What I am reading
Books, articles and blogs worth sharing and discussing
Once it was suggested to me, how could I possibly resist a book titled: “The Zoologist’s Guide to the Galaxy”? After all I have dubbed my blog “The Hitchhiker’s Guide to the Economy” in homage to Douglas Adams’ masterpiece. As I started reading I was quickly rewarded with the following sentence: “Why can we predict the motion of a ball and not the behavior of a chicken?” Of course if you spend enough time with chickens you might disagree. And if you watched the recent European football (soccer) championship, you will have seen plenty of goalies unable to predict the motion of a ball. But the point that But the point Arik Kershenbaum makes with that question is that it would be helpful if biology could derive some universal laws that are as precise and reliable as those of physics. Because such laws could then help us predict what aliens will look and act like, when we finally encounter them. This is what he sets out to do in the book (subtitle: What Animals on Earth Reveal About Aliens – and Ourselves).
I found it somewhat disappointing. There are a number of interesting facts and observations on evolution and on why animals and humans behave the way they do. And Kershenbaum does a great job at showing that in many ways the difference between humans and anaimals is one of degree – we are not quite as exceptional as we think. But deriving general laws in this case means arguing that the way animals and humans look, move around, act and behave is the inevitable consequences of basic feature of our environment; furthermore, that such features must exist on any other planet that might have generated life. Ergo, alien creatures will look, move, act and behave in very similar ways to us.
It might be logical, it might be right, but it’s disappointing – to me at least. I also find it paradoxical that while physics with its universal and precise laws can still pose to us mind-bending mysteries (just try wrapping your mind around quantum physics), biology when it aims for the same rigor ends up telling us that aliens must be just like us, depriving us of one of the biggest mysteries we love to ponder. So overall, this is a book you can skip, unless you are really getting bored over the summer.
As a final remark, I don’t quite understand the dogged determination with which we seek contact with alien life. A bat-friendly virus has just gotten the world to its knees for two years – do we really want to take our chances with alien viruses?
Why do we sleep? And why do we dream? These questions have fascinated us since antiquity; and as Zadra and Stickgold point out, sleeping and dreaming must serve some important function if they’ve survived thousands of years of evolution. There is only so much we can understand about dreaming, since a lot of the scientific analysis relies on what people remember of their dreams – but When Brains Dream offers quite a few interesting insights. For example, it appears that for every two hours we spend awake, absorbing information and sensorial inputs, our brain needs one hour of sleep to process it all. Hence, I guess, the recommendation to sleep about 8 hours per night. And you have to wonder, with the internet, smartphones and social media bombarding us with informational noise all the time, should we now be sleeping 12 hours per night, or does the 2:1 rule still apply? And by the way, do you still think you can multitask? Really?
Our brains, it seems, keep working and learning while we sleep. And dreams are a way for the brain to explore possibilities, potential links between loosely connected events and ideas – much like daydreaming, by the way. How scientists test for this is in itself fascinating. As is the fact that during REM sleep our brain paralyzes our muscles so we can’t act out its fantasies. And that in order to make the dreaming experience more memorable, it plays the same chemical tricks as LSD. Or that in some animals only one half of the brain can sleep at any one time – survival does require them to ‘sleep with one eye open’. Plenty of interesting stuff. Perhaps the authors’ effort to find a useful explanation for every aspect of our dreaming goes a little overboard – perhaps sometimes our brains just want to have fun and play. Overall quite a good book. I would not rate it as essential reading, but if you are interested in understanding better the different phases of sleep, how scientists study dreams, and why Freud is overrated, you will enjoy it.
This book was censored. OK, these days it’s not as shocking as it used to be. Amazon had pulled this book from its platform because it did not conform to the “official” views on Covid. Under heavy criticism, Amazon eventually reversed its decision, but when you read the book, the initial censorship appears even more egregious.
Sebastian Rushworth is a young Swedish physician. He clearly loves science, loves data, and loves thinking logically through issues that have an impact on our health. I share many of his views, for example that the evidence overwhelmingly suggests lockdowns are ineffective – so you should treat my review with suspicion and read the book for yourself. It’s a short and easy read.
Rushworth starts by explaining to the reader how to interpret basic statistics so as to better understand the information provided by the media. Some of his examples are obvious if you habitually deal with data: changes in the number of new Covid cases should be seen in proportion to the tests performed; and when comparing countries, the number of cases, hospitalizations and deaths should be taken as a proportion of the population. Yet the media have almost always focused on the unadjusted headline numbers. Why would you censor a book that tries to help people get a better understanding of the data?
The book also discusses the available scientific evidence on the accuracy of Covid tests, on the efficacy of masks, on the health costs and benefits of lockdowns, and on vaccines. Rushworth’s arguments are rigorous and transparent, and very effective at exposing the way in which information has often been mis-represented in the media and in the public debate. One example that I found striking: if you have followed the saga of the Astra-Zeneca vaccine you might remember that at some point several European countries ruled it unsuitable for the elderly because it had not been tested on a sufficiently large number of elderly people; well, neither had the other vaccines like Pfizer, it turns out.
It’s an enjoyable read that will give you some new insights on how the pandemic and the media and government reactions to it have reshaped our lives; and you might come to the conclusion that if the knee-jerk reaction of a major publisher is to censor a book like this, then the world is going dangerously mad.
Jeff Immelt’s Hot Seat is probably the best leadership book you will ever read. It’s also a gripping story – the last few chapters in particular read like a crime novel. The topic has all the right ingredients. GE has been an icon of the US economy for well over a century and Jeff its CEO for sixteen of its most eventful years. He took the helm of the company literally on the eve of 9/11 and led it through the Global Financial Crisis and years of accelerating disruption in technology and in the global economy. During his tenure Jeff was voted one the World’s Best CEOs three times (Barron’s) and GE was named America’s Most Admired Company (Fortune) and one of the World’s Most Respected Companies (Barron’s and Financial Times). Then things went south, and suddenly it seemed everyone 'had always known' that Jeff was a terrible CEO driving the company to inevitable ruin. From media pundits to financial analysts, everyone had it seen it coming and spotted every mistake.
The story of GE’s global success and sudden fall from grace has fascinated everyone and elicited strong emotions in many. Until now you’ve read accounts and theories by journalists and other outsiders, often with an axe to grind, at best relying on anonymous sources. Here is the chance to hear the story from the man who was at the center of it.
What makes Hot Seat so valuable is that Jeff not only owns up to the mistakes, but shows you how and why they happened, how they were far from obvious at the time. An invaluable lesson for current and future leaders. The Alstom acquisition, in hindsight a crucial misstep, was almost universally acclaimed at the time. The digital-industrial transformation was clearly the right play. When GE pioneered it, most were skeptical; now references to Industry 4.0 are ubiquitous and taken for granted. It was the right play, but GE did not execute it well; Hot Seat helps you see why. It also calls your attention to the many equally difficult but successful bets that GE placed – and those hold equally useful lessons.
The book has plenty more insights: the clearest explanation I’ve seen of the value of a conglomerate; a sharp outsider/insider view of private equity; the basics of operational excellence. It brings out the key qualities of leadership: valuing, trusting and motivating your people; having a vision and the courage to take risks and unpopular decisions; being comfortable with uncertainty and loneliness. And it brings home the sheer daunting magnitude of the task of leading a company like GE.
This is a genuine, raw story full of mixed emotions; and a clear-eyed analysis of how major macro changes – in the nature of globalization, geopolitics, technology and finance – have transformed the business environment and what that means for business leaders.
Hot Seat is an extremely honest and insightful book. Jeff does not shy from admitting mistakes and does not refrain from calling out the nonsense in the public criticism that followed his departure. It’s a way of setting the record straight that’s both frank and hard-hitting. It’s also an effort to draw the right lessons from an exceptional story. Jeff now teaches at the Stanford’s Graduate School of Business, and this book is also born from the desire to share his experience with the students who tomorrow will find themselves "in the hot seat". For them, and for anyone interested in leadership and in how the business world is changing, Hot Seat is the best book out there.
Max Tegmark is a physicist who is deeply involved in studying and mitigating the existential risks of Artificial Intelligence. In other words, he takes seriously the idea that AI might wipe us off the face of the planet, but is convinced we can control that risk and deploy AI as a transformational force for good. Life 3.0 (2017) gives a very interesting and approachable take on some of the key questions on AI: What exactly is intelligence? How does the aggregation of physical matter, as in atoms and cells coming together to form humans and other organisms, create intelligence? Given this, would artificial intelligence be any different from our own, or just more powerful? And what about consciousness: what is it exactly, and would an AI have it? A fascinating read, and Tegmark has a pragmatic approach, open and transparent on what we know and what we don’t know – at least yet.
The book also gives a well-articulated panorama of what we could achieve thanks to AI, and the many ways in which things could go terribly wrong. It also includes a quote by Isaac Asimov that perfectly encapsulates my concern about AI, and about technology in general: “The saddest aspect of life right now is that science gathers knowledge faster than society gathers wisdom”. A word of warning: I never lean towards the dystopian view of technology, but this book almost convinced me that AI will have both intelligence and consciousness, that we will succeed in developing it but not in controlling it, and we should already keep our fingers crossed. The tech-optimists scare me more than the tech-doom crowd - there must be a lesson here somewhere.
A Beautiful Mind (1998) tells the rollercoaster story of John Nash, brilliant mathematician and winner of the Nobel Prize in Economics for his work on game theory. I haven’t seen the movie, but I’ll bet you the book is better. Nash’s life story is better than fiction, and Sylvia Nasar narrates it in a vivid, captivating way. There’s a lot in the book, but here are a few things that struck me:
How top-level science, especially mathematics, is like top-level sports: fiercely competitive, ego-driven and youth-obsessed, because you will do your best work when you are young. Then as you age you’ll get wiser, you will still be supremely intelligent, but you won’t be able to perform at the levels of your youth. The chapters on Nash’s graduate studies at Princeton really bring it home. How thin is the line between genius and madness. It’s a cliché, but as Nash succumbs to mental illness you see so many of the people around him genuinely unable to tell the difference. How you can be a genius, and still find yourself helpless and deeply vulnerable – perhaps the most touching aspect of the book. How the world was so different then – or maybe not so different: the racial discrimination in some Ivy League universities, at the time against Jewish students and professors and the relationship between science and the war effort, just to name two examples. A beautiful book.
Reading Daniel Kahneman’s Thinking Fast and Slow represents an important personal achievement for me. I had tried reading it at least twice before, on my iPad—the first time shortly after the book was published in 2011—and always gave up. I found the book extremely interesting, so I did not understand why I could not finish it. I was getting worried. So I ordered the paperback edition, thinking that if I stopped reading it again, the actual physical book sitting forlorn on my desk would serve as a reminder and a reproach. A fitting strategy, given that the book itself deals with behavioral economics, which has taught us the value of “nudges”.
It worked! And now I understand why I found it so hard to stick with it: it is depressing! The book details many of our cognitive biases, the thousand ways in which our brain fools itself and is easily fooled by others—often because of laziness—and why we find it so hard to grasp statistics. But now that I’ve read it, I can recommend it as a must-read. Cognitive biases are hard-wired into our system, and for good reasons: speed, the ability to quickly create a context, generalize, draw rapid conclusions, recognize something as unusual and save mental energy have served us well in the evolutionary struggle. But they can easily mislead us, and a host of actors have gotten very adept at exploiting them: advertisers, news outlets, social media. Becoming more aware of our own biases can help us recognize when we are most at risk of falling into a trap. Nobody is immune. One of the insights in the book—and one that matches my own observation—is that even “high intelligence does not make people immune to biases”. So, no matter how smart you think you are, read this book. And don’t give up half way through, stick with it.
Upheaval: can you think of a more currently relevant title? Jared Diamond has an interesting background: trained in medicine, specializing in gallbladders, then became fascinated with history and geography. In Upheaval he looks at six countries that confronted different kinds of deep crises, how they handled them, what the consequences have been. It’s a forensic examination, and he has chosen six countries to which he has a personal connection, including at least some knowledge of the language. Rather impressive given that the list includes Finland, Indonesia and Japan, as well as Chile, Australia and Germany. He draws parallels with how we as individuals face personal crises; and ties in reflections on the future of the United States and of the world.
It is often hard to recognize that we might be living history—that is, personally experiencing a momentous historical transition. It comes easy to those who are so full of themselves to believe they are making history, but the rest of us tend to think history moves too slowly, that we will not be subject to a life-altering shift in its course. A book like Upheaval offers a healthy reality check. Diamond recalls his Chilean friends being supremely confident that democracy was firmly entrenched forever, just before Pinochet took power. We take too much for granted. Yes, we have the obligatory New York Times-style handwringing on how Trump is a dictator in the making; but we don’t truly believe it, and meanwhile we ignore the actual fraying in the fabric of our institutions, and we underestimate the magnitude and potential consequences of the geopolitical shifts around us. It’s good to have a reminder of what history feels like, of how messy it is, of why we should take it seriously, of how are own attitudes and choices might play a bigger role than we realize.
Yes, sometimes I read older books—hey, I never promised this page would be a review of what’s new and hot. And for some books it’s actually more interesting to see how they have aged, how their predictions are holding up. Niall Ferguson’s Civilization: The West and The Rest is almost ten years old now; its central theme is how and why western civilization rose to a dominant global role, and whether it might now have entered an irreversible decline. Civilization is a superb book and a very enjoyable read. It has aged very well; indeed it seems more relevant now than when it was published. There are two issues at play: One is whether Asia—and China in particular—is now rising to take the role of predominant economic and geopolitical power. The other, related but separate, and central to the book, is whether the West has entered a phase of decline due to its own complacency, underestimating, questioning and even rejecting the key elements of our society that have raised standards of living and levels of political and social freedom for the last couple of centuries.
Ten years ago you could catch the first glimpse of incipient decline; today the signs are much clearer and more alarming. Reading Civilization offers a great opportunity to reflect on what’s happening in the world around us, seeing it in a broad historical context. I have one small quibble: Ferguson is a highly numerate historian, and sometimes he throws so many numbers at the reader that even my head starts spinning, and I work with numbers all the time. But this is just my own minor complaint. At a time when it’s especially important to take a step back and take a broader view of history, this book does it brilliantly.
Judea Pearl won the Turing Award in 2011—think of it as the Nobel prize for computer science and artificial intelligence. His work on AI convinced him that to achieve artificial general intelligence, to build machines that can truly think like us and communicate and collaborate with us, we need them to understand cause and effect, and to be able to think in terms of counterfactuals (“if I had not exterminated mankind, I could still beat them at chess…”). The problem is, AI is based on data, and for a long time mainstream statistical analysis has tended to “let the data speak for themselves” without prior assumptions on causal relationships. Then it developed techniques and statistical tests to determine in what cases we can argue that we have found causation, not just correlation. Professor Pearl, however, argues that if you do not start by positing what causal relationships might exist between different variables, the tests you devise to identify causality might be terribly wrong.
The method he has championed relies on graphs: you write down the variables and draw arrows indicating the possible causal relationships. From there you can define conditions and equations—which in some cases parallel those of Bayesian probability—which will allow you to test whether or not the data provide evidence of causality. Some of the passages require concentration to follow the steps (I would not advise reading them in the sun while drinking margaritas--trust me). But Pearl brings in lots of relevant examples from questions and studies that have made the news over the years, illustrating remarkable instances of experts led astray by faulty causal thinking. At the end he ties it back to AI, discussing why we need to go beyond machine learning and beyond the Bayesian approach, why we need machines to think in terms of cause and effect the way that we do. This brings up—all too briefly—subtle points such as, if a machine can think in terms of counterfactuals, does it mean it has free will?
We are surrounded by poorly used data and bombarded by articles claiming new scientific research shows that something causes obesity, or heart attacks, or poverty, or crime, etc. Reading The Book of Why is good training to quickly sort through these barrage of supposed insights.
George Orwell’s 1984 is the single most relevant book for today’s world. If you have never read it before, read it. If you have read it in the past, read it again. I have found it profoundly unsettling, in two respects. First, seventy years ago George Orwell was prescient—the world he imagined has in many ways materialized around us. Second, it has however materialized in ways and contexts that Orwell did not even remotely imagine. In 1948, Orwell foresaw that his dystopian world of complete government control over the individual would be brought about by a totalitarian regime. Today, it has taken shape in the most advanced democracies.
In 1984’s Oceania, you have to be constantly aware of a list of opinions and words which cannot be uttered, a list that is constantly being refined. And indeed today the list of opinions and words that will get you quickly ostracized from the public sphere and thrown out of your job keeps growing. Social media and scores of internet-scouring self-appointed Ministry Of Love officials will find you and sanction you without fail. In Oceania, you have to always carefully control your facial expression, lest it betray a forbidden thought or doubt. Today, if one of a list of topics comes out at a cocktail party (or a video conference, in these social-distancing days), you instinctively know what facial expression you must assume to avoid suspicion. I feel it, and I know you have felt it too. The mere hint of a smile, the twitch of an eyebrow will have you accused of being anti-science or of other unspeakable moral crimes.
In the name of Freedom of speech, people are being prevented from speaking in public, “canceled” and “deplatformed”. Contrarian thinkers disappear from the internet—just as they disappeared from Oceania’s archives, the Ministry Of Truth busily rewriting history in real time. In Oceania, searching the archives you would only find what Big Brother allowed you to find. Today, Google, Facebook, Twitter, YouTube etc. do the same. The main media outlets have fallen in line, as the Ministry Of Truth page documents. The invisible hand of the free market has achieved total social control in an even more extensive and efficient way than Orwell’s Big Brother could ever imagine. Plus of course creating a range of addictive devices that follow us everywhere, tracking our movements and listening to our every word.
Consider the following quote: “Even the humblest Party member is expected to be competent, industrious and even intelligent within narrow limits, but it is also necessary that he should be a credulous and ignorant fanatic whose prevailing moods are fear, hatred, adulations and orgiastic triumph. In other words it is necessary that he should have the mentality appropriate to a state of war.” Sounds familiar? Today’s politicians have learnt the lesson, and the media are all too happy to play along.
You must read it. Just one more word of advice: Don’t buy it online. Don’t download it on your Kindle. Buy it in person at a bookstore, in a different neighborhood. Pay cash. Read it alone, away from your TV screens, computers, smartphones and other devices. When you are done, burn it. If you get the knock on the door, I know you will give them my name, and I don’t blame you—I would do the same. We will meet in the place where there is no darkness.
Yuval Noah Harari’s latest book, 21 Lessons for the 21st Century, left me unimpressed. In the introduction, Harari says “In a world deluged by irrelevant information, clarity is power.” And further: “As a historian, I cannot give people food or clothes—but I can try and offer some clarity, thereby helping to level the global playing field.” I did not find much clarity in the book. Harari tackles weighty topics, from justice to meaning, civilization, religion, immigration and more. To my judgement, however, he does it with very little depth, incisiveness or originality. One small example: on Post-Truth, or the broad issue of fake news, Harari tells us that we should mistrust free information and instead be willing to “pay good money for reliable information.” With a subscription to a leading newspaper, for example? Ha! The Ministry Of Truth is laughing itself silly. Harari also says scientists should be more engaged in the public debate, ignoring the thorny issue of how they engage, and whether too many of them succumb to the lure of celebrity or of a political agenda.
Another important point: Harari strongly believes our future will be shaped by infotech and biotech, and that robotics and AI will rapidly eliminate most jobs. I have always felt these dystopian arguments look too far into the future and distract us from more pressing concerns. And indeed, after reading how the miracles of biotech will turn us into a new superhuman race, we have now been cowering in our homes for months for fear that a cousin of the common cold will wipe us off the face of the planet. Meanwhile, as tens of millions of people lose their jobs because of this anti-virus lockdown, the global economy is crashing because the robots who were supposed to steal those jobs are nowhere to be seen. A sobering reminder to take these visionary predictions with a grain of salt. I have not yet read Harari’s previous books. I will try them. But I would definitely not encourage you to read this one—there is much better food for thought out there.
Here is another wonderful book: Factfulness. Hans Rosling, who sadly passed away in 2017, was a Swedish physician who spent considerable time working in different countries and continents, notably the poorer parts of Africa and Asia. It opened his eyes to the world, but it also brought him to the realization of how little we know of the world. Most importantly, how little we know of how much living conditions around the world have been improving. Our perception is grossly distorted by a series of pessimistic cognitive biases amplified by the dystopian bias of the media—we believe things are a lot worse than they really are, especially in “the rest of the world”, defined as those countries that are poorer than us.
Rosling opens the book with a series of multiple-choice questions that he has tested with different audiences around the world. He has found that his audiences get it systematically wrong, and always in the pessimistic direction. He invites the reader to take the test before reading the book. Now, I have traveled a lot, I have analyzed global data for a living, and firmly believe that things are better than people say and getting better—and still I made some of the classic pessimistic mistakes!
Rosling guides us through the cognitive biases at play with kindness and wit, candidly narrating examples of when he has fallen victim to the same biases, sometimes with quite damaging consequences. And he teaches us some simple common sense tricks to counter our own biases. He is the best advocate for the importance of intellectual honesty, of relying on data while remaining alert to the data’s own limitations, of seeking answers and solutions in a gradual way, with constant improvements. Rosling was actively engaged in the fight against the Ebola virus, and his words of wisdom and caution from that experience apply equally well to today’s coronavirus crisis.
Factfulness is a striking indictment of the Armageddon culture that surrounds us, and of our own attraction and addiction to it—but without any animosity. It invites us to laugh at ourselves the way Rosling laughed at his own mistakes, and to do better, with a positive frame of mind. In many ways, the perfect book to read at a time like this.
I found Scale to be a fascinating and captivating book. Geoffrey West is a theoretical physicist who got deeply interested in biology and has tried to address some fundamental biology questions with a physicists’ mindset: can we find simple and elegant explanations to complex phenomena? The answer is yes, and the book unveils some intriguing commonalities across different forms of life, which West ties back to fundamental physical constraints and efficiencies. If you love discovering intriguing and surprising mathematical regularities in the world around us, you will love this book—for me it was a sheer joy to read.
Scale addresses a number of intriguing questions that stretch beyond the realm of biology. For example: why do humans and other animals die, (most) corporations die, but cities do not? In my thoughts on The Future of Capitalism I had been critical of Collier’s argument that people living in big cities should be taxed more because they benefit from “gains from agglomeration”. West gives a more detailed and data-driven assessment of the benefits and disadvantages of big cities, which holds his key as to why cities do not die of old age. If you read the book, consider his argument against the background of the current coronavirus crisis, which has hit New York City so hard; if pandemics become recurrent and even more deadly than covid19, will the evolutionary advantage of cities endure?
Another key question that Scale tackles: “Why does the pace of life continually increase and why does the rate of innovation have to continue to accelerate in order to sustain socioeconomic life?” This leads to a penetrating and in some ways disturbing discussion (disturbing to me, at least).
This is an especially appropriate time to ponder big questions about our lives and societies with a rigorous mindset, and I can’t think of a better book than this one, so I am especially grateful to my friend Mickey McManus for pointing me to it over a pre-social distancing lunch.
Will China overtake the US in Artificial Intelligence? When you glance at the cover of A.I. Superpowers you know that is the question at stake. Kai-Fu Lee is an AI expert who has worked in both countries and has now settled in China. He worked for Microsoft, ran Google China, then set up his own VC firm. His book provides a very clear-eyed view of the two countries’ different comparative advantages: capacity to innovate, entrepreneurial environment, infrastructure, role of government and social norms.
He stresses that in many areas, progress in implementing AI will hinge on the ability of bringing together physical and digital technologies; I think he is absolutely right, and I like the way he identifies areas where China will most likely leap ahead and areas where the US will probably maintain an edge. Like most AI evangelists, Kai-Fu Lee is convinced that AI will leap ahead of humans. After a quick but comprehensive review of the various studies of the impact of AI on jobs, he concludes that within the next 15 years, about half of US jobs will have been replaced, or at least be replaceable. I think this is way too pessimistic, but I recognize there is an enormous margin of uncertainty, so it makes sense to ask ‘what do we do if…?’
Kai-Fu Lee dismisses Universal Basic Income, and proposes instead a Social Investment Stipend, where the government would pay people to perform socially valuable activities: caring for elderly parents, regulating traffic near schools, etc. His argument, in a nutshell, is that as AI makes our brain obsolete, the one thing that makes us unique is our heart, and so we should focus on caring for each other. This vision is explicitly shaped by his recent brush with death (successfully fighting back late-stage lymphoma), which has led Kai-Fu Lee to reassess his priorities.
This experience has given him a clearer view of what’s important in life, but—in my opinion—also a foggier view of human nature. Paying people to perform useful activities is far better than the money-for-nothing UBI approach; but assuming everyone will find fulfillment in loving and caring for fellow human beings is far too optimistic. Similarly utopian is his hope that AI will enable a more harmonious global society, rather than resulting in fiercer competition across countries. The nature of countries, alas, mirrors human nature.
There is little doubt that the current capitalist system needs some adjustments, and The Future of Capitalism provides an interesting and balanced analysis. Paul Collier argues that “Capitalist societies must be ethical as well as prosperous” in that they must foster a sense of “reciprocal commitments”—something that we seem to have lost. In a social climate that constantly stresses rights and entitlements, Collier stands out by stressing the obligations that each one of us should feel if we are to function as a community.
For Collier, the golden age of the “ethical state” was the two decades after World War II, when reciprocal obligations were enshrined in the social insurance systems of social democracy in Europe and in the US (with Roosevelt’s New Deal). This golden age, in his view, was then torn apart by two different forces: the globalists, who exploited economic globalization for their own profit ignoring their national obligations, and the tribalists who “promoted the distinctive identity of victim groups”. There is a lot I agree with in his analysis, but it sidesteps the fact that the social democratic welfare system had some perverse economic incentives built in: it gave politicians an incentive to promise more generous benefits, and citizens an incentive to rely more on those benefits than their hard work—so that in the end pension and health care systems have become inefficient and financially unsustainable. Striking the right balance between solidarity and individual incentives is the hardest economic problem, and it cannot be solved just with the right narrative to build social cohesion. Incentives matter.
The tension between globalism and national identity is something I care about at a very personal level. Collier argues that highly skilled people developed a sense of superiority against their less skilled countrymen and started exploiting them as “suckers”, bonding with other highly skilled people in other countries. I disagree and find this view simplistic. As a social democracy becomes more progressive and redistributive, it creates stronger incentives to take advantage of the benefit system, and highly skilled people who play by the rules become the suckers. Their ability to move to a different country—and take on a new set of obligations there—helps create a healthy competition among nations. The reason rich regions in Spain and Italy have developed centrifugal temptations is not selfishness, but a sense of being taken advantage of. And to recreate an “ethical state” we need in my view a set of common values that citizens will subscribe to; this goes against the current emphasis on cultural differences and identity politics, but unless we square this circle, our societies will unravel.
Collier proposes that skilled workers who live in big cities should be taxed more, because big cities provide them with “gains from agglomeration” to the detriment of less skilled people, who are left simply facing a higher cost of living. I find the argument unconvincing, a simplistic answer to an important issue. First: Collier thinks a skilled worker in a big city is getting an un-earned rent, earning a higher income simply because she is in the same place as other skilled workers. But look at it a different way: the whole US economy benefits from having New York as a global financial powerhouse, or San Francisco as a global innovation hub; their leading position is made possible by the concentration of financial and tech talent. Therefore, each financier in New York and tech wizard in San Francisco also creates a positive externality. Second: big cities have advantages and disadvantages for all. Less skilled workers earn a lot more in a big city than in the ‘provinces’, simply by being in a place with higher purchasing power. And skilled workers—like everyone else—suffer significant “losses from agglomeration” in the form of traffic congestion and pollution, just to mention a few (as well as already higher local taxes). The higher earning power of a lawyer in Chicago is quite different from the rent that the Duke of Westminster enjoys by virtue of the fact that his family has owned most of central London for centuries.
Finally, a couple of quibbles. Collier argues that since the population of London was the same in 2011 as in 1950, while the number of immigrants rose 37% in the interim, this proves that (skilled) immigrants pushed out a large share of the native population. But London’s population dropped from 8 to 6 millions between 1950 and 1990, a whopping 25% decline. Then it bounced back, partly thanks to immigration, but it looks like many native Londoners left before anybody else moved in. Douglas Murray has made a strong case that a London where today nearly 40% of the population is foreign born has lost its original culture and character. I have a lot of sympathy for that argument. There is an awkward trade-off between diversity and tradition—the charm of unspoiled villages in Italy or France is inextricably linked to their lack of diversity. But numbers should always be handled with care. Similarly when Collier argues that a 30% youth unemployment in Italy explains the recent surge in populism—Italy’s youth unemployment averaged 33% when the country experienced its fastest recent period of growth, in 1994-2000. It doesn’t take long to check the numbers.
Stimulating and definitely worth reading—but keep your critical attitude switched on.
You’ll remember Adam Smith’s famous quote: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” Luca Silipo would agree, but in On Proximity he notes there is something more: the identifiable connection of our bread with the local baker and of our coat with the tailor endowed these products with a value beyond their practical use—a “social value” made up of the human connections created by a product, and our awareness of what the product represents for everyone involved in producing it and using it. All this has largely gotten lost as the efficient specialization and division of labor (which also goes back to Adam Smith) led to increasingly articulated and complex global supply chains.As the Chief Economist of GEODIS, a leading global transport and logistics company, Luca know this well.
This loss of “product social value” has probably contributed to the atomization of our society—Luca observes—the increased income and wealth inequality, the weakened social cohesion, the heightened political polarization that we observe in many societies. The modern economic system has created unprecedented prosperity, but the social costs have been underestimated and have risen to the point where the economic system itself risks losing legitimacy. I think political developments in both the US and Europe confirm this.
Proximity puts forward a provocative and visionary proposal to use new technologies to resurrect the social value of products without undoing the efficient setup of the current economic system. Imagine using Virtual Reality (VR) and Augmented Reality (AR) to visualize the past and the potential future of a product you are thinking of buying. You could see where and how it was produced, with what impact on the environment and the living standards of the workers involved; and get a detailed view of the options for reuse or recycling that you will have once you no longer need it. Such a system would allow you to make much more informed choices, using data that to a large extent are already being collected. In the process, it would bring the product to life.
I love the technology angle of Luca’s proposed solution—and it aligns well with recent innovations in AR/VR. My main concern is whether humans will have the capacity or desire to absorb all this information and use it to make better decisions. We are surrounded by examples where most of us ignore or disregard already available information. The right user interface could certainly make a big difference to people’s willingness and ability to use information wisely—but I worry we’ll be pushing against some very basic human instincts/failings.
On Proximity is a unique and fascinating book and a very engaging read. Our current economic system will have to change, and if we can’t guide the change in a direction that safeguards its ability to boost living standards, we could end up making or repeating some very costly mistakes (as socialism becomes cool once again). I am also convinced that some of the technological solutions that Luca envisages will show a momentum of their own and gain traction—raising a host of additional data privacy and security issues. Great food for thought, and Luca is determined to bring the vision to life, so stay tuned.
Gary Pisano’s Creative Construction (The DNA of Sustained Innovation) is an invaluable guide for companies and an excellent read for anyone interested in how innovation works (or does not work) in the messy real world of business.
As GE’s Chief Economist and Head of Business Innovation Strategy, I have wrestled with many of the issues that Gary tackles in the book: can a large established company be as innovative as a startup? How do you build an innovation strategy? Create an innovation culture that permeates the company? Invest in new opportunities and business models while safeguarding the core revenue stream? I read Gary’s book with battle-scarred, cynical eyes—and I was impressed.
Creative Construction debunks many of the myths and buzzwords that surround innovation, slogans such as “eat your own lunch before someone else does.” It takes a pragmatic and systemic view of the assumptions that underpin these fashionable bits of wisdom. How confident are you that your existing technology will become obsolete, and how quickly? Is the disruption you discern on the horizon as profitable as your current strategy or other alternatives? The book gives great attention to details, specific conditions and interdependencies—which yields useful general rules rather than catchy generalizations. It backs this up with a more insightful and less stereotyped read of some of the classic cases of innovation failure and success (think Kodak, IBM).
One of the best features of Creative Construction is that it recognizes how devilishly difficult the innovation game is, how hard and sometimes impossible it is to predict trends in technology and tastes across a range of interdependent sectors. This is sobering but not paralyzing: it comes combined with clear and effective frameworks for thinking through the tradeoffs and choices implied by different types of innovation strategy.
Another virtue of the book is the clean logic that runs through it. There’s no room here for fuzzy thinking. You get a realistic assessment of where we face uncertainty and ambiguity, with a very logical way of thinking through the options and structuring your strategy.
Creative Construction provides pragmatic advice, informed by decades of case studies and consulting work with companies large and small. Gary knows what dynamics actually play out within companies, how discussions unfold, how different views and interest groups clash – essential knowledge to provide advice that can truly be implemented within a corporate environment.
Creative Construction will prove a valuable source of insights for executives, but also a great read for anyone interested in how innovation gets to shape the way we work and live—and it’s very well-written to boot, so you should put it at the top of your reading list.
Three reasons to love No Hard Feelings, the new book by Liz Fosslien and Mollie West Duffy on “the secret power of embracing emotions at work”. First: you will recognize yourself in the book. Liz and Mollie have a great ability to spot and highlight the many ways in which our emotions (and our colleagues’ and bosses’ emotions) shape our working life, with examples that make you snap your fingers and say ‘Yes, that’s exactly what I do/how I feel when…’
It reminded me of how Kahneman’s Thinking Fast And Slow opens our eyes to our cognitive biases. Second: their tips on how to channel, leverage or restrain our emotions are the kind of smart and sensible advice we can all use. My favorite tidbit: “Your feelings aren’t facts” (we should all apply it well beyond the workplace) Third: Liz’s drawings!
A great read that will make your working life more enjoyable (or at least a bit less painful). Even if you think that emotionless robots will soon take all our jobs...a lot of the insights will apply to the rest of your leisurely life.
The quest to develop true, "general" Artificial Intelligence is at the same time a quest to understand how human intelligence works and, ultimately, what it means to be human. The Future of the Mind (2014) documents the impressive progress we are making in understanding how the cogs and wheels in our brain turn as we make memories, solve problems, admire a sunset or have a burst of road rage. This leads to provocative reflections on telepathy, implanted memories, and even the idea of dematerializing our consciousness and beaming it across space, accelerating our search for extraterrestrial intelligence.
Except of course that our intelligence and consciousness are closely linked to all the external stimuli we get from our senses. Even an extended stay in a sensory deprivation chamber can test our sanity, so how well a disembodied intelligence would fare remains to be seen.
I love the fascinating, exasperating contradiction that emerges in the book, however. We understand enough about our mind to get the depressing feeling that we are just another machine--but not enough to reproduce it in a man-made machine.
Full disclosure: I worked closely with Beth Comstock for seven lucky years and consider her one of the most inspiring leaders around. With Imagine it Forward, coming out on September 18, Beth brings us a most courageous and insightful book on leadership; an invaluable resource for anyone trying to succeed in the new economy, and for those who want to understand how innovation is reshaping the business world.
In Imagine it Forward, Beth holds nothing back: the excitement of pushing forward major changes, the adrenaline of challenging consensus, the frustrations and setbacks, the moments of self-doubt. The book is immediate, genuine and deeply personal—as I read it I could hear her voice in countless meetings and conversations.
Technological innovation has shifted up a gear, disrupting industries and business models at an accelerating pace. For businesses large and small, coping is hard. You have to think faster and move faster, facing greater uncertainty than ever before. You have to scout a growing list of revolutionary technologies, from Artificial Intelligence to Robotics to 3D printing and more, and try to understand which ones can help you and how. You have to try and anticipate new competition coming from left field, and rethink your relations with customers, suppliers and competitors.
To succeed, you need to think differently, experiment, learn to do things differently. Beth did it in one of the largest and most established industrial conglomerates in the world—a setting that offered the greatest potential and posed the greatest obstacles.
Beth brings to life how hard it is to thrive in this faster-changing world, and how you can do it. It’s scary, but it’s inevitable, and it can be done. She shows the difficulties you will encounter and how you can anticipate them and surmount them. The book is packed with insights, from personal anecdotes to business examples, from simple heuristics to more articulated methodologies like Fastworks.
If it were a novel, Imagine it Forward would be a classic hero’s journey, where the protagonist surmounts increasingly hard challenges and in the process discovers herself, gaining full confidence in her powers. The fact that this time the hero is a heroine—the first woman to become a GE Vice Chair—is another element that should push both male and female leaders to think differently. Beth’s journey continues. The insights she shares from her experience are invaluable.
After a long prejudiced hesitation, I have finally come around to reading Nassim Taleb’s Antifragile. I confess I have enjoyed it tremendously. Taleb at times sounds exquisitely pretentious—even more than the academics and intellectuals he pillories throughout the book. And yet even that pretentiousness has an insidious charm. The same goes for his writing style, at times so over the top, often so witty and effective.
I enjoyed the most Taleb’s emphasis on common sense and pragmatism, his denunciation of many instances of pseudo-science and excessive interventionism, in medicine as in economic policy. I disagree with his visceral despise for economics and economists, but I have to recognize it is not entirely unwarranted—the man has a point. His direct attacks against a few high-profile experts are as brutal as they are well-argued and, in my view, on the mark. And while at times undeniably pretentious, Taleb’s erudition greatly enriches the book. If you have not read it yet, try it; chances are you will both love it and hate it, which means it’s worth reading.
By now you’ll have realized I’m a sucker for science fiction. This is a modern classic, just over 20 years old. I love this book for four reasons. First: it is even more relevant today than it was 20 years ago, because it centers on key technologies that are now just beginning to show their potential. At the heart of the book is an interactive virtual reality learning device—and the little girl who grows up with it. It’s set in a future where 3D printing has finally come of age, and every house has a Matter Compiler; nanotechnology has become pervasive.
But…what hasn’t evolved much in this world of the future is human nature. This is no paradise. And no, there is no Universal Basic Income… Second reason why I love it: this is a great fairy tale, and a gritty one. Third: its global vision – which to me is crucial to understand what impact technologies will have on our world. Fourth: the way that Neal Stephenson enjoys playing with the language, sometimes over the top. Highly recommended.
Recent advances in Artificial Intelligence (AI) have reawakened our fear of robots: if we are lucky, they will only take over all the jobs, leaving most of us impoverished; more likely, they will enslave us. Thus goes the prevailing narrative. I find it amusing. As i wrote in a recent blog, the reality is that "employment is higher than ever — we all slave away with pitifully low productivity while the AI overlords play chess and Go". But robots and AI raise deep fascinating questions about human nature and our relation with technology.
I love going back to Asimov's first robot stories--which i first read as a little kid. Some of these stories are now 70 years old (!) and yet they still provide the most fresh, authentic and often surprising insights. How would we interact with intelligent robots? How would the robots think, and perhaps feel? Could they be more similar to us than we expect? Would they find a way around the three laws of robotics? If you are at all interested in these issues, this collection is a must.
I had the chance to hear General McChrystal speak at a GE management offsite, and he was truly impressive. But there were two more reasons why I wanted to read his book. First, because I have a long-standing admiration for our Armed Forces. Second, because the book tackles an issue I have experienced first hand: how can a large organization handle a world where innovation favors speed, agility and decentralization? When lives depend on it, you have a strong incentive to figure it out.
I find this to be still the best book on networks vs hierarchies; it illustrates how to foster decentralization and entrepreneurship while maintaining a strong unifying culture; how to improve transparency and communications by prizing results and insights over hierarchy. One of the best leadership books you can lay your hands on.
By all accounts a sobering read. Marty Makary is a renowned surgeon, and provides a disturbing insider view on how dysfunctional the US health care system is, and why. Some of my takeaways: don't assume you can trust your doctor; do your own research on ailments and get a second opinion--and a third. And yes, the system does push us to more exams, pills and procedures than we really need.
Understanding how the incentives are mis-aligned is a great starting point to think how we can reform the system. Dr Makary emphasizes the need to improve transparency and information--I could not agree more. Other industries are learning how to extract greater value from "big data". Health care needs to get serious about collecting more data, improving data interoperability so the data can be shared and analyzed--and enable both medical professionals and patients to take better-informed choices.
This book is such a treat. I have been a big Feynman fan since i was in graduate school. Feynman championed two lessons that we should always keep in mind. First: if you can't explain something in very simple terms to a non-expert, you don't understand it. Second: we know and understand very little. This book embodies both lessons. Feynman runs through essential elements of physics in very understandable terms; and every new understanding shows you how much we do not understand yet -- and conveys the passion to learn more.
His lessons apply beyond physics: more simplicity and humility could accelerate progress in many areas.
Over the last several decades a growing share of US prime working age (25-54 years old) men have dropped out of the labor force. Some are in prison, but many--according to some economists--are just staying home playing videogames. And I guess even more will, as augmented realty and virtual reality technologies become better and cheaper. This is terrible. Or is it?
Ernest Cline's Armada gives a different perspective. It's great fun to read. And--like al great novels--it is essentially a Western movie...