From Poverty to Prosperity

I’ve never given up on a book before. From Poverty to Prosperity brought me the closest I’ve ever come to doing that. I did, after many months, manage to slog through it, so I still haven’t given up on a book. Why didn’t I like this book?

First: it simply fails as a book. The authors present a very brief theory/vision/explanation for the future of the global economy and then proceed to fill the pages with loosely related interviews from prominent economists. The content just doesn’t suit the medium and it’s left to the reader to reassemble these disjointed opinions into a coherent narrative that supports the authors’ views.

Second: those views, the fundamental premise offered by the authors, that “Economics 2.0” will be built on the infinite availability of grand ideas and won’t be constrained by the inconveniences of limited resources, strikes me as overly simplistic and impressively naive. The tone of the entire book is one of academics who have never experienced the harsh realities of scarcity, corruption, and poverty (not that I have either, but I’m not writing a book that proposes solutions to all three). If it were as simple as the authors claim, to transition from “poverty to prosperity,” surely many more struggling countries would have already taken the necessary steps to do so.

(Amazon.com)

Fixing the Game

As someone who spends an inordinate amount of time reading blog posts and news articles from technology analysts, I am already somewhat biased against analysts in the first place. At some point after reading for the nth time about how Company X is running their business into the ground, only to see Company X itself report significant profits, you realize that analysts don’t have any more information than you do. They’re using the exact same publicly reported press releases, blog posts, and financial results that everyone else has access to and presenting their opinion as fact. So what does this have to do with Fixing The Game?

It turns out that an enormous segment of our economy is directly influenced by the whimsy of analysts and how the CEOs of modern corporations meet or miss those analysts’ expectations. Roger Martin makes an extremely apt comparison with the NFL and explains how ridiculous it would be to let sports analysts determine the value of a team rather than letting the actual numbers stand for themselves. In corporate America, our value system has become so twisted that corporations’ successes are measured only in comparison to analysts’ expectations. And of course, with executive compensation being tied more and more closely to the performance of a company’s stock, executives have begun gaming the system. They produce short-term  stock gains to boost the value of their compensation with a complete disregard for the long-term.

The book takes a refreshing look at how companies should deliver value to shareholders, arguing convincingly that the paradigm of shareholder value maximization is broken. And instead of just pointing out all of the problems with the system, the author makes clear and easy to understand recommendations that would make the system better. Definitely worth reading.

 (Amazon.com)