No comments about globalization: n. the irrational fear that someone in China will take your job.

5 comments about Global Political Economy: Understanding the International Economic Order.

1. This is an outstanding update of the author's earlier book, The Political Economy of International Relations (1987). It is meant to complement Gilpin's more recent work, The Challenge of Global Capitalism (2000). In Global Political Economy, Gilpin discusses a wide range of theories in the field combining careful textual analysis with advocacy of his own views. The author's own theoretical stance is one of "state-centric realism." He identifies with authors like Thucydides, Machiavelli, and Hans Morgenthau, but not with what he calls the "systemic realism" of authors like Kenneth Waltz. While he admires and uses the work of contemporary economists, he also carefully differentiates his approach from theirs (in Chapter 3). Except for a brief acknowledgement of the difficulty of explaining European integration in state-centric realist terms (in Chapter 13) and a bit of defensiveness on the continued value of theories of hegemonial stability (in Chapter 4), Gilpin does a good job of defending his views.

   The author does an excellent job of surveying recent work in economics without resorting to jargon. There are outstanding treatments of topics like the continued relevance of Heckscher-Ohlin trade theory, strategic trade, endogenous growth theory, and the new economic geography. The discussion of the globalization of international finance in Chapter 10 emphasizes the need to take into account the "increased interdependence of trade, monetary, and other aspects of the international economy" that results from "[m]ovement toward a single, globally integrated market for corporation ownership" (277). Chapter 11 provides a state-of-the-art discussion of the role of multinational corporations in the world economy. Chapter 12 does a fine job of discussing the likely future of theories of the developmental state in light of the Asian Crises of the late 1990s. The final chapter lays out three major scenarios for governance of the world economy, informed as always by the author's realist views.

   This book is long and dense. There are few wasted or unnecessary words. It is not easy to read. However, it could be used for graduate seminars or upper-division undergraduate courses in international political economy in conjunction with texts that are more empirical or descriptive in their treatment of international political economy.

   Global Political Economy is an excellent book. It represents a major and successful updating of The Political Economy of International Relations. Any person interested in international political economy can profit from reading it.




2. Gilpin'book is a quite complex survey on the functioning of the global economy. However, taking such a broad issue in the limitid scope of the book allows him not to analyze the topic in the broader detail. What I find interesting is that the author asserts the world economy is dominated by the United States and they are maintaining their dominance by certain privileges: dominance of US dollar in the international monetary system, creating the international financial architecture with controling its institutions and making the rules of the international trading system. He employs for this setting the international regime, whose main attribute is the presence of the hegemon in the background of the system. He realistically analyzes the position of nation-state in contemporary world economy. He originally finds the new roles for the nation-state as growth promoter of high-tech industries, constructer of the international trade and financial regime. He puts evidence of the continuing differences between three models of capitaism: that of Germany, USA and Japan. In the analysis of the relationship between MNCs and the nation-states he asserts the depence of the former on latter and not conversely as frequently claimed. In every chapter he provides the range of opinions on each particular segment of GPE and combines it with his own view, trying to pick up the best from each of the political economy branches. However, in the chapters about international trading, financial and monatary system I miss a more deep and sophisticated perspective about future development.



3. Robert Gilpin's Global Political Economy: Understanding the International Economic Order delivers what it promises by giving readers an understanding of economic relations among nations. Essentially, it is an introduction to the discipline of political economy, a survey of economic developments since World War II, and an analysis of the theories that compete to explain these developments. As an introduction to the field, it is both accessible and comprehensive, but extensive footnotes and a select bibliography provide resources for advanced students.
   
   Gilpin begins with a rather pessimistic assessment of his colleagues: economists, he says, have a suite of highly developed analytical methods and theoretical models that are seldom applicable. Political scientists, on the other hand, rely essentially on intuition that is seldom informed by theory. Political economy, of course, is an attempt to move past these limitations. Political economists tend to study powerful economic actors who can influence prices. Realists, like Gilpin, focus especially on state actors while recognizing the increasing influence of global investors, multinational corporations, and NGOs. Political economists would take particular note that economies are embedded in social and political systems where the purposes of economic activity are decided. One society may use its wealth to build a fairly egalitarian welfare state; another might use it to develop military might, and a third might concentrate wealth in the hands of a small elite.
   
   One of the striking features of the international economy is that "free trade has historically been the exception and protection the rule," even though the benefits of free trade have persuasive theoretical and empirical support. Trade liberalization increases domestic competition, thus increasing efficiency and consumer choice. It increases both domestic and global wealth through the gains from specialization, and it encourages the diffusion of new technology throughout the world. Gilpin cites several reasons why, in the light of these benefits, protectionist ideologies usually hold sway. First, while the principle of comparative advantage tells us that both parties to an exchange will benefit, one party may benefit more than the other, and nations can and do worry about relative benefits. Second, economists support the use of protection for infant industries that can later become competitive. Unfortunately, there is no way other than trial and error to identify these future winners, and temporary protection often becomes permanent. Third, trade benefits do not accrue to all members of a society equally. Fourth, trade creates interdependencies between nations, while nations try to preserve their autonomy and freedom of action.
   
   Gilpin examines the problem of uneven development and, in particular, asks what role the state might play in accelerating development. After an extended discussion of the debate over the "development state," Gilpin concludes that states have an important role to play. Development requires a transformation of society, and states can facilitate that transformation by investing in the health and education of their citizens, socializing them, and providing public goods like physical infrastructure and economic institutions. There is also evidence that government investment in research and development has positive effects for domestic industry.
   
   Gilpin also describes the "machinery" of the international monetary and finance system in detail. All but the most expert of readers will find some new information here.
   
   I have to say that I enjoyed this book tremendously. Gilpin has an exciting story to tell, and he writes clearly, with a degree of elegance of expression and restraint.



4. Globalization, as a word, is not very specific. The world may be globalizing, but what specifically does that mean? Furthermore, there is no shortage of competing ideas about the role and effects of globalization on the world economy. Getting to the truth of the matter requires going back to the basics of economics and politics, which is what the author attempts to do. He gives a primer on neoclassical economic theory, new economic theories, the global financial markets, international trade, multi-national corporations, and the ideal role of the state in economic development. Gilpin is by no means a socialist. He believes in the importance of free trade and in the optimizing qualities of the market, but he also acknowledges that the state has an important role to play in economic matters, and that this role is often downplayed in classical economics. I highly recommend this book. I read it for a class, but I really enjoyed it. In terms of quality, it was head and shoulders above the other books we read for the class. I would highly recommend this to any of my friends as a great overview of how politics and economics interact on a global level.



5. Mr. Gilpin's Global Political Economy is right on reflecting factors which impact global commerce. The text puts in perspective economic concepts that are the driving force behind changes that are making a differnce. A must read text for understanding global management. The straight forward style makes it is easy to digest.

5 comments about Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages.

1. This book is a must-read. As someone who has been involved with computer/networking technology for over 30 years and high-tech finance for more than 20, I'm confident that there is nothing that surpasses this work in capturing the times in which we live. This book is simply a modern classic.
   
   With this book in hand you will find yourself saying, "How could anyone have missed the Internet 'crash' of 2000?" Of course it had to happen. Then you will be asking yourself, "When will we get past the frenzied hype about these technologies so we can finally make all this really useful?" Just as Perez has been asking.
   
   Throughout the 1980's and 1990's as a Wall Street analyst following technology companies, I regularly polled economists about the impact of computers and networks. At first there was no response. Later, we all began to hear about the "New Economy" and how everything had completely changed in economics. Yes, this was a pretty transparent attempt to rationalize stock valuations that had gone into orbit. In many ways it was even worse than no response at all.
   
   It wasn't until I read Technological Revolutions and began to look into why mainstream economists have had so little to say about technology, that I learned there was a fight over all this in the 1930/40s. Many were involved but Harvard's Joseph Schumpeter who authored Business Cycles in 1938 putting technology at center stage- was among the losers. Future generations of economists rarely delved into Schumpeter's heterodoxy. Fortunately, Perez revives the Schumpeterian tradition with a powerful reinterpretation and combines economics and technology with a clear and convincing voice.
   
   History is a pattern, not an endless repeating cycle but a distinct and discernable pattern. Perez has given us the outlines of that pattern, making all our jobs a great deal easier. Whether you're in the technology business or in finance or policy or just trying to make intelligent choices in a complicated world, you will benefit and learn from this book. What comes next is going to be important, on many levels, and understanding that in the past others successfully faced similar challenges - not just once but with each technological revolution -- should help to give us courage to face our own.



2. This is a really terrific book. It provides a very thoughtful treatment of the big picture of large technological innovations like the rail road, autos, and the internet.
   
   It is especially good for thinking about the linkages between technology and financial markets- again on a macro picture.
   
   Having said that, it does seem like a straightforward application of Schumpeter to some historical events. Furthermore, there is almost no evidence to support the theory.
   
   Despite this serious qualification it is a thoughtful book. Another book I would recommend as a companion to this is Frenzy, by Carl Haacke. The two would be a perfect if not essential combination. Frenzy, is more of a micro picture and much more complete with both data and interviews to put the framework in perspective.



3. I think I've read almost all the books written on the long-term dynamics of technology. Most of them are quite predictable -- a long list of important inventions. This book by Carlota Perez is different. It is one of the most interesting histories of technology, if not the most informative, because it dwells on the dynamics of the technology/social/economic system itself. It takes a decided cybernetic view of technology by demonstrating that technology is a very large system that progresses through "paradigms." And like paradigms in science or the humanities, paradigms in technology exhibit step-like bursts of normal advancement punctuated by revolutionary change. This long cycle of ordinary improvement capped by rapid cataclysmic change and marked by the inevitable bubble phase and then productive recovery has marked all cycles of technology in the last two hundred years. That's Perez's thesis, and the book is very thorough in making a case for this.
   
   Most tomes with theoretical goals like this are horribly dry, dense, wordy, and well... boring. This book is not. Perez writes with amazing vigor, and grace, not taking an extra unneeded word, and not repeating herself.
   
   I tend to shy away from theories that depend on believing in long cycles or recurring forces, but in this case Perez has persuaded me that this cycle in technology is real. I am delighted by this surprise. According to theory laid in out TECHNOLOGICAL REVOLUTIONS we, in 2005, are in the last throes of a technological bubble and just preceding the next period of productive improvement and profit from the disruptive technologies in the 1990s. In other words, instead of the bubble signaling the demise of these recent technologies, it's really saying, we ain't seen nothing yet.
   
   Perez is a careful scholar, but also a gifted communicator. Most importantly, she is an unorthodox thinker. This book is delightfully against the grain without being a bit flaky. It's radical influence is most evident in the small world of economic historians and macro economists who recognize its import. But, like a great many other seminal books, it is easily read by anyone truly interesting in how technology works.



4. There's a good reason this book costs almost as much used as new: Nobody who has read it wants to give it up.
   
   As a writer on technology who often struggled to put the Internet bubble and bust into perspective, I found Ms. Perez's explanation of the path that technological revolutions take profoundly illuminating. It was especially useful for me in stories that I wrote because I could cite historical precedent to counter both the overheated initial expectations about the Internet's impact, as well as the overwrought backlash that assumed the dot-com bust meant the Internet would never amount to much.
   
   History is not destiny, of course, and one can't slavishly follow the timing of past revolutions to determine exactly where we sit in the current revolution. But as I try to follow the evolution of various Internet technologies, I find myself constantly thinking back to the patterns that Technological Revolutions and Financial Capital lay out to put what I'm seeing today in context.
   
   Anyone in technology, business or public policy needs to understand the dynamics revealed in this book.



5. Carlota Perez provides historical evidence to show how technology cycles are created and driven by financial capital. This book is immediately relevant to technologists and investors.

1 comments about The Complete Idiot's Guide to Global Economics (Complete Idiot's Guide to).

1. What a neat guide to international economics! The authors have done a fine job in making what is often a complex and confusing subject very understandable, but without sacrificing the level of detail in explaining the underlying economic theories and institutions. This would be a good choice for a student returning to school for MBA program to get up to speed on the workings of the global economy. It would also come in handy for a manager or professional who needed a deeper understanding of global economics as part of his or her job.

5 comments about The Coming China Wars: Where They Will Be Fought and How They Can Be Won, Revised and Expanded Edition.

1. China has over one billion people and the largest military in the world. Now in a newly revised and significantly expanded edition, "The Coming China Wars" is a discussion of what many politically savvy Americans fear, something that may or may not be inevitable - war with China. Explaining the root problems of growing conflicts between the United States and China, yet with the optimistic message that there is still hope for civility and friendship between the two, "The Coming China Wars" is surprisingly scholarly and a must for anyone concerned about America's greatest potential military threat.



2. This book is a most informative book detailing the causes of the massive changes taking place in the western world today through the agency of China. China is affecting everyone. A must read book. Wayne Butcher



3. "The Coming China Wars" by Peter Navarro is probably one of the most advertised China-related books this year. For weeks it nailed the small Adsense box on my Inside-out China blog (apparently Google did a good job of matchmaking), and I got so tired of seeing it all day everyday that I deleted Adsense. The book thus made my blog ad-free.
   
   The question is whether it is worth the advertising money or a reader's time.
   
   In all fairness, this book does highlight some extremely difficult problems that are facing not just the United States, but the entire world. Resource, especially energy shortages, environmental degradation, the threat of international conflict and widespread poverty and inequality are very real and very serious issues.
   
   It is strange, though, that Navarro would attribute so much of the cause of these to China, given that all of these issues have been pointed out again and again by many people since the original publication of The Limits to Growth in 1972. Certainly at that time nobody was expecting that China would be what Navarro repeatedly calls "the world's factory floor."
   
   What is true about China, is that it has been remarkably fast in its track to catch up to the United States. Again, at least since 1972, people have asked the question "what would happen if everyone in the world had the consumption habits of the average American?" Now, with the world's most populous country about ¼ of the way there, perhaps the answer is clearer, and it is certainly frightening. With India, and other countries in Asia, also getting ready to rocket ahead, stopping China in its tracks, as this book admonishes, even if it were possible, is not a good answer.
   
   The world is faced with some real tough times and some very creative solutions are going to be called for. Telling people in China, or any developing nation, to give up getting rich quickly is much like telling American's to give up 80% of their wealth. It generates anger and outrage, but doesn't accomplish anything. The book recommends a very serious effort by the United States government to deal with energy and environmental issues. That is laudable advice, but the American centric focus is not productive. The things being talked about above are global in nature and no single country can carve out a solution in isolation. There is a strong need to cooperate and share human and information resources. More importantly, and this will be very difficult indeed, huge investment by developed countries into developing countries may be the only viable solution. Unfortunately, the book does not provide any useful suggestions for progress on these issues.
   
   It has always amazed me that the people who are most critical of China are precisely those that don't seem to be able to break from the one literary form perfected under Communism. "The Coming China Wars," with the exception of the last chapter, reads very much like the official texts I recited as a child during the Cultural Revolution. No tarnish or impurities have been introduced in this Made in America diatribe against the horrors of the red enemy in the east. Chapters open with quotations from, usually, respectable people or publications, then continue on in declarations that are not backed by any evidence. Presumably the quotations were imbedded in writings that did contain evidence, but Navarro dispenses with that.
   
   In keeping with this form, little that is said in "The Coming China Wars" is explicitly false, it is simply somewhat twisted in its logic. If America does something it is good. If China does something it is bad. It matters little what the thing is, or if it is the same thing. I got a real kick out of the statement: "Whereas the United States focuses on ensuring the security of the international oil market, China has adopted a 'bilateral contracting approach' in which it seeks to lock down the physical supplies of the oil-producing countries." That focus on ensuring security is probably not apparent to most people living outside the United States. And of bilateral agreements, it is best not to forget the Shah of Iran and the response to his ousting that brought Saddam Hussein to the forefront.
   
   If you are going to read the book anyway, you'd be better off skipping the first eleven chapters and going straight to the 12th. After struggling through the text, the last chapter seemed like a breath of fresh air, but it is only in comparison to the rest of the book.
   
   What the last chapter contains is a sequence of policy recommendations that, though rather twisted in their presentation, do have some coherency. To save you a little bit of pain, let me summarize them here:
   
   * Consumers should shy away from products made in China and let retailers and manufacturers know that they are doing this.
   * People should pressure government officials to get serious about dealing with issues related to China.
   * Businesses should diversify manufacturing away from China and increase quality control on products made in China.
   * As a nation the United States should learn to live within its means which means not running a trade or budget deficit.
   * The federal government should
   
   1. Push for strict adherence to the principles of free trade.
   2. Pass laws making currency manipulation strictly illegal.
   3. Prosecute to the full extent of the law anyone involved in piracy or counterfeiting and closely monitor internet sales of pharmaceuticals.
   4. Increase the inspection of foods and pass laws to increase accountability for any tainted products.
   5. Undertake a massive program to remove the dependence of the US on foreign energy supplies.
   6. Condemn China for its abuse of veto power on the UN Security Council, then remove China as a permanent member of that body.
   7. Increase spending on programs such as the Voice of America and do more diplomatic work abroad.
   8. Agree to strict carbon controls and impose a corresponding carbon tax on all products regardless of country of origin.
   9. Prohibit US companies from working with Chinese authorities to identify internet users.
   10. Pay more attention to Taiwan and pressure China to decrease its nuclear arsenal.
   11. Increase the budget spent on counter espionage.
   12. Increase NASA's budget and focus funding on private space ventures.
   
   This was not really put forward as a 12 point plan, but all that expanded spending does seem appropriate for a campaign year.
   
   I have, of course, saved the best policy recommendation for last. This actually falls under the heading of what voters should do and it is:
   
   * "Help spread the word! Give your copy of The Coming China Wars to a friend, or donate your copy to your local library."
   
   And such self-promotion is not out of character with the rest of the book. #
   
   (Xujun Eberlein is the author of Apologies Forthcoming)



4. It is hard to take this book seriously. It is a rant in language calclated to engender rage and despair among American readers, particularly those affected by competition with China. Allegations are, however, unsupported by numbers and facts. Quotations are identified only by the name of the source, hence cannot be checked. Very little consideration is given to the most dangerous source of possible warfare, the conflict over Taiwan. There are no references for each chapter.
   Navarro may have a following among some investors and businessmen. This book does him no credit, and surely does nothing for his reputation as an analyst of international affairs.



5. I picked up this book while passing through LAX. While in flight, I was surprised and quite frankly, annoyed that the book-- supposedly written by a professor at UC Irvine's School of Management-- had no bibliography; no references; was shoddy in terms of quality; resorts to polemical diatribe in arguing that China is a problem.
   
   The sad thing is, there are legitimate reasons for which we rightly ought to be concerned about not so much the rise of China and other countries, but the demise of the US industrial might. Just the other day, Ford and GM's stock tanked, yet again, and the Fed is pumping money into the US auto industry now to prop up our ailing-- failing-- economy.
   
   It has been a long time coming that our misguided policies over the past sixty-years (since the death, essentially of FDR) have finally led to the bankrupting of our economy. With the Fed now printing money left and right, it is not so much the Chinese we need fear, but those "enemies within" (enemies domestic) such as the author of this book whom we need to guard against. For people such as they go on perpetuating the myth that we have done nothing to bring these disasters upon ourselves, while insisting, instead, that it is everyone else's fault.
   
   For the most part, the book itself should be dismissed, but the general premise on which it is written-- is this rising competitor, China, a threat to the US? In the face of our declining economy and moral authority we need to learn to ask the right questions of what actually has led to the decline of US power in the global arena. That will in turn lead to the right answers and help us gain insight as to why there have been all these "missteps" over the years to counter-- feebly at times and fearmongeringly in other instances-- the deleterious effects of our own policy fiascos.
   
   
   Indeed, if ever there was a clear and present danger, it surely would be a book such as this. For lousy scholarship is the bane to the existence and continuation of our Republic as it obfuscates the truth and keeps us from critical self-examination. When we pay homage to such fears as may be stirred up by this kind of jingoistic pseudo-scholarship, it tends to lead to blind obedience and amounts to no less than an intellectual cop-out and in this case, industrial suicide of the assisted kind. For a people too lazy to think for themselves will always blink in the face of fear and be led down the primrose path by yet another Pied Piper, another Hitler rising up from our midst.
   
   Percy Bysshe Shelley wrote:
   
   Obedience,
   Bane of all genius, virtue, freedom, truth,
   Makes slaves of men
   
   
   We know better and are better. The battle fronts here in our midst-- poverty of body, soul and mind; paucity of well-thought through policies and sound practices; practically non-existent leadership at virtually all levels; and failure on the part of both politician and body politic alike to preserve, protect and promote the Constitution and our most sacred values and ideals... the list goes on.
   
   The sooner we learn to exorcise trash, PR and propaganda from our midst, the better prepared will we be to face the challenges that await us, as that will lead to the long-suppressed exercise of our freedoms and intellect, which in turn will usher in a new era of awesome creativity, the onrush of new solutions to age-old systemic problems. The result will be no less than a cultural renascence in which the arts, not pop culture, will flourish and free us from the bondage of our fears, ignorance and prejudices. It will be the rising tide that lifts all boats and spirits, an up swell that is the expression of all our pent-up, welled-up aspirations and frustrations as a democratic republic eager to live up to her noble character. We must first confront our ghosts, goblins and skeletons before going on a witch hunt or go looking for a bogeyman. Our enemies at all times have been both foreign and domestic; it is high time we recognized which is the worser, else we will be swallowed up, not by the Chinese, but by our own demons.

5 comments about When Corporations Rule the World.

1. How corporations developed and expanded their power and influence; how they operate today; and what the stakes are for individuals and states as a new form of governance and administration consolidates its power worldwide. Well-written and compelling. The political issue no politician (except for Ralph Nader) dares to acknowledge, much less confront.



2. Great to read through. Some good brain food. But the solutions he espouses are reminiscent of some 1970's feel good scenario.



3. I can't say enough about When Corporations Rule the World. Everyone in the US especially should read this book. The mega corporation has changed living in this world to the detriment of all mankind. When there exists an entity, whose sole purpose is to make money to perpetuate itself, and it is put in charge of such delicate matters as healthcare (private insurance- among other sectors), it is a no-brainer that human beings lose time and time again. People in the US and around the world don't realize how deep a hold corporations have over their daily existence. They also do not realize the power that we as a people have to break this hold if we act in concert for the good of humans and the environment on which we depend for our livelihoods and health. That we have GIVEN power away to coporations and the people that run them, is a sad commentary on the human state of being. We MUST ACT now to fight against corporations. START NOW BY READING THIS BOOK!



4. "When Corporations Rule the World" is thoroughly documented and very accurate.
   David Korten describes the many tentacles of global corporations. He examines the details surrounding the case of Santa Clara County v. Southern Pacific Railroad as the beginning of corporations receiving the same rights as individual citizens.
   
   He covers the rise of corporate power in the 1880's and 1890's. President Rutherford B. Hayes observed- "This is a government of the people, by the people, and for the people no more. It is a government of corporations, by corporations, and for corporations."
   
   The author assesses the "free" market and "free" trade as instruments that allow global corporations to plan and organize world economic affairs to enrich themselves without any consequences regarding the environment or workers.
   Mr. Korten explains why capitalism favors the limited liability corporation. It provides unlimited, concentrated power with very limited accountability or legal liability.
   He favors corporate charters because there is accountability. Charters are a priviledge rather than a right.
   
   Mr. Korten examines the flawed projections that served as propaganda for NAFTA's passage. He emphasizes that while government shares some of the blame, the "giant corporations that owe no allegiance to place, people, or human interest" are the benficiaries.
   From page 133- "The game of global competition is rigged. It pits companies against people in a contest that the people almost always lose."
   Another accurate view on page 207 states- "The argument that globalization increases competition is simply false. To the contrary, it strengthens tendencies toward global-scale monopoly."
   
   The author explains why GATT and the WTO are bad for the general public, great for global corporations. I disagree with his idea of keeping either the U.N. family of organizations or the Bretton Woods group. Why not get rid of them all?
   
   His take on the China trade agreement was on point. The day after Bill Clinton signed the China trade agreement the Wall Street Journal "noted the real reason the corporate establishment put it's full lobbying weight behind the China Trade Bill: to guarantee that U.S. companies could safely move more production to China with assured access to U.S. markets." Does anyone else remember the Chinese campaign contributions to Clinton?
   
   The author has some intriguing solutions in the book. His idea of eliminating income tax on the lower income levels is one positive step. However I don't agree with some of his ideas. Guaranteed income is one of them.
   
   
   "When Corporations Rule the World" is a sobering assessment of corporate greed that respects no borders. While it is somewhat dated, I recommend it.



5. You know, sometimes the synchronicities of my life amaze even myself. Here I started reading this book "When Corporations Rule The World" by David Korten, and all of a sudden, the US economy tanks and all sorts of corporations and banks start going under faster than Congress' credibility. And sure, we all had been watching it happening for awhile, being built up inside yet another unsustainable bubble and driven by mass speculation and corruption as it was, but the really big piles of fecal matter hit the air circulation devices in late September/early October . . . right as I was reading this book. (A few years ago I had written another review for the book "The New Pearl Harbor" by David Ray Griffin, about 9/11 and the Bush administration . . . right as the so-called "terrorist" attacks in Britain occurred.)
   
   Why is this synchronicity important? Well, Mr. Korten has revealed some really pertinent information in this book that, quite frankly, has a lot to do with said situation. He wrote the first edition back in 1995, and it is now considered a classic. The whole book might as well be a Cliff Notes reader for the economic "disaster" and "bailout" happening at this very moment. In fact, check out this quote from page 188: "Speculation is another form of extractive investment. The financial speculator is engaged in little more than a sophisticated form of gambling - betting on the rise and fall of selected prices. When a speculator wins, he or she is simply capturing claims to wealth created by others. When a large speculator funded with borrowed money loses, the survival of major financial institutions may be placed at risk, resulting in demands for a public bailout to save the financial system from collapse. In either instance, the public loses. Rarely does a speculator's activity contribute to the wealth or well-being of society." Seeing as how Congress and the Bush administration have simply put the proverbial band-aid over the crack in the dam, and yet again sold their souls to corporate rule rather than fixing the system that actually FED the troubles (pardon the pun), methinks David Korten is presently shaking his head and saying "I told you so."
   
   I highly recommend this book. Part V ("Reclaiming Our Power") and Part VI ("From Corporate Rule To Civil Society") offer fantastic, practical and empowering ideas on how the people can take back the power that was stolen from them by the corporations. As an example, he suggests we start by stripping the corporations of their "personhood" that was essentially given to them with the 1886 Supreme Court decision of Santa Clara County vs. Southern Pacific Railroad. This is the reason we have lost so much of our political power - the fact that corporations have the same citizens' rights as do the citizens (and of course, we all know they actually have MORE rights since they have more money.) He is not shy in saying that the source of troubles in the world (economic, political, and environmental) stem from the unrestrained clout and muscle held by corporations and "predatory capitalism." He also emphasizes the importance of the anti-WTO protests in Seattle in 1999 and even suggests massive decentralization of governmental powers.
   
   This is a most timely review. More importantly, it is a most timely book, one that is sure to enlighten the reader with necessary, alternative views of the current economic situation.

5 comments about Plight of the Fortune Tellers: Why We Need to Manage Financial Risk Differently.

1. Rebonato challenges the "frequentist" approach to probabilities employed by stock analysts and rating agencies and finds lots to worry about. He says that although looking back at the past gives you masses of data that can be parsed and analyzed lots of different ways, it gives a dangerously miselading sense of security that future probabilities can be systematically determined with great prescision. The problem is that that whole thing is based on the idea that market moves are like coin flips, or monte carlo simulations, which say that while market prices change and fluctuate, that their underlying structure never actually changes. In fact, the probablities that really count are the those in the future, not those of the past. To predict those you need to understand what Rebonato dubs "subjective probability" - which while much more qualitative as opposed to mathematical, can actually be much more accurate and predictive. This is well worth thinking about, and is clearly explained for you to make your own judgment.



2. This book is one of the many that have come out in the last few years that has addressed the virtues and vices of financial modeling. Many of these books are devoted to the proposition that modeling has caused deep problems in the financial markets, but the evidence they present for this assertion is typically very weak. Considering the scale of modeling in financial institutions throughout the world, it would be naïve to assume that modeling has not influenced the markets, but it would also be unjustified from an empirical standpoint to say that modeling has been the predominant influence in market degradation. But if one believes that modeling has played the major role in this regard, then there will be a strong temptation to seek alternative methodologies for optimizing the risk/return trade-off.
   
   The author is one of these, as can be ascertained early on in the book where he refers to data as giving "power to actions and decisions." However, the author is aware of the problems with the misguided imputation of power to concepts or ideas that are applied to contexts that are extremely rare in human experience. Thus he devotes several pages of the book to the "frequentist" interpretation of probability, and offers the Bayesian alternative. This is not to say that the frequentist approach should be completely discarded, for he discusses contexts where it is appropriate. One of these concerns the need for say a 99.9 percentile in some implementations of the Basel II accords. Such a level of confidence will be very problematic from the standpoint of validation given the paucity of real historical data. The author also offers suggestions for how risk managers are to clean up their act in the final chapter of the book.
   
   He also discusses the possible use of belief theory in risk management, but apparently he is not aware that this approach has been tried in some contexts. In fact, this reviewer has applied some of the concepts from belief-theory to the problem of mortgage-broker scoring. Belief theory even has a "belief calculus" that has been applied to the modeling of financial portfolios, with the goal of learning how the returns change as new information is obtained on the factors that impact the portfolio. The belief calculus is similar to what is done using Bayesian networks, but with belief functions used to model the dependencies in the factors. Belief theory abandons the additive principle of probability theory, in that the 'belief mass', or "degree of belief" that is assigned to certain sets does not have to sum to one. However, belief functions is that they can be expressed as a probability using the so-called 'pignistic transformation', but one will obtain a loss in information if this is done. The author asserts that belief theory is a viable methodology, in that one's "confidence" that a certain event or number of events is about to occur is expressed by the willingness to "bet on" that event or events. But "credo" is Latin for "I believe" and "pignus" is Latin for a wage or bet, and certainly in everyday conversation one frequently hears "it is my belief that this will happen....I would bet a month's wages."
   
   There is no arguing that decision making is the real essence of risk management, but does this have to involve subjective judgments, as the author seems to imply, or can it be done by a suitable collection of algorithms that are sophisticated enough to deal with most contingencies? If so, could this be taken one step further and allow the decision-making process to be automated, possibly using intelligent machines? Given the advances in artificial intelligence, this scenario is getting more plausible. But in all approaches to risk management, whether automated or not, one must still answer whether the human or machine estimation of probabilities of events is meaningful and how to assess if this is the case. Will this involve the use of traditional statistics or will some other approach be used?
   
   Prospect theory, also discussed in the book, has certainly been a useful paradigm in risk management, to the degree that it has been utilized. But indeed how can one really know what concepts or methodologies are actually being employed by senior risk managers? In many cases, the analyst or modeler makes assumption that the management is using the results of the modeling efforts, but instead the management is relying on intuition or guesswork to make risk decisions, and completely ignoring the data from the models. In addition, distinguishing the impact of decisions based on modeling versus those based on intuition is more difficult than is realized at first glance.
   
   Another important point to make here is that the Bayesian approach to the calculation of probabilities may not be part of the model itself, but frequently plays a major role in the validation and empirical support for the model. A similar situation occurs in other fields, such as physics, where Bayesian calculations permeate experimental confirmation of theories, but where the theories are stated in a frequentist framework.
   
   Given the extreme events in the fixed-income sector at the present time, it is difficult to argue with the author's claim that financial risk management must be done in a different way. In fact, just this month a popular technology journal referred to a meeting of a couple of hundred of the more well-known financial modelers, who declared the summer of 2007 to be the worse ever for financial modeling. So the author is not alone in his opinions. But due to bureaucratic inertia and resistance from the status quo, finding the right time to implement these changes can be problematic, even when there is unanimous agreement that these changes are necessary.



3. In my opinion this is the most valuable book on investment risk management of the past few years. Yet, no equations! However, with cogent arguments and literate prose, Rebonato lays out a case against the unfortunately prevalent misuse of statistical models in risk management.
   
   Second edition should fix the minor annoyances, like "manger" for "manager" (appearing several times) and "form" for "from" (ditto), but the content should be read by everyone with interest in the area.
   
   Especially welcomed are his arguments. Rather than setting up straw swans and knocking them down, or simply labeling alternative views as offensive or idiotic, he carefully sets out deep background for thinking about risk, and for thinking about probabilities, then shows how and why the well-meaning (and useful in the right context) VaR ideas are on a trajectory that is likely to go horribly wrong.
   
   What to do? Unfortunately, the problem is hard and there are likely no easy solutions. But thinking correctly (my word) about the problem lets us roll up our sleeves and work on the right parts of the problem.
   
   Investment management is all about risk management. We want to understand the risks in front of us, accept the risks we think we can get paid properly for, and avoid the ones where the bet is not in our favor. The Rumsfeldian "unknown unknowns" are the ones that are likely to cause the most damage. Those are what should keep us up at night trying to imagine. If they become "known unknowns", e.g. liquidity and linkage risks which showed up July/Aug 2007, we can get to work understanding and managing them.
   
   Best (financial/investment) book of the year.



4. The main theme is that risk management is not about measuring risk, or assessing probabilities, but it is about making decisions under uncertainty. The author says that the existing framework of risk management, which is heavily based on "frequentist" approach to probabilities (i.e. repeatability under identical conditions, weak prior beliefs, etc.) does not necessarily serve for decision-usefulness associated with managing risks; "subjective" (Bayesian) probabilities tend to be better suited to the purposes. Focusing on the outcome of decisions relieves us from dogmatic probabilists and allows us eclectically to arrive at the best prediction we can, using whatever tool we have at our disposal. While the author's argument appears to make a lot of sense, the Bayesian probabilities brings in subjectivity such as prior information/knowledge, which in itself seems helpful, I wonder what if we are not confident of such prior information, as we cannot know what we cannot anticipate (i.e. an "unknown unknown": an uncertainty that is unanticipated)? Or put it differently, if we already have had good, reliable prior information about whatever the risk we attempt to assess, then, we would not have much to worry about to begin with, I presume..... Well, we probably should not try to rely on statistical approach to such an extremely high percentile to be considered effectively meaningless (I hasten to throw in my disclaimer here that I am not proficient enough in statistics to discuss the matter in detail!)
   Those who have found Nassim Nicholas Taleb's "The Black Swan" and "Fooled by Randomness" fascinating would be intrigued by this timely, engaging , and highly accessible account, which provides not only professional risk managers but also amateur investors like me with numerous insights.



5. I have long like the insight of Bernstein, doctor turned author. If you like understanding how world business evolves on a very long time scale, then you will like this book. The adage that history repeats in cycles is driven home. Globalization, trade imbalances, plagues, and power struggles all occurred many times in the past. Some groups benefited; some didn't. Read and heed!

5 comments about The Competitive Advantage of Nations.

1. 
   "The Competitive Advantage of Nations" gives insights into why and how industries, regions, nations or some social groups thrive or fall short. The book explains and presents the theory on the sources of sustained prosperity in the contemporary worldwide economy. This seminal work has assisted countries to develop national policy based on their international competitiveness.
   
   Porter methodically and systematically discusses why some nations achieve continual economic prosperity. He explains the roles of governments and companies in economic development. The author shows the distinction between competitive advantage as a source of wealth and the concept of comparative advantage which had been until recent years the paradigm on thinking about international competition.
   
   Porter based his research in 10 leading trading nations. The book introduced the author's "diamond" which is a new way of looking and comprehending the competitive advantage of a nation. His concept of "clusters" or groups of interconnected firms, suppliers, related industries and institutions in certain locations opened a unique way for organizations and governments to look at economies and assess the competitive advantage of locations and set public policy.
   
   This weighty tome is recommended reading for entrepreneurs, business executives, policy makers, economists and other readers who are interested in ensuring that companies can successfully face the future based on pragmatic assessment of how the firm can gain competitive advantage.



2. Recently pick up the book by lecturer recommendation, although its dry & boring with huge massive information but open up my mind and keep question the assumption in today market.



3. One of my favorites titles. I started my experience about Porter's Competitiveness by this book.



4. Will a firm that exports finished manufactured goods make more money than a firm that exports raw materials?
   
   The Raw Material depression that hit Latin America cause a massive deficit in the 1990s. Decreases in raw material commodity prices contributed to the increasingly large trade deficit with Japan. The US bought electronics and automobiles from Japan and Japan imported US agricultural. The continue drop in US agricultural commodity price accelerate the trade deficit.
   
   Every nation specializes in specific SIC code domains. US refrigeration and cooling domains as companies like Trane and Carrier establish position and global market share . Latin America could hold the key to removing US trade deficit. The US exports finished goods to Latin America, Wheat, Soybeans, Rice, and Corn to Brazil. Brazil consumes large quantities of US products, acquires easy credit, and the trade deficit shrinks. Local protectionism can not compete against global market price. US ethanol price drive demand for corn and wheat. The US imports biofuels and wood products. Commodity demand booms and a rise in commodity prices occurs. Government regulation attempts to soften fluctuations in commodity prices and appease local demand. Short term relief is possible.
   
   Decreased regulation, removal of trade barriers, and lower taxes help global firms become more competitive. Lower corporate taxes provide more foreign investment. The growth of firms will be associated with increased investment opportunity. Lower taxes help reduce the risk associated with return on investment burdens.



5. I once read an article by Michael Porter called "Strategy and the Internet". In it the author argues against mainstream ideas such as "the internet will change everything in businesses". I did not necessarily agree with the author, but its good to read something critical of popular ideas once in a while. This is why I bought this book, and the author did not dissapoint. Michael Porter challenges alot of "facts" in this book and does a good job. The book is very rich with information and is easy to read. The author picks countries from both the rich world and the developing world. My only problem is that he didnt chose China or India. I think if he was writting the book now he would have definately chosen both of them, but even so, they would have been a goodchoice 30 years ago, I think. Its very challenging to write about "the rise and fall" of economic advantage as a general theory, but the author did an excellent job. I would recommend this book to anyone interested in economics or business, but I dont think socialists will like what they read. The author clearly states that there is a role for the government to play, but not the sort of role communists have in mind. Infact he strongly argues that any interference the wrong way would destroy a nations advantage.

5 comments about The Chastening: Inside The Crisis That Rocked The Global Financial System And Humbled The Imf.

1. In Globalization and Its Discontents, Joseph Stiglitz claims that the Asian crisis could not have been achieved by market speculators and corrupt politicians alone: it required the involvement of economists, and more specifically of that breed of economists who populate the corridors of the International Monetary Fund, an institution charged with maintaining financial stability and extending credit to countries facing crises.
   
   Although not a professional economist, Paul Blustein provides a more balanced account. Instead of invoking arcane theories and denouncing other people's incompetence to make his point, he sticks to the facts and reconstructs the story of the Asian crisis as people experienced it on the frontline. His most fascinating pages are when he follows IMF economists on rescue missions, from Bangkok and Jakarta to Seoul and back again. You can almost smell the sweat emanating from those figures uniformly clad in white shirts and dark suits, envision the nights spent working on spreadsheets in air-conditioned hotel rooms, feel the tension that reigns once the team has unearthed some unsavory data, witness the embarrassment of the authorities who are asked to spill open their books and confess their best-kept financial secrets, imagine the relief when things fall into place and the program proposal is ready to go to the executive board for approval.
   
   One should not pity IMF economists. They live in poshy Washington, fly business class, stay in five stars hotels and, although they envy the paychecks of their Wall Street colleagues, manage to lead an international bureaucrat's life with a banker's salary. But one also has to acknowledge their high professional standards, their devotion to their tasks and their sense of discipline that contradicts the adage that economists can never agree with one another (remember Winston Churchill, who remarked that "if you put two economists in a room, you get two opinions, unless one of them is Lord Keynes, in which case you get three opinions.")
   
   Here is how IMF staffers are perceived by their colleagues from the World Bank, a sister institution located right across the street in downtown Washington:
   
   "Economists from the World Bank, who sometimes work in joint missions with the IMF, express awe at the almost military manners in which Fund staffers defer to their superiors. This protocol is in stark contrast to the code of conduct at the World Bank, an institution devoted to long-term development loans, whose economists or irrigation specialists or environmental experts might embark on a lively disagreement right in front of, say, a borrowing country's deputy finance minister. When an IMF mission enters a room to conduct a negotiation, it is often easy to tell who ranks where; one World Banker likens it to "a mother duck leading her baby ducks." The mission chief typically sits in the middle of the table and does most of the talking, allowing immediate subordinates to chime in on issues requiring their specialized expertise; lower-level staffers are likely to remain silent."
   
   Four year after its publication, the book still makes an interesting read. It could have been adorned with a more telling title (the "chastening" refers to the jacket of the hardcover edition which shows the IMF pilloried with a dunce's cap, as well as to the sense of awe when faced with the recurrence of financial crises that should chasten us all of any sense of complacency). It would also have benefited from the inclusion of a few pictures, and especially that famous snapshot that shows IMF Managing Director Michel Camdessus standing, arms crossed, looking down at President Suharto as he signed the revised multi-billion bailout package that was to provide a short respite to the country as it spiraled into chaos. A tell-tale picture, indeed.



2. 1997, S Korea banking system was on the verge of collaspe, as result of violatile banking practices that had destabled the financial system threating the 11th largest economy of the world and created the possibility of financially crippling long term companies like Hyundia, Samsung, and Daewoo. At the time the IMF began analyzing S Korea's financial condition, S Korea bank reserves stood at $24 billion. IMF's, Neiss had no idea how close the S Korean banks were to default and when Neiss arrived in S. Korea the reserves had already fallen to $9 billion and dropping $1 billion a day. Foreign banks were demanding payment on loans come due and the practice of routinely extending payments month after month was canceled causing a massive amount of money due. The short term debt to foreigner was $20 billion. Foreigners on the currency exchange were dumping the won for the dollar and investors were executing a massive selloff of Korean stocks and bonds. When Neiss arrive S Korea was within a week of default. If S Korea defaulted, the default could cause a long and crippling cutoff of loans and neighboring Asian countries might also fall into default and investment confidence could be shattered globally and the world fall into a global recession. The S Korea economic collaspe affected the US economy; in 1998, the bond market ceased to function as a provider of capital to the world; the fed was forced into sharp cuts in the interest rate, but the fed could not tame the savage beast of the global market. The global market beast was enormous. Foreign investment in the selling and buying of stocks and bonds and other securities had reached $17.3 trillion by 1997.
   
   Neiss envisioned three responses to the crisis: 1. acquire a short term loan from Japan 2) gain permission to pay foreign loans in bonds rather than cash 3) stem the panic by showing the market that S Korea banks had plenty of cash. The IMF bailout infused $55 billion and $21 billion from the IMF. S Korea promised to cut budget amounts, raise interest rates, shutdown ailing financial institutions and close the doors, eliminate government direct bank loans, and allow greater freedom for foreign investors to buy stocks and bonds. The IMF bailout followed by a crash in the currency and economy of S. Korea. Financial credibility damage had occurred. IMF bailouts pattern of crashes after loan approval occurred with Thailand ($17 billion loan), Indonesia ($33 billion loan), Russia (1998 - $22 billion loan), and Brazil ($44 billion bailout loan). IMF bailout meant higher interest rates cooling fast growing economies. When a country fails to meet the target goals of the IMF, the IMF blames the government of the country for failing to meet the conditions of the loan. This tactic imposes censurorship and political influence entangling the IMF with the internal policies of the countries political machinery. 1999-2000, the IMF pronounced the Asia financial crisis over.
   
   In fast growing Asian countries, hot money had poured inot these economies. Hot money could be liquidated with a push of a computer button by commerical banks and brokers. Hot money destabilized the S Korean financial systems and increased the violatility in the system.
   
   Criticism of the IMF are it lacks expertise in banking issues, it closes banks and does not consider whether other banks can cover; it can not create money like the fed. In 2001, IMF war chest totaling $137 billion. IMF limitations to financial assets makes it vulnerable to rescuing failsafe countries that could trigger global financial collaspe. Once an IMF bailout is installed, the role of the IMF is too become the financial planner of the country forcing the country to reduce spending and increase income revenue.



3. Clearly the best book ever written on the IMF & its inner-workings. Great detail on the theater and players within the IMF and those that make policy. The book is a must read for anyone interested in the world economy.
   
   Regarding the crisis that hit the world financial markets the author does an outstanding job in educating the reader on all of the key elements from Nation/States to Hedge Funds.
   
   By taking individual chapters to break down the elements of the distressed finances of Korea, Indonesia, Russia, Brazil, Thailand & wall street the author takes us on a roller coaster ride of international politics, high finance, intrigue & history.



4. The Chastening is a ripping, white-knuckle read. This IS the best single book about the IMF, but it is also a lesson in political theory. Like Milton Friedman's "Monetary History of the United States," David Halberstam's "The Best and the Brightest," and Robert Conquest's "Harvest of Sorrow," this book is a case study in how superempowered and unaccountable bureaucrats tend make natural disasters incalculably worse. It is an object lesson in how policymaking ambitions are frustrated by human fallibility, especially when the policymaker in question fails to account for that fallibility. At every step, the Fund's planners made horrible missteps with smug confidence, thereby prolonging the suffering of untold millions of people. At every step, they were shocked when reality failed to coorespond to theory and their best intentions backfired. In a subtle way, the doctrinaire rationalist approach taken by the Fund during the Asian crisis presages the failure of the remaking of Iraq. The inherent weakness of theory-laden, top-down political and economic planning is a lesson we must apparently learn over and over again. (For those who appreciate this philosophical dimension to the book, I highly recommend James C. Scott's Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed (The Institution for Social and Policy St).")
   
   The IMF is the most powerful single human force on the planet and yet it remains totally almost unknown to public at large. Blustein is to be commended for making the Fund transparent and accessible to all educated people.



5. There are many good reasons to bash the IMF but few reasons to do so if you don't know what you're talking about -- this books lets you do both.
   
   I've spent years in social circles that carry on a tragic lament of third world debt to first world countries, a lament I agree with but often find is expressed through oft-repeated anti-globalization mantras with no perception of how hideously complex the situation is.
   
   This book gives you the tools to make cogent criticisms of the IMF while simultaneously learning about the herculean chore the IMF has before it. Blustein describes the mechanics of how financial crises arose in the fateful year of 1997 in Thailand, Indonesia, Malaysia, and Korea, and later in Russia and Brazil. A combination of cookie-cutter shock therapy schemes, out-of-touch IMF officials, incompetent and often corrupt finance ministry officials and Wall Street Bankers converge to make it nearly impossible for countries to escape the wrath of an increasingly volatile group of investors the author appropriately dubs the "Electronic Herd."
   
   The pattern is now a familiar one -- irresponsible fiscal and monetary policy leaves a country exposed to predatory lenders and currency speculators. Investors and debt holders see the country's dwindling hard currency reserves as sign of imminent collapse and begin to sell off every asset they have there, creating a vicious circle of panic. The IMF is called in to make sure the country doesn't go bankrupt by providing loans of hard currency -- but who's being bailed out, the country itself of the lenders that put their money there?
   
   Blustein explains how this dynamic was repeated in each of the countries of the 1997 and 1998 crises, with the IMF response working in everyone's favor in only two cases among a string of dismal failures. He extensively explores the issue of "moral hazard," or the idea that big loan packages to economies in crisis just reinforces irresponsible behavior on the part of both the lenders and the borrowers.
   
   Can get a little tedious at times, and the sequence of events is sometimes hard to follow because so much is being explained at once -- but overall a well written work by a reporter who covered the subject for years.

5 comments about Why Globalization Works (Yale Nota Bene).

1. Martin Wolf is worried that the combination of anti-globalists and the ambiguous attitudes of governments towards globalisation in developed and developing countries can halt even reverse globalisation. Martin Wolf is convinced that globalisation so far has only delivered a fraction of the potential benefits and that globalisation is the only way to maintain prosperity and solve the poverty problem of the world. The book covers globalisation comprehensively. After reading the book one has a framework to be able to judge which criticisms are groundless and which ones are justified. The book concentrates on economic policies and the role of government, the impact of globalisation and the causes of that impact. The book also contains a large number of very interesting statistical tables and charts to illustrate conclusions and recommendations.
   Globalization in the context of this book refers to increases in import and export and businesses that establish factories and offices in many countries.
   The author points out the enormous diversity of anti- globalist organisations and why their ideas are wrong. An important category is the Non Government Organisations (NGOs). People at large have considerable more confidence that NGOs are genuinely interested in their well-being than global companies and governments. Many if not most large businesses like GE, Shell and Unilever look at NGOs as stakeholders and engage in dialogues with NGOs like OXFAM and Greenpeace leading to benefits for both sides. NGOs are a part of the reality that businesses; governments and also economists have to accept.
   Martin Wolf refers to the globalisation as "'liberal capitalism". The words "liberal" and "liberty" mean different things to different people. To some it refers to libertarians promoting the simplified Washington consensus aiming for markets without restrictions, without capital controls, minimal taxes, and a minimalist government. The problem with the word "Capitalism" is that it leads people to think of capitalists which is misleading as the main providers of capital are pension funds and other institutional investors and not individual capitalists. To avoid misunderstandings one could also refer to the system as a "global free enterprise system".
   Martin Wolf points out that the cause of poverty is the wrong government policies. He writes on the final page of the book that if we want to make our world a better place, "we must not look at the failures of the market economy, but at the hypocrisy and stupidity that so often mar our politics, in both developing and developed countries". In Buddhism this "stupidity" is referred to as "ignorance" in the sense of short sightedness and ego-centeredness and not understanding causes and effects. Ignorance is a huge obstacle to progress of globalisation, not only at the level of governments but also at the level of businesses and people at large. This book makes an important contribution to reduce ignorance.
   Martin Wolf includes Joseph Stiglitz amongst the anti-globalists. Nevertheless the list of improvements in the globalisation process that Marin Wolf presents in the chapter "How to make the world a better place" on page 316, is very similar to the criticisms of Stiglitz. Martin Wolf is crusader for globalisation and Stiglitz is a crusader for globalisation from the perspective of the developing countries. The two books of Joseph Stiglitz, "Globalization and its discontents" and, "Fair Trade For All"- "How Trade Can Promote Development" are also very useful for understanding causes and effects in globalisation.
   Martin Wolf writes: "Economists are very uncomfortable with the notion of morality". That is one reason why many economists that write or make recommendations about globalisation contribute to the negative reputation of globalisation. Martin Wolf as an economist recognises the essential role of morality. He writes, "Markets also require, reward and reinforce valuable moral qualities".
   In summary "Why Globalization Works" should be read by all involved in or affected by globalisation, both by those in favour and those against.



2. This book is one of the best available books on globalisation. There is a historical perspective on the history of world trade from the high point of the 19th century through the nadir of the interwar years. The author explains the economics of globalisation clearly in non-technical language. He takes the criticisms of the various opponents and demolishes almost all of them. In many cases he shows the contradictions embedded in the critics positions. There is a wonderfully cruel but accurate demolition of Naomi Klein's ideas which he shows are both shallow and authoritarian. He is a lucid writer but the material can be heavy going (lots of numbers and laying out of economic ideas) but stick with it - you'll come out with a good grounding in the issues. As he makes clear in the book, ignorance and misunderstanding of economic ideas is distressingly widespread and impoverishes public debate. Read Jagdish Bhagwti's book before or after and if you don't understand the benefits of globalisation heaven help you!



3. I read this book a little after digesting Londonistan and almost as a coincidence we find both authors talking about the same thing but from differing perspectives. As one born in the baby boom years dominated by the cold war between two superpowers and living in a nanny socialist state of Great Britain, the last thirty years have been little short of revolutionary.
   
   While Martin Wolf uses the term Globalisation to mean the breaking down of barriers around the world, to trade and the factors of production, what we are really seeing is the re-establishment of the liberal order which dominated the globe prior to the onset of the first world war. This liberal order in the traditional, classical liberal sense, is not the same as it once was but a more modern version, changed and adapted to the different political and economic realities of the present. It is an order which brings about change, usually for the better, but like any other change, has winners and losers though in general all of the world benefits.
   
   Martin Wolf does an excellent job of making the case for globalisation, in a lucid and concise manner. Furthermore he not only makes the case for globalisation but dissects the arguements of globalisations opponents whether they be the French Attac movement or the neo-liberal turned socialist Professor John Gray or even his colleague Michael Prowse and shows them to be fallacious or based on false premises.
   
   Mr. Wolf is no dewey eyed idealist however. He neither professes undying faith in an unfettered free market nor does he articulate the need for a strong regulatory state. He argues from a realist perspective that government with a light touch is needed in certain areas not merely to correct externalities or produce public goods but also where some degree of social welfare is required. He develops an overwhelming case of why globalisation is good for us and looks forward to the future and assesses the risks involved in it's further development.
   
   In short this is an excellent non-technical treatment of a feature that is having an impact on all of our lives whether we notice it or not. I found in studying the text that it is of a very timely nature given the ressurgence of terror attacks throughout the world and the growing tendencies within the United States towards introversion and turning against external trading links. Combining this with the rise of a home based fundamental christianity, these developments suggest to me that the greatest threat to a resurgent international liberal order come from within the US rather than other nations. These have not been helped by the EU intransigence towards reduction of subsidies for the small minority of agricultural producers which causes so much hardship for thir world farmers.
   
   I am not saying either that I am in wholehearted agreement with Martin Wolf's case. While I broadly agree with the thrust of his agruement I believe that the private sector and voluntary sectors could play a much greater role if the role of the organisations of the state could be more restricted and restrained.
   
   There is a great deal to think about in this book and I think that thoughful readers will find it to be of excellent value.



4. In regards to globalization, the book made some valid and often frustrating points. The author didn't leave much room for disagreement. As someone that is skeptical of globalization, it was good to hear about the positive elements. It challenged my points of view. I am still deciding what to think on the subject and the book has encouraged me to think more deeply.



5. In coherent and readable style Martin Wolf lays out the case in favour of globalisation. Whether you are in favour or against you should read this book. In making his case, Wolf tells why a global market economy makes sense and why there is too little globalisation. In Part IV he sets out his arguments on why the critics are wrong. This part should be the most exciting for anti-globalisionists given that every chapter starts off with a number of arguments against globalisation (some of which struck me as somewhat bizarre). He then goes on to explain quite comprehensively why the critics should be wrong.
   I found Martin Wolf's book indeed a blueprint for a better world.