Category: Book Reviews

I read The Most Powerful Idea in the World, William Rosen’s book about the invention of the steam engine, for two reasons, one of which was Bill Gates’ glowing recommendation. In his review, he raved about how Rosen was one of the first people to successfully argue that patent law had a large impact on innovation.

Since I am working on a project that looks at the impact of legal systems on innovation it only seemed natural. But I had a reservation. Not about the time period, I’d read a few books about the industrial revolution this year. It’s the simple fact that most books on innovation suck. They’re filled with bland platitudes and offer generic advice that is obvious to anyone with five years of business experience and a subscription to Harvard Business Review.

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The New Deal, a seminal era in American history, saw government take an active role in promoting the welfare of the citizens. In The New Deal, journalist Michael Hiltzik, tells the story of the people, policies, and actions that shaped the nation.

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Matt Stoller’s How Democrats Killed Their Populist Soul is the best political analysis I’ve read all year. It offers a solid argument to how economic populism fell out of the national narrative—and accelerated the decline of the American middle class.

It’s hard to believe today, but seventy years ago Bernie Sander’s ideas were fairly common on the left. Stoller traces how they became rare. He examines the forces that moved the Democratic party from one in fierce opposition to monopoly power to one that embraced it. I really do hope Stoller has a larger thesis in mind, because I’d love to read a book on it.

I’d recommend reading the entire piece. However, I wrote up some highlights for the lazy below.

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In 1946, over a decade before he became the architect of the Vietnam War, Robert McNamara was hired to rehaul the Ford Motor Company. It was in desperate need of help. The iconic corporation was hemorrhaging about $9 million a month. McNamara, an accountant by training who rose to prominence by applying statistical methods to warfare planning, immediately transformed the culture.

Decisions were no longer made from the eye of a designer, or the experience of the line-worker. He immediately developed complex financial metrics to measure a product’s viability. Every penny spent in manufacturing, marketing, design, and engineering had to be justified and rationalized through this analysis. It shifted power from engineers to MBAs. Within three years he doubled the company’s profits. In Makers and Takers, Rana Foroohar argues that this was the end of American global automobile leadership. As crazy as it sounds, the question needs to be asked: Did modern finance destroy innovation?

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In Dawn of Innovation Charles Morris argues that America’s economic dominance wasn’t driven by science, technology or ingenuity, but our commitment to mass production (scale). “The dominating American characteristic across all major industries,” he writes, “was the push for scale—adapting the production methods, the use of machinery, and the distribution to suit the product.” Viewing the world through this lenses reveals two myths; applying it to modern times illuminates the biggest issue facing modern governments—How to scale innovation in a knowledge economy.

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Bell Labs, the world’s most innovative organization in history, had a simple view on innovation. Whatever improvement came out of their Murray Hill headquarters had to do the job “better, or cheaper, or both” than its predecessor. In thirty years, this philosophy allowed the company to develop semiconductors, lasers, fiber optics, solar panels, the Unix operating system, the C++ programing language, cellular phone networks, and much more. At its peak, America’s monopolistic telephone company was one of the most profitable organizations in the world. In his book The Idea Factory, Jon Gertner makes the case that nearly every single improvement in modern communications can be traced back to one lab, at one company—AT&T. Trillions of dollars in economic growth, millions of jobs, all from one group.

The question is, what can we learn from Bell Labs?

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If they gave awards for the most comprehensive business books of the last ten years Factory Man by Beth Macy would be an unlikely–but worthy contender. It isn’t a TED ready think piece about the flattening of the world. Nor is it a feel-good call to revitalize American industry through disruptive innovation. Instead, it is a deeply reported narrative on the rise and fall of the American furniture industry. Told through the viewpoint of the Bassett Furniture Company, Macy explains how a manufacturing empire was created and systematically eroded. At first glance, the culprits of the decline are predictable: globalization and technology. Globalization because cheap Asian imports flooded the market at a fraction of the cost. Technology because advances in communications allowed businesses to build a supply chain that exported lumber from North Carolina to China, and the finished product back to American store shelves.

A lesser author would have ended the analysis there, but Macy peppers Factory Man with background and context allowing the real culprits emerge: systematically narrow management driven by orthodoxy and bad economic policy. The decline didn’t have to happen.

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In the span of forty years the China performed a development miracle. It transformed itself from an agrarian afterthought to the world’s second largest economy. This was in spite of pervasive attitudes and policies that ran contrary to most Western economic thought. In as recent as 1980, the country’s official dictionary defined “individualism” as “the heart of the Bourgeois worldview, behavior that benefits oneself at the expense of others.” Analyzing how one person’s world went from rural farming to internet millions is a hard task. Distilling the thoughts and attitudes of a billion people and putting it in context of modern society is a seemingly impossible one. As I explain in my Age of Ambition review, Evan Osnos delivers the impossible. He answers the question, “At what cost was China’s development miracle?”

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Each year hundreds of thousands of business books are published. Peter Thiel’s Zero to One is arguably the best business book of the decade. I’m not alone in this sentiment. The Atlantic called it “a lucid and profound articulation of capitalism and success in the 21st century economy.” New York Magazine said it was “surprisingly awesome” and The New Republic argued it “isn’t just entrepreneurial; it’s also ethical and romantic.”

Perhaps calling Zero to One the best business book of the decade was an understatement?

The book begins by asking a simple but contrarian question, “What important truth do very few people agree with you on?” The answer, according to Thiel, is that “most people think the future of the world will be defined by globalization, but the truth is that technology matters more.” Thiel describes globalization as taking what worked in developed nations and applying them in developing world. This moves the world from 1 to n. But if you invent a better way of doing things (how Thiel describes technology) the world moves from 0 to 1.

The problem is, moving from 0 to 1 is hard.

Thiel offers a lot of valuable advice on the topic. The most intriguing is his argument that capitalism isn’t about competition but rather creating a monopoly. He goes so far as to state “capitalism and competition are opposition.” For everyone on the right who is upset reading this socialist propaganda, realize that Thiel is about as pro-business as you can get without opposing all taxes. He founded Paypal in an attempt to create a virtual currency and supplant the US dollar. This would seem extreme if it wasn’t for his plan to build private islands exempt from the American government and international law.

All in all, Thiel’s book is an antidote to the bullshit percolating around the web. The world is now populated with charlatans and consultants of all stripes. Here is a guy who has actually built billions of dollars worth of value.

It is time we listen.

I have very few certainties in life. There’s life and there are taxes, but when Eric Schlosser releases a book you read it. That may seem like a bold statement, but it is the truth. With the release of Fast Food Nation, a 2001 book that examined the impact of the fast food industry on America, Schlosser became one of the few working journalists who can claim to have changed an entire industry.  “This is a fine piece of muckraking, alarming without being alarmist,” wrote the New York Times upon the book’s release, “Schlosser makes it hard to go on eating fast food in blissful ignorance.”

It took him over ten years, but Schlosser finally released his follow up, Command and Control, a book nominated for the Pulitzer Prize. I can say this with certainty; it is without a doubt the most comprehensive book on the systemic risk of any nuclear weapons system. It is impossible to read this book and not think to yourself, “I don’t understand how the world made it through the Cold War.”

The book centers itself on the Damascus Incident, a 1980 nuclear missile explosion in Arkansas that nearly blew the state in half. Schlosser takes a detour to trace bureaucratic and executive decision making that led to a place where the idea of Mutually Assured Destruction went from a punch line to stated American policy. It makes incredible and jarring points about the folly of complex systems. How the people most familiar with nuclear weapons were the most dedicated in their support for banning them. How armed nuclear bombs were routinely dropped and discharged, completely by accident. The book is meticulously researched, balanced and important.

I’m also not sure I would recommend it.

To put it bluntly the book was so detailed that I felt it detracted from the overall flow of the narrative. Unlike his previous works, I felt myself struggling through the middle of the book (although the last section that details the actual explosion is riveting). Instead, I’d recommend reading the excerpt published earlier in the New Yorker. The except doesn’t give a complete picture of how close the world came to ending due to minor lapses, but it gives a good enough glimpse.

Bottom Line: Command and Control is one of the most important books ever written about both nuclear strategy and the dangers of relying on a complex computerized system. If you are genuinely interested in those topics than it is a must read, if not, read the excerpts and reviews to get a general sense of how close we all came to not existing.

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