and the countries where clients are located. These airlines such as United and Lufthansa are mostly headquartered in developed countries. Similarly, the same India-based outsourcers lap up the laptops, PCs, servers and networking equipment made by Dell, Sun and Cisco. They are huge buyers of software produced by Microsoft, IBM, Oracle and SAP. These companies (and their employees) can safely be assumed to have an insatiable appetite for the latest cellular phones and so forth from the likes of Apple, Nokia and RIM. These companies also employ legions of workers at or close to client locations - workers who pay taxes and pump money into local economies. Many of these companies are listed on US and European stock exchanges, allowing people there to participate in their wealth creation. Thus, prosperity 'leaking' abroad contributes to prosperity in the developed economies - not in some nebulous, long-term sense but in a way that is direct and almost immediate.
   
   These are but minor quibbles - the book cuts a wide swathe in making its elaborate argument convincing. Along the way, the author explores the question of why companies buy IT. The notorious 'Productivity paradox', which held that IT has not contributed to productivity gains in business - is firmly laid to rest. He avers that IT has brought new ways of doing business, and also delivered significant benefits to the customers of those businesses that used IT, which are ignored by conventional productivity statistics. Another interesting topic examined is that of why people acquire education (particularly higher education), and how universities perceive the economic value they impart to their graduates.