Professor Michael Heller’s book about the problems of property ownership and intransegence is at times interesting, and at times a pointless book. Its an argument that needs to be made, but its book form is up for question, and without a doubt, Heller’s solutions are not all that convincingly.

The Gridlock Economy:  How Too Much Ownership Wrecks Markets, Stops Innovation, and Costs Lives

Michael Heller

Basic Books:  July 2008

Heller’s book is a detailing of the many issues that exist for broad ownership within today’s western society. Specifically, Heller targets pharmaceuticals, bio-engineered products, music, and landed property, and the property rights that have developed around these industries. His argument is that because ownership is so splinted around a product, or a path to a product, that incentives encourage groups to work against each other, to not product valuable goods.

His best example in my mind was the massive problem with commercial airlines in this country, the number

of planes delayed, the sometimes brutal nature of using airports. Yet he cites that no

new large airports besides Denver have been built since the 1970s. And that is because groups (citizens) around established airports have adapted NIMBY (not in my back yard) policies and refuse to allow expansion, new airports, or any sort of development.

Heller also has a very interesting take on the pharmaceutical industries, biotechnology and the innovations that is creating. His argument is that numerous university scientists and for profit companies are using each other ideas to create cures for cancer or disease, or whatever. However, they can’t bring their solutions to market because they don’t own all of the underlying science technology. They would have to buy the patents or pay usage rights to the owners, and because the trouble with getting that done, they often simply don’t go through the effort, depriving the world of cures. This is immensely tragic.

As I said before, Heller has good examples. However, I come away from the book wondering if the problems he cites can be solved, moreover, I very much doubt the world he envisions would be better than ours. Property rights in America are sacrosanct; we have seen this be upheld in reaction to the New London ruling.

In the end, Heller doesn’t succeed at convincing me his solutions will solve the problems he has found.

Two Melons out of Five.

Malcolm Gladwell’s newest book in anthology of pop-psychology/economics/sociology is as fun of a read as his previous two, Blink and Tipping Point. However, in this version, Gladwell analyzes why people succeed, not why societies change (Tipping Point) or why people make accurate decisions (Blink).

Malcolm Gladwell

Outliers:  The Story of Success

Little, Brown and Company, November 18, 2008

Gladwell’s third offering is as easy to breeze through as his first two:  I read this one in less than 24 hours. His basic argument is simple:  that success, especially success in the business world is not a only a product of individuals working harder than everyone else, but also of specific circumstances that impact the skills individuals develop.

Gladwell’s first example is hockey players’ birthdays. In Canada (where Gladwell was raised), hockey leagues are usually grouped by age groups, with the cutoff day January 1. That means that players born on January 5, 1995 will play against kids born on December 5, 1995. Those January kids are obviously bigger and perhaps have slightly more skill, thus those kids are picked for the all-star teams and get more coaching, better coaching, and significantly more practice. As this practice is repeated from the early years (age 7 in some leagues) until Junior Hockey (Age 16) those born earlier become significantly better than their peers and thus have a better advantage of raising to the highest level, the NHL. This is played out as the vast majority of those at the highest level of Junior Hockey are born in the first three months of the years, and it is also true for Canadians in the NHL. The outlier is that these hyper-skilled athletes, who we want to believe worked so hard that they trained themselves to become good, were just born with an advantage unlike some of their peers.

I can whole-heartedly relate to the birthday as being significant. I was a pretty good baseball player back in the day, but I was born in January, not in August. Since the cutoff day for most of the traveling leagues was August 1st, those people born after August 1 had an advantage of about 6 months over me in growth. On one of the teams I played on, our coach specifically worked with his wife to have their children born after August 1st, in fact, their goal was to have them born on September 1st, that way if there were any complications, and the child popped out too soon, he would still get his full baseball eligibility. Both of the coaches kids were fantastic ball players (they would have to be if their Dad cared that much about their baseball, right?), but that father had done more than just give them advantages of advance coaching and excessive practice, he had done everything in his power to put them ahead of the rest of the game. More on parental prescribed advantages later.

Gladwell then turns his eyes to the computer world, and more specifically, to Bill Joy, one of the founders of a huge computer company, Oracle. Joy wrote much of the software and infrastructure that the Internet is based upon. He enrolled at the University of Michigan in 1971, unsure of his major and where he wanted to end up. He stumbled upon the Michigan’s computer lab and was hooked. Now, Joy was brilliant and he worked an absolutely ridiculous amount of time in that lab in order to become an amazing programmer. However, Joy was extremely lucky, first because the University of Michigan was one of handful of schools to install that new type of computer that was able to have multiple people use it at once. More importantly, they found a bug in the system that allowed them to abuse the system and dominate the amount of hours spent on the system. So while Joy worked his tail off, and everyone would agree that he was excessively talented, it took more than just that to succeed; he had to be lucky. He had to enroll at Michigan just at the right time (when they let freshman dominate the computer time), stumble into the lab, and find that bug. And then he had to work his tail off.

Gladwell also advocates a simple but powerful icon:  10,000 hours of practice. To become eminently successful at something, one must practice for 10,000 hours. I find this number to be quite provocative. He points out that numerous fantastically successful people practiced an inordinate amount to succeed, from concert pianists to athletes to computer programmers.

Gladwell’s most interesting example, at least to me, is when he cites a study that was conducted between two groups: a set of affluent families and non-affluent families and particularly how they raise their children. In the affluent family, the child is constantly busy with outside stimulation, whether it be trips to museums or reading books, or simply question and answer periods with parents. On the other hand, poorer families often don’t have that same dedication to encouragement and stimulation. Poor kids don’t get rides to soccer practice and to band practice, but play in the yard or watch TV. They don’t have books piled on the shelves at home, but make their own fun. Time to oneself isn’t necessarily bad, but what it does is destroy expectations that young people have to create their own path. For example, the more well off students are encouraged to challenge the rule of their superiors and to question more than poorer students, thus they are even stimulating themselves at a younger age. This comes through further and further as they age because they now have that talent to think and to think proactively becomes an inborn trait.

This study proves something that as the child of two teachers, I completely understand:  teachers have only the third most impact on a student. The first is the student, the second is the parents. Parents are significantly more important to the ability of student to learn and to engage in their surroundings. If for that reason only, this book is worth the purchase, to get parents to engage their children. To get teachers to work with parents to further engage their children.

Gladwell has come under some criticism for his books. He does scientific studies and pop-osizes them, making them digestible for the general public. He also, as he does extensively in this book, creates a straw man argument. I can’t think of one person who believes that Bill Joy wasn’t a product of his environment, or that Bill Gates still would have created Microsoft without access to a state-of-the-art computer in junior high. Would Wayne Gretsky have become the Great One without an ice patch in his backyard, or if he had been born in Los Angeles? His straw man is that society believes entirely in self-reliance and people pull themselves up. I don’t know anyone who believes that.

As for being an interesting book–it is fascinating, and Gladwell is a great story teller, as always. He makes you think, which is important in any book. And because you can always use a book like this to explain a point at a cocktail party (or if you’re more like me, at the bar over a game of darts), I heartily recommend it.

Four out of Five Melons!

E Ray Canterbery’s history of Economics is more a history of the ideas and the characters who came up with them and truly a tracing of economics. But it is a good read. Canterbery has fun telling the stories and anecdotes of the differing characters that created our economic understanding.

A Brief History of Economics: Artful Approaches to the Dismal Science

E Ray Canterbery

World Scientific Publishing Company, July 15, 2001

Canterbery starts out with what everyone considers the father of economic thought, Adam Smith, and then progresses through the history of thought in Europe, finally arriving at the next great thinker, John Maynard Keynes. Then the Americans take charge with Milton Friedman, JK Galbraith, and the return of neo-classical economists in the form of President Ronald Reagan and UK Prime Minister Margaret Thatcher.

Canterbery’s book is easy to read and fast paced, and most of the economic ideas are very well explained, up to the point where the in-depth discussion of Keynes and his impact on how we thought about economics occurs. At that point, the ideas start to get complex and the explanations and differences between competing groups becomes rather pedantic and minuscule such that a non-studious follower of economics could get lost in the mumbo-jumbo.

Also, when Canterbery finally gets to his discussion of the revival of the neo-classical school, his biases start to become overly prevalent. Canterbery is not a fan at all of the monetarist arguments of the Chicago School led by Milton Friedman, or of the Supply Side Economics that Reagan pushed through in the 1980s. His argument is that it created the greatest unequal wealth distribution in the history of man, and it wasn’t needed to grow the US economy. Basically, the workers got shafted, and the rich got insanely rich.

But his most interesting argument has significant impact on the world today. He argues that the deregulation and growth of the Wall Street Economy of the 1980s created a Casino Capitalism, in which America moved away from industrial production and to making money off of financial instruments. People ceased to create physical items cars, bikes, shoes, anything and simply became service managers. This Casino Capitalism thus created an artificial wealth and should have long term impact on the economy.

The book was published in 2001, and it apparently just took 7 years for him to get it right. Canterbery also argues that the rich financiers needed the growth of free trade, and thus pushed it to create a downward trend in product pricing, further driving down wages. And he cites the best argument that wages of those making below $200,000 have grown only slightly above inflation since 1980, while those making above $200,000 have grown at 1000s of percentages. They have reaped the benefits at a disproportionate rate to the rest of the country.

However, my biggest complaint with Canterbery is not his outstanding biases (I can live with those), but it is his ability to completely ignore any economists not from Great Britain or America (except JB Say from France) in his entire treaty. He also completely ignores the economic developments and theory that might have been happening around the world. His discussion of Marx is there, but he focuses little on the differences between USSR, China, and Yugoslavia and India, all socialist countries with wide variation. He talks not at all about the failed development in Latin America, or the growth of the Asian Tigers. His analysis of the state directed capitalism of Japan is extremely lacking. it is simply a too brief of a focus.

In conclusion, Canterbery’s book is a great read to understand the economics theories and the progress of economics to this point. He of course leaves out the Bush Administrations’ additions to the Casino Economy (which I imagine he would argue there are many). Take his theory analysis, and take his hatred of the Reagonomics with a grain of salt, and you’ll learn a lot. I do recommend a somewhat brief background in Economics, especially for the post-Keynesian readings, as they get complex.

Three out of Five Melons!

Fareed Zakaria, the brilliant Indian-American political commentator who currently is based out of NYC, published this slim book in May 2008 discussing the rise of the rest of the world, and specifically not the fall of the United States. His argument is quite simple: as the rest of the world gains in power economically, it will also gain in political and social might. Relatively, the expression of US power abroad will become less. However, Zakaria makes the case that this isn’t necessarily a bad thing.

The Post-American World

Fareed Zakaria

WW Norton, May 5, 2008

The premise of Zakaria’s book is quite simply:  the rest of the world is growing and will soon catch up to the US economically. Specifically, the BRIC countries (Brazil, Russia, India, China) are leading the charge and will soon have as much economic weight at the United States and Europe. His argument isn’t that this is bad, but it may in fact help the US regain legitimacy in the international spectrum as the US helps these countries adopt international standards and become apart of the world-system.

More importantly, he emphasizes that the wealth of the United States, if it properly integrates these rising powers and the rest of the growing world in the world-system, will grow as it will have greater access to consumers of its products and will better spread its social structures.

In Zakaria’s discussion of the rise of the West, he dedicates two chapters to the most powerful rising countries:  The Challenger (China) and The Ally (India). The chapter on China discusses the growth of China and its progression towards a market economy (it is still not a capitalist society, not when the state owns almost 50% of GDP). He rightly points out, and I think brilliantly, that the US’s constant preaching on human rights in China is hurting US relations because the two cultures are so different. The Protestant style of the US, or preaching and evangelizing, is so contrary to the Sino ethic that the two countries need to work to overcome these differences. The US, when it does write its yearly State Department Report on those nations with Human Rights abuses, needs to acknowledge that cultural differences do factor into diplomacy and work on how to fix those abuses.

The chapter on India is simply brilliant. As some of you may know, By Ink Alone is currently stationed in southwest India for work. This chapter is the single best explanation of the difficulties and growth and vast differences that exist within India and without India. It is almost worth purchasing the book simply for that chapter. If you are an outsider, looking to learn about India, either culturally or from a business or international relations perspective, Zakaria’s chapter on India is a great 20 minute read and will get you ready for India.

My first complaint about the book is that I read it seven months late, after the collapse of the financial markets and the onset of the Great Depression: Redux. The developing nations are going to be worse off than the United States and the EU. India’s GDP growth will go below 5% this year (note, I’m the only person predicting this, including everyone in India) and China’s is probably going to be somewhere between 5-6%. Considering they’ve been over 8% for the past four years in India, and 10 years in China, this is dangerous. The rest of the world (South Africa, Russia, Brazil, the rest of the Asian Tigers) will be significantly worse off. The Middle East is collapsing due to the fall in the oil price. The Rise of the Rest is currently on hold.

This doesn’t necessarily negate Zakaria’s arguments, but it certainly means that they won’t happen as quickly as thought. US GDP is going to go down by more than 2% in 2009. But Russia’s and much of the rest of the developing world’s could collapse to catastrophic levels.

My other beef is that simply this book, while really short, is too long. Its not really a book. Its a longish article that should have appeared in Foreign Affairs. The Clash of Civilizations, Samuel Huntington’s best known book, first was an article, as Francis Fukuyama’s End of History. My argument is that there isn’t enough substance here to warrant a full book. I want more case studies: where is the rise of Korea (unification anyone?) the rebirth of Japan, Russia and its Casino Economy, Brazil and the world’s new energy empire? Zakaria doesn’t explore these to the depth I want.

Overall, it is a great book, an excellent, if quick read, and that India chapter is almost worth the price of admission.

Four Melons out of Five!

My Name is Red

Orhan Pamuk

Translated to the English by Erdag M. Goknar

Published by Faber and Faber, 2001

Orhan Pamuk’s riveting tale set in late sixteenth century of the murder of a master gilder by one of his associates and the attempts to catch the murder won a Nobel Prize for Literature in 2006. The book tells the story of another book, commissioned by the Sultan to be done in the Venetian painting style. This is where the delicacies of East-West interaction become so important as the Venetian style is often seen as sacrilegious by Muslims and destroying the culture of both workshops and the Ottoman People. An even bigger problem is that the head of the workshop who works solely for the Sultan is not given the project, but a usurper who enlists four master craftsmen – three illuminators and one guilder – to assist him in the project.

The opening pages have the gilder murdered by what we are lead to believe is one of his fellow illuminators, because he objected to the style of the painting, coming under the influence of a reactionary Mosque Preacher, Hoja Erzurami. The main character, interesting named Black contrasting the title, of the book is an outsider (like any murder mystery story) who is recently returned to Istanbul and is madly in love with the daughter of the man commissioned by the Sultan. The Sultan’s man is also murdered, and Black has it put upon him to solve the mystery of the murders in order to marry the woman of his dreams, the Sultan’s Man’s daughter.

Black visits the various illuminators, the head of the workshop bypassed by the Sultan, and is entangled with the daughter and her trying to get a divorce from her missing husband. Set against 1590’s Istanbul, this could be riveting enough. However, Pamuk crafts the story in a different way, and tells each chapter from different character’s perspective. We are actually with the murdered Gilder as he dies and the murdered book leader as he is bludgeoned to death. Truly memorable descriptions. However, Pamuk does more than that, he interspaces his tale with chapters from the color red, a dog, and a gold coin. These chapters ad depth and beauty to the book, and also ad important exposition.

Most importantly, Pamuk’s book is not just a murder mystery. Either I missed the clues, but Pamuk does not want his murderer found too soon. He often does not provide enough information, enough little secret clues to give away the murder. The book often reads more like a thriller, or a time set piece, especially the second half, rather than a murder mystery.

Also, because of Pamuk’s constantly shifting perspective, the characters have a real depth. One of the illuminators, who’s nickname is Butterfly is arrogant, brilliant, overtly sexual and an asshole. But he’s a real character. Even though you detest his arrogance (especially when it is portrayed to the often bumbling slowness of Black) at the end, you feel for his desires, you wish that he could succeed, that what he loves will not be dying.

Finally, the perspective (can you tell that I love the changing point-of-view) allows Pamuk to bring in one final conceit to the story:  story telling. Inherently, each chapter is not a retelling of facts, but it is a story, told from the perspective of the character. Where do facts stop and embellishments start. Who really said what to whom? At the end of the book, we know the murder (if you didn’t this review would be three words long:  this book sucks.) Throughout the book, it was difficult to pin down who I thought the murder was because I couldn’t believe the stories being told by any of the characters, who made it clear they were seeking to portray their fellow miniaturists as doing the deed.

Pamuk’s changing viewpoint added as much if not more to the book than everything else combined. Because it is inherntly a simple story:  One man is killed, only three other people can be the killer, and one outsider is entrusted with capturing him (any murder mystery you can faithful describe in three clauses has issues). Even set against he cultural dissimilation of late 16th century Istanbul, that is not that interesting of a story. By bringing in viewpoints, and tall tale telling, Pamuk creates a story more impressive than the sum of its parts.

All that said, I’m not sure this book deserved the Nobel Prize. it is a great read, and I heartily recommend it to anyone, but is it really one of the best fiction books ever written? I don’t know if I would go that far. However, I know I will pick up one of Pamuk’s other books next time I see them in a shop.

Four and a half Melons!