Articulates a theory for individual and enterprise participation in 21st-century knowledge development, to elaborate practices for personal excellence and sustainable competitive advantage. The predominant 20th-century paradigm, in which firms and governments controlled ‘stocks’ of information based on demand forecasting, resource allocation, and mastery of the experience curve, suffered from diminishing returns. The proposed model – here presented as an ugly rococo diagram – advocates collaborating with emerging experts ‘at the edge’; by attracting these experts to one’s endeavors; and by importing the fruits into the enterprise. The individual and the firm must clearly identify its aims (‘trajectory’) in order to benefit from participation. Building on the trio’s 2009 Shift Index of information technology, it is still a bit utopian and the theory lacks a governor / metric for evaluating effectiveness and also opportunity costs – especially dead ends. Even if influential, it is not clear enough to be the last word.
Month: April 2023
13. Wood, Revolutionary Characters (21 Nov 2010)
Sketches the moral and political sensibilities of the Founding Fathers: Washington, Franklin, Jefferson, Hamilton, Adams, and Madison along with Burr and Paine. Each of the core six was conscious of belonging to a new meritocracy, of setting an example for the Revolutionary generation. Washington and Jefferson receive the fullest historiographical treatment; Franklin’s portrait is most revealing. Paine and Burr are present to serve as counterpoints, as well to illustrate the code: even as the Founding Fathers proved themselves a brilliant cohort of elites, the 18th-century American aristocracy was ending, sped along by the example of these (largely) self-made men and their rhetorical appeals to the common man. That essay, which treats the story of the Revolutionary- and Federalist-era newspapers, also makes a telling explanation of the overheated, lugubrious prose so often found in the century’s polemics: the elites were talking amongst themselves, above the proletariat.
14. Strozzi-Heckler, Leadership Dojo (25 Nov 2010)
Outlines a leadership model premised on physical presence that signals inner harmony and external empathy. The construct, drawing heavily on aikido, comprises centering, facing, extending, entering, and blending. The crux: ‘There’s an indispensable kind of person who cuts a path in the world not simply because of his or her own achievements but because of what he or she has enabled others to achieve. This is a leader who brings focus and energy to a community and helps define the purpose and meaning of living in a particularly place an time.’ A long article would have sufficed — otherwise forgettable.
***15. Rubin, In an Uncertain World (12 Dec 2010)
The autobiography of the former Goldman Sachs chief executive and Treasury secretary falls flat because it glosses the important events of his career while abundantly criticising (succeeding) Bush administration policies. The book begins briskly with the Mexican currency crisis and quickly outlines Rubin’s belief that complex situations are fundamentally uncertain, so effective risk management is vital. After a useful outline of risk arbitrage trading, however, the book breezes past his rise and rise at Goldman. Then Clinton-era policies and landmarks are presented disjointedly: the Asian crises are not well connected to domestic events, whether economic or political. There is no substantive mention of the Lewinsky scandal. Nearly 20 percent of the book is devoted to criticizing his successors: though Rubin refrains from personalized, ad hominem attacks of the kind he professes disdain for, it is the details of his own decisions that are important and wanting.
14. Garnaut, Dog Days (24 July 2022)
Assesses Australian political economy near the end of the resource boom (circa 2013), asserting the need for more non-primary exports, decreased real-exchange rate (the Aussie adjusted for comparative interest rates, inflation, and productivity gains), and reduced living standards (less imports). Dismissive of political leadership, Garnaut, the Hawke-era government economist, barracks for technocracy. Why wouldn’t rivals respond in kind? How do his prescriptions escape the trap of public choice economics and unaccountable progressives?
Japan’s postwar boom had brought the center of the world economy closer to Australia; the impact of China’s post-1978 gains are well documented. White Australia had been inefficient because the country needed people as well as hobbled by encompassing protection, personified by McEwen. The Hawke-Keating era had never known a majority for reform: it was championed by independent experts. The recession of 1990-91 started backlash against reform.
Though Hawke ran a tight budget, the country did not save enough of the fiscal surplus (as a percentage of GDP), instead drawing the lesson that budgetary policy was ineffective.
The Howard administration is upbraided for acting to soften the introduction of GST and higher gas prices. Australia has yet to adopt ready-made foreign productivity practices: in the 1990s, growth trailed the OECD, 1.1 vs 2.5 per annum.
One-third of the economy is exposed to international trade, and the leading constraint on Aussie economy remains balance of payments. Health and education comprise 13 percent of GDP and 20 percent of employment. Accordingly, productivity must be packaged not pursued piecemeal. (Unexplained) monopoly pricing stops the declining cost of imports from reaching consumers, checking the desired depreciation of the Aussie. Immigration has raised skill levels and thus helps attract international capital (although such capital would seem suspect); the assertion that immigration reduces Aussie inequality in comparison with the US is unsupported, and there is no general discussion of social cohesion.
More in the policy realm, states lack effective powers to tax and therefore fiscal freedom while the Commonwealth cannot exercise powers of scale. Garnaut recommends constitutional review by experts. But states with larger equalization receipts have larger public sectors: public choice dynamics look to be at work: why would they not capture the review process?
A chapter on the green economy, now seeming a prelim to more recent work, fails the ex ante test: among many other examples, studies touting the effects the Olympic and the World Cup have been wildly optimistic and rarely address inevitable unintended consequences. Why should ‘climate change’ different? Aren’t advocates another special interest? There’s also a discussion of contemporary alternatives for taxing primary resources, summarized as ‘fair distribution’ of the burden of adjustment.
Most aggressively, Garnaut says no ‘thinker or leader’ has lead decisive historical progress (‘inflections’), crowing a number of questionable assertions about the capacity of political leadership, in support of arguments for technocratic government.
Politics in a democracy is inevitably a contest between groups seeking efficient policy for economic development and equity, and other groups seeking interventions to confer special benefits upon themselves or to kill or constrain interventions that would impose unwanted costs.
Abbot is chided for his determination to keep political promises in changed economic circumstances – why will public experts prove more adaptive? Confusingly, Garnaut suggests the relevant of international benchmarks (p.51) but also the failure of Aussie social sciences to stand independent (74). Private interests skew research.
How is technocracy insulated from moralizing practice (e.g., woke America) – Garnaut’s pandering through the back door?
15. Taylor, Struggle for Mastery in Europe (5 Sep 2019)
Narrates the foreign policies of Europe’s leading nations from mid-century civil strife through the conclusion of World War I. After 1848, balance-of-power calculation trumped the ideological standoff between conservatives (i.e., monarchists) and revolutionary nationalists. After World War I, Germany’s bid for continental mastery had not only obviated balance-of-power arrangements but also scuttled the system in favor of the 20th-century contest between communism and liberal democracy (Soviet Union vs. United States).
Balance of power was effected by design grounded in realism, not in treaties. Britain saw France as the keystone; Russia wished to push the two German powers into leading the defense of conservativism; Austria wanted Russian support; Prussia clung to traditional allies in Britain and Russia. Palmerstone thought BOP strengthened Germany by giving it a ‘free hand’; Bismarck agreed it was a means of security.
In 1848, the alternative to supporting the besieged Habsburg monarchy was the emergence of Hungary and unified Germany. Russia decided here interests lay in helping to restore Austria. During the Crimean War, Austria and Prussia avoided taking sides because the former was conflicted and the latter uninterested. The real stakes were Italian nationhood and the resolution of Germany. The war proved indecisive in these respects but created options for Napoleon III and then Bismarck. The Treaty of Paris, unlike the Congress of Paris following Waterloo, gave the deceptive impression of peace. (Coincidentally, it was the most successful invasion of Russian since 1800, reducing Russian prestige to the lowest point since 1721.)
Italy was more important to Europe prior to Germany’s industrial revolution; she could not make herself a nation. Austria could retain Italy only by conceding German leadership to Prussia; the basic principle of Habsburg diplomacy was to concede only after defeat; trying to retain both lost her both. Napoleon, meanwhile, bumbled into a policy of asserting ‘natural frontiers’ in aggrandizing Savoy. Italian unification finished Crimean destruction of post-Waterloo order; French ambitions of European hegemony were lost during 1863-66.
In dismembering Poland, Russia was no longer seeking Austro-Prussian unity. Prussia could subjugate the Poles, the Austrians could not. Her truly vital interests were outside the continent. (As an aside: most battles confirm the direction of events; Plevna in 1877-78 confirmed Turkish rule of the Bosporus Straights and Constantinople, giving the Ottoman Empire another 40 years; to this day, Russia remains confined to the Black Sea.)
Diplomacy is an engine of peace for those would have it. Bismarck’s convoluted doings played on European interests. The League of Three Emperors was anti-British, the Triple Alliance was contradictory. He favored Russia, disliked Austrians, and preferred France to Italy but above all sought prudential balance. Metternich’s system had been conservative, Bismarck’s was a ‘tyranny’ of German control, albeit pacific. Proper international order needs common principle, moral views, and treaties – Taylor favors Metternich.
Bismarck saw colonies in terms of European domination; England and Russia wanted to be left out of Europe to pursue empire. The Reinsurance Treacy (1882-83) ensured Germany would face a two-front war unless she abandoned Austria; Russian wanted Germany neutrality in a Habsburg conflict. Cancellation led to the Franco-German alliance, an arrangement unlike the German concord in that an autocratic and a revolutionary power came together. The chancellor’s successors lost the plot of continental domination by diplomacy and so were led toward war. It needn’t have been.
Europe would unite against Britain only when it had a clear champion: the age of African imperialism was merely postponement. During the 1890s the British were indeed isolated, Albion’s traditional Austrian links having faltered in 1894. Amid growing German predominance, the Franco-Russian tie-up unintentionally pushed Britain into Sudan (to protect Egypt vs French interests); the Boer War and the Anglo-Japanese pact underlined her solitude. Tirpitz’s naval buildup, instead of prompting Britain to buy Germany’s friendship, persuaded her to avoid conflict with France or Russia, and to adopt the ‘more than everyone else’ naval standard. Simultaneously, Weltpolitik combined with continental ambitions limited Germany’s options. The Dogger Bank affair’s denouement ended the expected (since Crimea) outcome of Anglo-Russian war.
British conservatives favored Germany, Liberals the Franco-Russian entente. Grey like most of his party repudiated BOP, but thought a scorned France would unite with Germany or Russia: Gallic independence became paramount, BOP came back to the fore, imperial interests which had predominated since 1860 were set aside. Once she had conciliated the other Great Powers to protect her empire, now she conceded imperial interests to defend the balance. Driven by trading and naval rivalry, in spite of tradition, Britain set herself against Germany.
Germany could not directly challenge Britain so long as there were two other independent powers. Abandoning the naval program might have won British neutrality, in which case she would have won the continental battle. The Moroccan crises were the point of no return. (To prove the point, the 1912-14 Balkan Wars, regarding the fate of Turkey in Europe and Asia, reduced Anglo-Russian goodwill, thereby reducing German tensions). These indirectly raised the question of French intentions should a Russo-German conflict break out: Poincare determined it would mean war no matter who started the affair, abandoning France’s a formerly defensive posture. German interests in the Baghdad railway and elsewhere in the Ottoman Empire brought here into direct conflict with Russia for the first time, for the latter needed ‘neutral’ control of the Straights for shipping. Germany required Austria to gain control of the Near East, and so was captive to her weaker partner. Romanian interests, excited by the Balkan Wars, sought to free 2 million ethnic compatriots from Hungary, which was core to the Habsburgs.
Alliances didn’t cause WWI, Taylor says; every country had reasons to hesitate or doubt surety of gains. Even Germany’s primary motivation – whether naval power, Near Eastern interests, continental supremacy – cannot be certainly identified. But the Schlieffen Plan’s adoption, which required a quick-strike win in France to avoid prolonged two-front fighting, since necessitated commitment to action. Germany did not engineer August 1914 but welcomed the occasion, the Balkan Wars having false taught of a quick win.
During the great War, every small-state alliance was a hindrance. For example, but for Italy the Allies might otherwise have severed Austria from Germany. Civilians tried to negotiate, the generals to win outright. Eventually the former were pushed aside for Ludendorff, Clemenceau, Lloyd George. The war ended BOP as a system, the treaty sought to permanently cripple Germany’s Great Power capacity, Russia having fallen to revolution. In 1918 Europe ceased to be the world’s center, though the next struggle was not clarified until 1945, in a new ideological rivalry.
16. Cannon, Governor Reagan (28 Dec 2010)
Narrates Ronald Reagan’s rise to and career as governor of California (1966-74), the era when he became an accomplished politician. Reagan’s conservative / populist rhetoric belied pragmatic governance, often made necessary by Democrats controlling the legislature. For example, he raised taxes his first year in office and blocked Eel River development, bucking the establishment. His bipartisan welfare reform also was successful; his record on education reform and the budget (i.e., tax reform) less so. Based on contemporary reporting and augmented by post facto interviews, Canon portrays not only the principal but also the many surrounding figures. Including by a treatment of boyhood, acting, and his presidential campaign, the book adds up to first-rate political biography.
1. Drucker, Management Challenges in the 21st Century (2011)
Postulates a framework for managing knowledge workers, defined as ‘technologists who bring learning to work that is at least partly manual, such as lab technicians’. The best chapters regard the enterprise’s use of info (foundation info, productivity, competence, resource allocation) in order to create value and manage assets, which Drucker describes as people themselves; and knowledge-worker productivity, which turns on creating a culture where individuals know how to make what they know useful to others. Always thoughtful and provocative if typically aimed at larger organizations.
2. Diamond, Getting More (9 May 2011)
A conversational, anecdotal presentation of the author’s Wharton course on negotiation. The primary framework is 1) what are my goals? 2) who are they? and 3) what will persuade them? The author elucidates 12 tactics for executing a 4-step model (page 160), the most important being focusing on the counterpart’s vision and problems, using their standards, finding the ‘real issue’, trading items of unequal value, and taking incremental steps. Like many such frameworks, it seems most effective if frequently put to use.
3. Bryson, In a Sunburned Country (18 Aug 2011)
An idiosyncratic and patchwork travelog of (mainly) outback and western Australia, taking special note of the country’s postwar trajectory away from ‘white Australia’ and ties to Britain, and the geological and biological diversity of the flora and fauna. Frequently the author uses himself as a foil. Humorous but largely forgettable; immersion in sports is a better way to learn the culture.