E-Books Flatline; Books (Paper) Return Like Zombies

As the Web was becoming ubiquitous in the early haze of the 21st century the wonders of Google search displaced Altavista and other engines in the search wars. Web wags declared that the age of books, actually all paper-based media, to be over. The Web would quickly provide universal access to all of human knowledge on your computer. This even before the iPhone and Android brought the Internet to our hand and thumbs. Amazon and Apple launched their tablet reading devices, Kindle and iPad. Others followed. The numbers are truly amazing. Over 2 billion tablet computers were sold between 2010 and today. The sale of e-books rose enormously.

On the way to the funeral books proved to be the zombies of the paper media world. Newspapers and magazines have continued to decline. Continue reading

Book Review – The Rise and Fall of American Growth

Rise and Fall of American Growth-bookcoverThe Rise and Fall of American Growth: the US standard of living since the Civil War by Robert J. Gordon1 is a weighty book in every regard. At 762 pages it is a heavy lift – not beach reading or even bed-time either. But I found it almost a page turner. It is very well structured and written. None of the fussiness or obscurantist language one often finds in academic works. The central point of the book is that during the period from 1870 to 1970 the US economy grew at an extraordinary and we will not see a return to that rate for some pretty fundamental reasons. Continue reading

  1. Princeton U. Press. 2016 []

No Place to Hide by Glenn Greenwald – book review

Joe, My friend got back to me. Her contact left the Review five years ago. Sorry.  MarkWe are within days of the anniversary of the first revelations from Edward Snowden’s archive of NSA documents. The drum beat of new stories emerging from this trove continues even to this moment.1 So, Glenn Greenwald’s book, No Place To Hide: Edward Snowden, the NSA, and the US Surveillance State might be greeted with a yawn, what could be new? 

In fact, there is much that is new about how these stories have come to light and a very good overview of what we have learned about what Greenwald calls the US Surveillance State. This is a book in two parts. The first 89 pages read like a cross between a detective thriller and a spy story. There are hand offs of thumb drives at airport boarding gates, virgin computers, cell phones sealed off from the reach of the NSA by removing batteries or stuffed in freezers, meetings with a yet to be identified Snowden by an unsolved Rubik’s cube in hand. Continue reading

  1. NSA Collecting Millions of Faces from Web Images http://www.nytimes.com/2014/06/01/us/nsa-collecting-millions-of-faces-from-web-images.html accessed 06012014 []

Flash Boys Doesn’t Ask the Important Question

Flash Boys cover by Michael Lewis

photo by Patricia Wall/ NYTs

The new book, Flash Boys, by Michael Lewis has reignited the discussion of how our financial markets are rigged by high frequency trading.1 From my 2012 note: 

To turn back to HFTs, why do we need this kind of transaction? How do they contribute to economic growth? These activities are by definition a zero sum game. They are like every other form of gambling a zero sum game. There are winners and losers, but no incremental gain for the economy. Other than enriching the HFTs at cost to others with smaller computers and fewer PhDs on staff what do we get for allowing these activities? Potentially catastrophic destabilization of financial markets? Where is the upside for society as a whole? Isn’t  a primary purpose of any economy to increase the size of the pie, not just to redistribute existing wealth?

We should demand that our financial markets serve their fundamental purposes – connect investors with those who can deploy those resources to create new products and services and enable the flow of these goods and services. To call holding financial instruments whether stocks, bonds, or other assets for mere seconds investments is to beggar the mind. Government needs to step in to penalize economic activity that looks like gambling and certainly does not “grow the pie”. A sliding scale of transaction costs (aka a tax) could bring this to a screeching halt.2 There are sure to be complexities in how to implement such a strategy. But, if at every step we ask how a financial transaction contributes to economic growth at a systemic level, solutions will appear. Right now we have financial markets that are not only rigged but so complex and non-transparent that we are certainly setting ourselves up for future calamities like that which struck us in 2008.

  1. I have written about these issues earlier:  “High Frequency Trading and Deeper Questions about Capitalism” and “Wall St – not about investing but fixing the game” earlier []
  2. We would have to face the international crisis of how to employ all those PhDs currently engaged in the HFT wars []

Book Review – The Whisperers – private life in Stalin’s Russia by Orlando Figes

Whisperes- family life in Stalin's Russia by FigesThis book by Orlando Figes is exciting, terribly depressing, and cautionary. Based on hundreds of in-depth interviews and thousands of letters, diaries, and government documents, Whisperers1 puts real people in place of the faceless numbers that constitute our usual image of the human costs of Stalinist Russia – the 10 million lost during collectivization, the same or larger number disappeared during the various Terrors and the 20 million or more dead during the Great Patriotic War (aka WWII). For those who do not have much background in Russian and Soviet history Figes provides concise sketches of key political and economic developments covering the entire span of Soviet Russia. You will not feel at a loss during the NEP period nor the ensuing collectivization and the round ups of “kulaks”. This allows you to understand the private lives with a reasonable understanding of the context.

But the real contribution of this book is its discussion of the truly radical efforts by the Communist Party to crush the family as a basic unit of society and replace it with other institutions. The goal is to shape the new Soviet man. The coercive intrusion by the state into every aspect of daily life is comprehensive – it adds new depth to understanding the machinery of a totalitarian state.

  1. more here on Figes’ website []

Russia in Private by Richard Yatzeck

Russia in Private by Richard Yatzeck

Russia today seems very far from the country I grew up with as an international ogre on the TV news,  the Soviet Union or USSR. After all, the Wall fell in 1989, already 23 years ago. The Soviet Union 

dissolved in 1991, 21 years ago. It is mostly in the memories of those over 40 years old that crossing behind the Iron Curtain was an exotic, even inexplicable adventure.

In the spring of 1971 I left my high school teaching job several weeks early to join the second Lawrence University Slavic Trip. This three month long camping trip through the Soviet Union, Romania, Bulgaria, Turkey, and Yugoslavia (I left to go to graduate school at Cornell before the trip concluded in Hungary and Czechoslovakia) has stood as a formative event in my life. For the first time I was outside of the US and definitively in foreign cultures.

Now we have Russia in Private (Amazon link) by Richard Yatzeck. Professor Yatzeck suffered through my presence in his Russian literature courses at Lawrence University for four years. More importantly here he also participated in 9 visits between 1961 and 1997. He calculates that cumulatively he has spent three years in the Soviet Union then Russia. 

The structure of the book is loosely chronological from his 1961-62 years of study at Moscow State University (the Harvard of Russia) through camping trips with undergraduates to a final stint at semesters abroad in 1997 in Krasnodar. The central content is really the particular world views of Russians in their public and private lives.

Since there is more continuity in human affairs than not, this book is an excellent introduction to some of the driving elements in the current Russia. It is not a psycho-sociological academic exercise. Whatever didactic goals there might be, the book moves forward with many well told anecdotes and observations of the personal and the private as well as the day-to-day.

George Smalley in Yatzeck's Russia in Private

George Smalley, back cover of Yatzeck’s Russia in Private

One of the treats of Yatzeck’s book for me is the opportunity to revisit George Smalley. George was passionate, sometimes about matters that seemed a bit mysterious to a college-age student. He worked phenomenally hard. He demanded hard work in return and it was difficult not to reciprocate. His language teaching methodology, based in Prague school linguistics (think Russian linguist Nikolay Trubetskoy and the Russian-born American linguist Roman Jakobson), was a miracle of clarity and power. Above all George was a wild and crazy guy.

Who else would invite you in for your private tutorials in Russian with cigarettes burning in both hands, wave you to your seat across from the over flowing ash trays and announce, “You have parachuted into Karaganda. You’ve been arrested and are now being interrogated by the local police.”

Dick Yatzeck’s book inspired a flood of memories and comments from me. The 6,000 word letter I tapped out is available for download here (PDF).

Cod: a biography of the fish that changed the world by Mark Kurlansky

Cod by Mark KurlanskyThis wonderful little book (283 pages including 40 pages of recipes) by Mark Kurlansky is a great introduction to viewing history through a different kind of lens. We are all to used to history as told from the point of view of great men (almost always me) and nation states. Codis about the fish, fishing, processed food, ecology, trade, slavery, rum, fishing technologies, food around the whole of the Atlantic and beyond and more. It is a wonderful example of regional history.

How did the “sacred cod” sculpture end up hanging from the ceiling of the Massachusetts State House? Or, how did salted cod come to be such a prominent part of the cuisines of Spain, Portugal, France and other countries? How did it come that European fishermen competed for access to cod fisheries along the coast of New England and Canada well before the Pilgrims ever arrived? Where did cod fit into the slave trade that brought millions of Africans to the Caribbean, and North and South America?  How did cod come to be almost fished out of existence in the 20th century?

The_Sacred_Cod_of_Massachusetts

The Sacred Cod of Massachusetts - MA State House

This book answers these questions and more.

Title: Cod: a biography of the fish that changed the world
Author: Mark Kurlansky
Publisher: Penguin Books, 1997
Reviewer: Mark Orton

Slavery by Another Name: The Re-Enslavement of Black People in America from the Civil War to World War II

Slavery by Another Name by BlackmonThis book brings to light the extent to which the Jim Crow laws were in fact part of a totalitarian system of government that ruled the South for more than seventy five years. How these laws came to be called Jim Crow by historians instead of  “a system of racist oppression and exploitation” is a mystery. The fact that historians and school textbook writers  adopted this term,which is derogatory in its basis, points to a shameful lack of focus on the facts of life in the South during the period between 1876 and roughly 1965.  Worse it aided the systematic cover up of the actual functions of these laws and their impact on African-Americans. If the word Apartheid had been invented earlier this would also be a useful term.

The research and the writing is compelling. Blackmon has a website devoted to the book and the production of a documentary movie on PBS that will air in 2011.

Slavery by Another Name: The Re-Enslavement of Black People in America from the Civil War to World War II
Author: Douglas A. Blackmon    Publisher: Doubleday, $29.95 (512p) ISBN 978-0-385-50625-0

The Warmth of Other Suns – Isabel Wilkerson

Warmth of Other Suns - Isabel WilkersonIsabel Wilkerson’s book, The Warmth of Other Suns – the epic story of America’s great migration,1 creates  whole new planes of awareness of our history.

This book startled me to a new understanding of how encompassing and pervasive the Jim Crow laws and social rules of the South really were. Without much thinking on my part, I have always equated Jim Crow with images of separate water fountains, lunch counters, and schools, along with denial of voting rights. Included were images of lynchings and mob violence. Wilkerson’s work brings to life the real depth of the American system of Apartheid. These laws and social rules were so extensive as to lead to separate break times in factories so that whites and blacks would not even use a stairway at the same time.

This is the story of the six million African Americans who left the South for the North and West of the US between 1910 and WWII. Wilkerson builds her narrative of the main courses of this migration through the stories of three people leaving three different parts of the South, venturing to the three main destinations, NYC and the northeast, Chicago, and Los Angeles over three decades (teens through 40’s). Her overall research included interviews with over 1,200 people.

The stories do not end with the escape from the South. Wilkerson follows the stories as they unfold in their new environs. Here the transition from the oppressions of the South to the new realities of the north and west. No surprise the escape from the South did not mean an instant escape from racism institutionalized or otherwise. This part of the story is more familiar to a Northern urbanite.

This book, along with Douglas Blackmon’s Slavery By Another Name – the re-enslavement of Black Americans from the Civil War to WWII2 are compelling additions to understanding the history of racism in the US. Both are must reads.

  1. New York City, Random House 2010 []
  2. NYC Doubleday, 2008 []

Book Review: Manias, Panics, and Crashes: a history of financial crises by Kindleberger

Manias, Panics, and Crashes: a history of financial crises, fourth edition by Charles P. Kindleberger (New York: Wiley 2000)

Manias,Panics,and Crashes by KindlebergerA recent Wall St Journal article described this book as a “must read” classic for anyone involved in financial markets. I have been involved directly in financial markets in two ways recently. First, I spent a year chasing around chasing angel investors and venture capitalists during the DotCom boom to fund Valuedge (the software company I co-founded in 1999 and left in 2004, though I still hold a large ownership interest).  Second, I receive quarterly statements for my 401K retirement investments. Primarily driven by my experiences with Valuedge and the phenomenal boom time of the DotCom era, I read through Kindleberger’s durable book (originally published in 1978 and never out of print since).

Although I have come to refer to the year 2000 as the Tulip Phase of Valuedge after the well-known Dutch tulipmania in the 1630s. Little did I know that financial bubbles, booms, and the inevitable crashes and depressions are a very common feature of capitalism. The first couple of chapters describe or mention dozens of bubbles and booms located around an amazing array of geopolitical centers. These have been focused on anything and everything: the well-known tulips in the 1630s; railroads; copper; English country houses; agricultural land; private companies going public (Britain 1888, US 1928 and IPOs 1998-2000); and many others.

The first lesson, then, is that booms and speculative bubbles are a commonplace feature of the capitalist world.

So, why do these bubbles and speculative manias occur? The answers are complex, involving human psychology, malfeasance, regulation (or lack), banks, and government. Read Kindleberger .

An important explicit message from Kindleberger is that economists’ models of “homo economicus” and “the market” are far from a useful mirror of what actually goes on. People are not even vaguely rational in their economic behavior and markets never constructively approach the model of a market found in Econ 101 or for that matter anywhere else that I have ever heard of.

This is not just an academic concern. In recent years our politics has displayed a dominant rhetoric that calls for the application of “market solutions” to almost every area of our lives, particularly those where traditionally we expect government to provide services, regulations, etc. Instead, we now reflexively think that “market solutions” are inherently more efficient and effective than government services. Liberals, trapped in their abandonment of even the moderate criticism of capitalism that the Catholic Church, for instance, engages, have provided no useful critique of “market solutions” as a universal policy approach.

At a practical level, this public policy fixation on “market solutions” combined with a generalized attack on all government spending, is driving a generalized impoverishment of the public infrastructure of our civil society and not coincidentally an enrichment of the wealthy and particularly the super-rich.

I recommend this book to anyone with an interest in the day-to-day political and economic life of the world.